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Tesla's backtracked $50,000 resale fee could be a sign the Cybertruck isn't destined for the mainstream yet

Tesla Cybertruck
Tesla Cybertruck.Tesla
  • Tesla added (and quickly deleted) a $50,000 resale clause for its Cybertruck.

  • The fee could be a sign the Cybertruck might be a smaller release than expected, experts said.

  • Automakers typically use resell clauses on limited edition vehicles.

Tesla's rescinded $50,000 resale fee is the latest sign the Cybertruck won't hit the market in large numbers anytime soon.

Tesla spooked some investors and Cybertruck order holders on Monday with an unusual clause in their terms and conditions that made resale in the first year punishable with a $50,000 lawsuit.

By Tuesday morning, the clause had vanished from the Cybertruck sales agreement. Experts say the initial inclusion of those resale restrictions is a sign that Tesla's long-awaited truck launch might not be a high-volume play by Elon Musk.

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These restrictions are rare, but they're most commonly used on limited-production vehicles, Stephen Beck, founder and managing partner of consultancy cg42, told Business Insider.

"Elon and company were very clearly viewing this as a limited-production vehicle," Beck said.

Musk started hedging for lower Cybertruck production volumes last month when he spoke of the truck's complexity and high cost in the early days of production. A limited production run would be an about-face from Tesla's initial value proposition for the Cybertruck: an entry into the lucrative US pickup truck segment.

Brian Moody, executive editor at Autotrader, says it's unlikely that Tesla would put a true cap on the number of Cybertrucks it builds, but its style and likely high sticker price could make it a harder sell for the average electric car shopper.

"It's really hard to say how many people on the reservation list will actually buy it," Moody told Business Insider. "It could very well one day be their best-selling vehicle. I mean people just like trucks."

Resale clauses are very rare

Fewer than 1% of cars on the market are subject to resale restrictions, and car companies reserve the clauses for special editions in order to protect the image of the vehicle and its price point, Ivan Drury, an automotive analyst for Edmunds, told Business Insider.

"It means you misjudged how much you could sell the vehicle for," Drury said of cars that are flipped for profit. "It means there's a lot of demand out there for your product, but it can give potential buyers or future buyers a bad taste."

The Ford GT had the most high-profile example of such a clause being enforced when Ford sued wrestler and actor John Cena after he resold his GT in November 2017. For context, Ford sold 138 GTs in 2017.

These clauses are notoriously difficult to enforce, which could be why Tesla backtracked in the end, experts told Business Insider.

"There are a lot of factors in play. Who will keep track of this? How much time and resources would they want to put toward this?" Drury said. "It's a little preemptive. I think they assumed a little too much too soon."

Tesla has reportedly taken steps against scalpers in the past. Last year, some Tesla owners said they were reselling their EVs for up to $7,000 in profit as used car prices skyrocketed. At the time, resellers were reportedly contacted by Tesla's Loss Prevention Team and told they were in violation of the company's reseller policy.

The electric car maker could always revisit its policy on reselling once the Cybertruck hits the market. But, regardless of Tesla's strategy with the Cybertruck people will find ways to cash in on the hype, Moody said.

"There will be just as many people who want to work the system to make money as people who want to own this vehicle," Moody said. "Some level of profiteering is going to happen."

Read the original article on Business Insider