Can you flip a Tesla for a profit? Can you resell a Tesla right after you take delivery and make some money? How does sales tax factor in? What about other EVs?
These are questions we get ALL the time from buyers, sellers, and the people perusing our site…
And, make no mistake about it—this is a hot topic. With all the production delays in the EV world right now, the demand for many EVs far outpaces the supply.
So, where does this leave someone who’s ready to take delivery of an EV reservation they’ve had for over a year? Or someone who’s owned a new EV for a few months, and wants to sell for a profit?
We’re going to dive into all of those questions, right here—right now! But first, a quick disclaimer:
While we are experts in the used EV/Tesla world, this post is definitely not financial, legal, or tax advice. It’s simply our opinion on the state of the used EV market at the time of writing, and our thoughts on questions that often come up. Please consult financial, legal, and tax professionals in order to get advice on your specific situation.
With that out of the way, let’s dive in!
Are Teslas and EVs Actually Selling for Over MSRP?
Short answer: yes.
Long answer: it depends on a lot of different factors.
***A quick editors note here: as of late October 2022, Tesla flipping is all but done due to a variety of market factors, and it’s much harder to flip other EVs as well. Check out our latest blog post about dropping EV prices here***
If you’re looking at flipping a Tesla or EV, literally one of the first things that comes to mind is whether you can sell it for more than you paid, and this is dependent on a ton of factors—but the most important one is your potential asking price as it relates to MSRP.
The truth is that some
Teslas and EVs can be sold for a lot more than MSRP, but this is highly variable. Let’s take a look at some current numbers with the 2022 Rivian R1T as an example.
There are many original reservation holders with R1Ts who were able to pay $80k – $90k or so, leaving them a decent margin to work with in terms of reselling.
And the peak prices for R1Ts in the used market have followed this trend:
- Initial release: $135k
- 1-3 months later: $125k
- 3-6 months later: $115k
- 6-9 months later: $105k
So, yes—if you paid somewhere in the $80k – $95k range for your R1T (Launch Edition, Adventure, or otherwise), there may be some profit to be made, but the margins are definitely getting slimmer.
And you have to ask yourself, is it really worth it to take delivery of an EV, carry insurance on it, shop around for buyers, deal with all sorts of hassle, only to potentially make a few grand? The answer is often no.
Generally right when an EV is first released (i.e., deliveries begin) is the best time to sell, because demand is at its peak, and supply is typically very low.
We explain this all the time—the people who can afford to pay far over MSRP because they want the newest, hottest EV, generally do so right away.
And, it’s a smaller pool of buyers (for example, those willing to pay $135k for an R1T); most people shopping for EVs don’t have that kind of cash to burn (i.e., paying $50k+ over MSRP for an EV just to have it).
Once the pool of “big baller” buyers has been exhausted, then you enter into second and third tier buyer pools; people who are willing to pay over MSRP to a certain extent, but are more discriminating and likely shopping for the best deal to varying degrees.
During this time, as someone looking to flip, you’re also competing against the fact that more deliveries are happening, and supply is catching up a bit, so the market is becoming more saturated.
For example, a couple months after the R1T was first delivered, it was pretty rare to find them for sale. Now? Not at all—they’re everywhere, and it often takes some time to sell one now (depending upon the price and other factors, of course).
So, yes—you can ask (and get) over MSRP for an EV in some cases, but not in others, and the margins can be quite variable and change by the week (more on this coming later).
So, How Much Can I Ask for an EV I Want to Flip?
Here’s a common question we get all the time:
“I heard Tesla is backed out on production, and the EV market is hot. So that means I can ask way more than MSRP, right?!”
Not necessarily. As we outlined in the section above, it’s possible to sell or flip an EV for a profit, and over MSRP, but this isn’t possible with every EV.
One of the best resources available online (in our opinion), to do EV pricing research is our “Include Sold Listings” tool.
If you go to findmyelectric.com/listings and check the box that says “Include Sold Listings” you’ll be able to see the asking prices of sold vehicles on our platform. As the #1 used Tesla site online, there is a LOT of good, free data here in terms of pricing research.
One thing to keep in mind here, is that these are asking prices, not final sale prices—but it’s still great data to go off of, and why we specifically built that feature in our platform (for both buyers and sellers to use).
