A $TSLA bro comes into my store yesterday wanting to trade his M3 for a Dodge Charger. My sales mgr calls me asking me to get involved in the valuation. I laugh, thinking he's harassing me, but then remember that none of my employees know anything about the $TSLAQ cabal.

So, the customer brings the car to my building and I begin to evaluate. I've basically never been close to a M3. I've only ever driven one $TSLA & that was a MS, and only once. Keep in mind that we're in semi-rural Alabama. I own two domestic stores & sell primarily used trucks.

As I circle the car, the customer educates me on franchise laws and explains that $TSLA doesn't sell cars in AL for that reason. I don't share my thoughts on the subject ("duh, who do you think pays to keep those laws in force???" - maybe he doesn't realize I'm the dealer).

This is bc all car mfrs would F every dealer into oblivion given the opportunity. They already put us in the hole on EVs & hybrids by requiring massive investment in tools & training, & allow almost no markup (<1% in some cases), based on the rationale that they're losing $$$...

in production of the vehicles. But, I digress.... The M3 in question is perfect. No dings, no scratches, no curb rash - immaculately clean interior. It does have 32k miles, however. The cust says he wants $40k for the car. I look it up on MMR and get these results:

From this, I think he may not be far off on his valuation. The highest mile result had <19k miles, but sold for $43.5k a few weeks ago. $40k still feels a little high to me, however. I tell him I want to do a little more research and head back to my office.

On my way back, I recall him explaining that his phone was the key and I think, "how the F am I going to deal with this car if I trade for it? I have 500 cars on my lot and am not going to install some damn s/w on my phone so I can drive just this one!"

Additionally, I'll point out that the problems customers experience in getting warranty/svc work via $TSLA would be magnified if I owned the car. If it had any problem, I'd have to ship it to Atlanta and would expect to be the last priority in their shop given that I'm a dealer.

Finally, while appraising, I noticed that there's not a digit in the VIN differentiating between mid range and long range. I had to take the customer's word for it. But it made me curious as to what would happen if I sent this car to auction.

Bidders get about 30 seconds/car at auction. How would anyone determine if the car was actually a LR car while it's running through the lane? Take my word for it?? Doubtful.

I get to my office and decide to do some retail research. This is what I find on Autotrader:

There are 163 2018/2019 M3s w <15k miles currently for sale on AT. Most of them are listed by $CVNA. We've debated the nature of the $CVNA/$TSLA relationship here a bit, and I have no knowledge who actually owns the Teslas being offered by $CVNA. It's worth considering however...

that auction values of $40k+ for 2018 M3s with 20k miles must decrease, so long as there are 2019s with <500 miles being retailed by $CVNA for <$42k. Based on the AT results, I advise my sales mgr that this 2018 M3 is worth $30k at most - not $40k. Knowing this isn't a car deal,

I advise my sls mgr to educate the cust via the AT results. My short thesis has never been about the product or the mission - only the financials. (I actually have env science in my background, but $TSLA is an amazing short from a finance perspective.)

I did gain some useful takeaways from this brief encounter that inform my thesis:

- A car needs a f'ing key
- The MR/LR issue is a problem in the aftermkt
- 1 yr depr on a M3 w/ avg usage is >40%
- The $CVNA/ $TSLA relationship is a small scale liquidation experiment

There’s a photo of the car with my Ford store in the background - for the skeptics. We use an appraisal tool that allows salesppl to submit photos of cars. Didn’t expect this thread to be considered fake news. Go figure.