Tesla (TSLA) Ends Car Buyback Program, Stock Falls
Tesla (TSLA) ended its resale value guarantee program as of July 1.
NEW YORK (TheStreet) — Tesla Motors (TSLA) said it discontinued its resale value guarantee program that assured buyers cars would retain value over time, Reutersreports.
Additionally, the Palo Alto, CA-based electric car maker lowered the starting price of its Model X crossover, which marks the second time it has reduced prices this year.
Shares of Tesla are down 0.89% to $222.65 late Wednesday afternoon.
The end of the buyback as of July 1 shows that the company is stepping back on a pledge that started in 2013 that Tesla would repurchase its cars financed through certain loan partners for a predetermined resale value after three years, Reuterssaid.
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A Tesla spokesperson told Reuters the program was ended to “keep interest rates as low as possible and offer a compelling lease and loan program to customers.”
Separately, TheStreet Ratings Team has a “Sell” rating with a score of D+ on the stock.
The company’s weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its “risk-adjusted” total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer’s view or that of this articles’s author.
You can view the full analysis from the report here: TSLA