We don’t often see or know the final sale prices, but from the data we do have, they generally don’t vary much more than 1-3% from fair market asking prices (of course, there are outliers). So, that can give you an idea of where to start with pricing, or what your EV may potentially be worth.
Also, there are some other various sources on the web that can help inform your pricing/valuation choice even further, but our “Include Sold Listings” tool is a great place to start. And, you can also filter for your specific EV as well, drilling down deeper to see only EVs that are similar to yours.
Other Limitations on EV Asking Prices
If you’re looking to flip a Tesla or EV, you may want to consider some other things as well in addition to historical asking or sold prices.
***A quick editors note here: as of late October 2022, Tesla flipping is all but done due to a variety of market factors, and it’s much harder to flip other EVs as well. Production has also caught up quite a bit for a variety of Teslas and some other EVs. Check out our latest blog post about dropping EV prices here***
Production Delays and EV Pricing
Many (but not all EVs) are currently facing production delays. This massively impacts the market, and what people are willing to pay. But there’s a ceiling to this as well. Let’s take Tesla and the Model 3/Y for example:
- Model 3 SR+ RWD: $46,990 (Est. Delivery: Oct – Dec 2022)
- Model 3 Long Range AWD: Not Currently Available
- Model 3 Performance: $62,990 (Est. Delivery Oct – Nov 2022)
- Model Y Long Range AWD: $65,990 (Est. Delivery Dec 2022 – Apr 2023)
- Model Y Performance: $69,990 (Est. Delivery Sep – Oct 2022)
OK, so what do these production delays mean, and how do they inform pricing, in terms of being able to flip a Tesla or ask over MSRP?
Well, first—let’s note that this is applicable at the time of writing (September 2022)—and these prices can change daily. We will work to keep this post current and relevant, but the market moves FAST.
That said, the first thing to notice is that the Model 3 LR AWD isn’t even available right now. So, your only options as a new Tesla Model 3 buyer are the SR+ RWD, or the Performance, which is a $16k difference in price.
This gap, and the unavailability of the Model 3 LR AWD, means that the SR+ RWD probably carries a bit of a premium over MSRP. But not too crazy of a premium, or people will just look to the used market for a LR AWD Model 3 that’s priced somewhere in between the two.
It’s important to remember that with Tesla, the Performance models are almost always available sooner than the other models.
So (and this is important)—you aren’t only competing with other sellers of your similar model, but you are also competing with Tesla on the next level up.
Case and point? The Model Y. Sure, the LR AWD Model Y isn’t available until the end of the year at best, or spring 2023 at worst, but the Performance version is basically available NOW, and for only $4k more…so if you’re selling a LR AWD Model Y, you really need to be careful how much you ask, because you’re pushing up against that next level of pricing and availability…
And if you get too close to the Model Y Performance price, buyers will just choose that—and get a faster vehicle, available from Tesla basically right now. And we see this happen all the time.
So, when looking at flipping a Tesla or EV, it’s also wise to consider the backlog in production, and the competition you have not only from other sellers, but essentially from the manufacturer as well.
Desired Model Configurations
Some EV configurations are more desirable than others, and this is an important considering when looking at EVs to flip or resell.
For example, the Tesla Model X is most desirable in the 6 and 7 seat configurations (so much so that we added a filter on our listings page just for number of seats).
The 5-seater? Not so much. Why is this? Well, because most people who are buying a Model X are doing so for the increased seating capacity as the number one purchasing decision point. So, if you’re looking to flip an EV for a profit, it’s important to consider the salability of your particular EV and the configurations that are most popular.
Because of this, the ability to flip or resell a Model X 5-seater vs. a 6 or 7-seater is fairly diminished.
Also, a quick note on software: Full Self-Driving (FSD) is worth of fraction of the retail price on the used market, so it’s much better for ROI in terms of flipping to leave it off the configuration. If you want to learn about why this is the case, check out our post on what FSD is worth on a used Tesla.
Potential Dealer or Manufacturer Restrictions
It’s been reported that in some cases, dealers or manufacturers are trying to implement restrictions on selling EVs in the first year of ownership, or some other time period.
As far as we can tell, this is at the dealership level only, and manufacturers have backtracked on any implementation of this at the time of writing, and the “big boys” like Tesla, Rivian, etc., have never had anything like that. So, it appears this would generally be up to the buyer whether or not they want to sign an agreement like this at the dealer level, and it would not be something that we think is not a good idea (and it seems like a fairly rare ask by dealers anyway).
