Dennis Wang lost money on his first try but learned from his mistakes. On his second attempt at electric vehicle pinball, Wang made $4,000. By the age of three, he hit what he considered to be the top spot, a $7,000 profit. All the deals involved Teslas that Wang bought, resold, and flipped over as tickets to a hot concert. “I currently have a Model S that I’ll probably be selling in three months, pending market,” Wang said. “I also have a Model Y and a Model X on order.”
Buying and reselling stuff is as old as commerce, with cautionary tales and questionable legality. House flipping has become so appealing that multiple reality TV shows have hyped the process and the personalities involved. Now a new kind of pinball has emerged in the hope that zero emissions equal big wins. They are helped by an unusual confluence of factors plaguing EV manufacturers (supply chain problems, semiconductor shortages, unmet production targets, an emerging shortage of lithium batteries) and car buyers (record fuel prices, high used car prices, long waiting lists for electric vehicles).
Some, like Wang, a 33-year-old car enthusiast with crazy spreadsheet skills, have learned that they can flip cars, with a recent emphasis on electric vehicles. Some EV flippers find buyers willing to pay sometimes exorbitant amounts, tens of thousands more than the retail price, to buy the cars. Think of the person trying to sell a practically new 2022 Hummer EV1 on Facebook for $220,000. It was retailing for less than half that, at $105,000.
Also, on Facebook, two 2022 Rivian R1T electric adventure vehicles are listed for $123,000 and $220,000. On the Rivian website, the same vehicle starts at $67,500. Buyers on Cars & Bids, an online auction site, could find them for $97,000 and $103,000. While the more outrageous requests to double to triple the value of some EVs are either ignored or severely flamed online, some less lofty offers are succeeding. Cars & Bids, for example, lists 14 recent sales of the R1T, between April 12 and June 28, for prices ranging from $106,000 to $138,000. A Tesla Model S connected in 2018 to a vehicle Supercharging station in Seabrook, NH.
(Charles Krupa/Associated Press)
A Model Y, with less than 2,800 miles, recently went up for sale on Edmunds for $70,995. Edmunds found a “good price,” $1,739, “below the market,” as in what the market says such a car is worth.
In June, Tesla increased the price of its Model Y by 5% to $65,990, but that didn’t stop flippers. Eddie Gribust, who earns his living equipping Mercedes-Benz Sprinter vans for off-grid use, recently unloaded the Tesla Model Y that he had used as a family car for nine months.
Gribust was so excited about the sale — the buyer flew from Las Vegas to Boise, Idaho, for the transaction — that he posted a YouTube video titled, “Turning my Tesla for $5,000 in profit! Here’s how.”
“As my company buys and sells these Sprinters, I’m aware of things like the microchip shortage,” Gribust said. “And everyone says the secondary market has grown by 20 to 30%.
“I was about to get a [Tesla] Model X and the Cyber Truck. Delivery times were nine months to a year, indicating high demand and low supply. From there, it benefited from simple economics.”
The fThe former chief economist of the Securities and Exchange Commission, Larry Harris, teaches that exact thing to USC’s Marshall School of Business students.
“When supply and demand don’t match, you get these opportunities that smart people can take advantage of,” says Harris. “We’ve seen this in all kinds of markets. When the prices for scarce commodities change significantly, some buyers realize that the item has greater value to others than to them, and they will sell to people willing to pay more than they would and profit from it.”
An all-electric Rivian R1T truck in New York Times Square in 2021.
(Ann-Sophie Fjello-Jensen/Associated Press)
Or, as Gribust put it in his video, after expressing regret at giving up the Tesla: “I have a simple rule: If someone puts a profit in your hand, all you have to do is close that hand and walk away. ”
Recurrent, which tracks the used EV market and gives car buyers independent reports on EV performance and battery life, noted in its most recent market review that 2021 used EVs “make up a surprising 17.5% of the inventory.”
The Seattle startup found that used EVs had risen in price by 25% since March 2021. On average, a 2021 Mustang Mach E sold 60% more than last year. Citing what it called “the new normal, high prices are here to stay,” Recurrent said the sales trend of used EVs was sharply skewed toward the most recent model years available.
“Anecdotally, we’ve heard of many owners who have sold quite new cars to dealers and have recouped more than their purchase price, and the numbers show it makes sense,” said Recurrent. “Reselling a car that is barely owned works differently for different cars. Regarding Teslas, the price of new vehicles has risen so much last year, and wait times for new vehicles are so long that the value of used cars has skyrocketed.” Recurrent advises against jumping into the game no if you have a relatively new EVw.
“If you’re an EV owner or a dealer, now is a good time to list a used EV. Since we speculate that prices won’t change much in the coming months, you risk holding on to your car and flooding the market with higher stock.”
If you’re one of the many hoping to get an electric car, “it may not be worth waiting for prices to drop,” Recurrent said.
The restrictions on flipping an EV depend on where you live.
In France, where flippers have resold nearly new EVs for a profit of $10,000 or more, the government changed its energy code in June to prevent electric vehicles bought with government incentives from immediately reselling for a profit. Electric vehicle owners must keep their cars for a year before reselling them.
Germany has a six-month ban on EV resale but is considering an extension to a year-long wait from 2023.
In the US, several states restrict how many cars — EVs or not — a person can buy and resell in a year before needing a car dealership license, which in California requires taking an online course, passing a DMV-administered test, paying fees, and other requirements. The states seek to protect consumers from car thieves and protect unscrupulous salespeople and car dealers from street-level competition.
For example, suppose you’re selling a car for a profit in California. In that case, the California DMV’s Professional Licensing Office said you’ll need a car salesman’s license even if you’re using a car sales auction site as a middleman.
In California, obtaining such a license requires a six-hour course, passing a test, and paying fees. Most EV flippers can’t sell in large quantities anyway because it takes too long to get the cars in the first place. In terms of enforcement, according to California’s DMV investigative agencies, the agency’s primary targets are selling volume without a license or a car-selling lot. Still, it will pay – no pun intended – to play by the rules; breaking it can lead to fines and possible jail time, depending on the seriousness of the case.
Los Angeles resident Wang, a digital marketing consultant to the auto industry who said he’s getting a license to sell, said he’s heard of several EV buyers on waiting lists already negotiating to sell them on delivery. Some want money even faster, he said.
“I’ve heard that some people have put their reservations for a certain price in your name,” Wang said. “There are ways to do it, but it’s super hard.”
It is also possible to weight the golden goose here. Wang recently posted a video to his YouTube channel citing examples of people being banned from buying new Teslas because they resold them too early and too often.
As for cars, Wang is a man who loves them and leaves them behind.
While his recent focus has been on EVs, Wang has flipped several dozen cars over the years, initially buying them off Craigslist and making minor upgrades before selling them. Of course, he remembers the first car he flipped – the car and the win.
“It was a Lexus ES 300. I bought it for $3,000 and sold it for $4,000,” Wang said.
Wang insists he isn’t in it for the money; he wants to drive as many cool cars as possible.
“Life is all about experiences, right? I like cars. And so it just really fulfills my pleasure to be able to drive a lot of different types,” Wang said. “Before this I worked f, or BM W and had 20 BMWs at different times. So it’s the same thing I do with Tesla.”
Wang said his best customers are car dealers.
“I sold one to a private buyer, and then I realized dealers would just give you a check, and that’s even easier” than a private sale, Wang said.
His advice for future car flippers?
“Don’t pay for a lot of extras if it’s not a car you’re going to keep,” he said, “and don’t wait too long to sell it.”
