Some buyers are taking advantage of the long EV wait times and turning high demand into serious profits.
- Buyers of popular electric vehicle (EV) models sometimes have to wait for years before receiving their vehicle.
- Some buyers are using these wait times to “flip” vehicles for cash.
- Vehicle flipping was previously a practice relegated to sports cars made in small batches, but the long wait times for desirable EVs has led to the practice spreading.
- Flippers will buy an early model of the vehicle, then sell it for a profit to someone who doesn’t want to deal with long wait times, often doubling what they paid.
Why it’s news
For buyers fortunate enough to be early in line for desirable EVs, flipping is becoming a valuable tool for extra income.
The Ford Lightning, for example, starts at around $40,000. The same model can sell for as much as $97,000 at auction. GMC Hummers have the most dramatic price difference. The vehicles start at $110,000 and can sell for nearly $200,000.
Some manufacturers are putting up safeguards to protect against flippers. Tesla, for example, has a clause in its contract stating that it will cancel any reservations of suspected flippers.
In 2017, Ford sued actor and wrestler John Cena for selling his Ford GT just a few months after receiving it. Ford claimed the actor was under contract to keep the vehicle for at least two years. Cena and Ford settled the dispute for an undisclosed amount.
General Motors is also beginning to take steps to prevent resale of its vehicles. If the EV Hummer is sold within the first six months after purchase, GM will void the warranty on the vehicle. Flippers will also likely be blackballed on future purchases.
Though companies are trying to fight flipping, it’s likely the practice will die out on its own once manufacturers catch up to demand, though that is likely to take a few years.
Some important numbers
For the most part, buyers are making EV purchases because they want the vehicle, so the flipper market is still relatively small. Last year Ford released around 2,000 Lightnings and only a little over 30 were sent to auction.
Rivian Automotive sees a higher number of its vehicles sold at auction, in part due to a recent price hike. In March, the company raised the base price of its R1T pick up to $80,000. Customers who bought before the price increase can now enjoy a comfortable profit margin.
More than 50 of the trucks sold at online auctions for more than $100,000, Bloomberg reports.