All that being said, at the time of writing, there doesn’t appear to be any restrictions that we are aware of on flipping/selling an EV after purchase; it’s yours, you own it, and can freely resell it (of course, you’d need to do your own research to be 100% sure).
Sales Tax and Profit Margins—Something Many Don’t Consider
OK—this is something that’s really worth mentioning, and a very important point that it seems many people don’t consider (or consider nearly enough).
In most states in the US, there is a sales tax on EVs. This means that when you buy an EV, you have to pay a certain percentage of sales tax to the state you live in. When someone buys it from you, they typically pay sales tax in their state (so you are generally paying this only once, but it’s still a big consideration).
Let’s use Minnesota for example, because that’s where Find My Electric is headquartered. In Minnesota, there is a 6.5% sales tax applicable on EV sales (new and used). And yes, of course there are caveats and perhaps some situations where this doesn’t apply, but for most people, they’ll have to pay the tax.
So, in round numbers:
If someone pays $100k for a new EV, they will be paying $6,500 to the state of Minnesota. That $6,500 is going to MASSIVELY eat into the profit margin of a private party person looking to flip or resell an EV.
Dealers who are licensed in Minnesota don’t pay sales tax on vehicles held for resale, but private parties do. So, that’s a huge number that eats into the profit margin of a regular person looking to flip an EV.
There are some states (such as New Jersey) that don’t charge sales tax on EVs, which gives a private person living in that state a potentially much larger margin to work with.
This is also aside from the fact that any profit a person makes on the flipping or sale of an EV, they will likely owe some type of state and federal income tax on it as well—which is another consideration in the overall profit margin of flipping an EV.
There are also some considerations and potential caveats with respect to the EV-related federal income tax credits when selling an EV for a profit as well.
Our main point here is this—there are definitely some sales tax, income tax, and other monetary considerations when trying to flip a Tesla or EV for a profit, and they should all be considered and not taken lightly.
It’s important to remain in compliance with all state and federal laws, and you should always consult an appropriate tax, legal, or other professional when dealing with or considering these matters.
Can You Sell an EV Reservation Without Taking Delivery?
Ah, the age old question of “Can I sell my reservation or place in line for a profit without actually taking on the risk of buying the vehicle?”
We get this question a lot, and there are a few things to consider:
1) We don’t allow sales of reservations on Find My Electric—so please don’t try to sell a car you don’t have yet, or a reservation—it’s a big no no.
2) Tesla does not allow this either. They will cancel your reservation if they find you attempting to do this.
3) Some forums or other marketplaces may allow this, and sometimes people have reportedly gotten away with selling a reservation (Tesla or otherwise), but it’s massively frowned upon by Tesla, and also by us.
We’re happy to help you sell a Tesla once you have taken delivery, but not before.
Where’s the Best Place to Sell/Flip a Tesla or EV?
You already know what we’re going to say here, right?
Find My Electric, of course! We’re the #1 used Tesla and EV marketplace on the web, and offer two ways to help you sell your Tesla or EV:
1) Create a Listing on Find My Electric!
We offer a Featured Listing for a one-time fee $49 which comes with all sorts of goodies including our Expert Pricing Help. That means to get access to our team of EV experts to help you dial in the perfect asking price! This can be really helpful if you’re looking to know what your EV is really worth to flip it. You also get access to our support team 7 days a week (even on weekends), and priority placement on the #1 used EV marketplace on the web!
We also offer a Free Listing option that’s totally free. It doesn’t come with Expert Pricing Help or support, but it is truly free—and something else to consider. You can learn about our different listing options here.
2) Get an Instant Cash Offer from our Premium EV Dealer Network!
We created a Premium Network of used EV dealers who bid against each other to bring you the best offer price, all in one place—for free!
Some benefits of the Find My Electric Instant Cash Offer Program include:
- Real offers from real EV dealers (not a random algorithm low-balling you)
- Our EV dealers understand what rare features like Unlimited Supercharging are worth
- All inspections are virtual—no need to drive your car to a random place before getting an offer
- Get multiple offers in single place
- EV dealers only—no random ICE/gas car dealers who don’t understand Teslas and EVs
- Convenient driveway pickup
- Zero cost or fees to you
And the best part is—you can choose one or both of the options above!
We’re also here to help, so if you have any questions, feel free to contact us at any time!