Tesla and its CEO Elon Musk have sparked controversy once again by adding a clause to its purchase agreements that prohibits buyers of its upcoming Cybertruck from reselling the vehicle for one year. The strict policy risks damping enthusiasm right before the first units of the futuristic electric pick-up will start to be delivered.

Buried in the fine print of Tesla’s vehicle purchase terms there is a new section labeled “For Cybertruck Only” that states that customers cannot sell or transfer ownership of their Cybertruck for the first 12 months after delivery.

Tesla claims that the temporary sales ban is necessary to avoid resellers upselling the Cybertruck as it will have limited availability initially. However, the move has drawn backlash from some customers who don’t want any kind of restrictions on such an expensive purchase.

Customers Will Face Financial Penalties for Violating the Provision

tesla resale clause

The terms outline severe penalties if a customer violates the resale provision. Tesla (TSLA) says it may pursue legal action to block any unlawful sale during the first year of ownership.

The company reserves the right to demand up to $50,000 in damages for breaching the clause. In addition, any violation of the one-year resale ban could result in an outright refusal by Tesla to sell the same customer any other vehicles in the future.

These stringent penalties are designed to deter buyers from quickly flipping their scarce new Cybertrucks for a profit.

The Path to Approved Resale Involves Giving Tesla the Priority to Repurchase

The agreement does provide a process for Cybertruck owners to request Tesla’s permission to resell within the first year. Customers who have an urgent reason to sell can notify Tesla in writing and give the company the right of first refusal to buy back the vehicle.

If Tesla opts to repurchase the truck, it will pay the original purchase price minus deductions for mileage, wear and tear, and any repairs needed. Tesla can then resell the Cybertruck directly rather than losing the profit to a third-party reseller.

If Tesla passes on buying back the Cybertruck, the owner may sell to someone else after receiving written consent. So, resales are possible in exceptional cases, but only with explicit approval from Tesla.

Why Is Tesla Opting to Enforce this Clause?

The one-year resale restriction imposed by Tesla is certainly controversial but it could actually be a positive move for consumers. The provision aims to deter speculative buyers who create “chaos” by immediately flipping scarce new vehicles, driving prices up.

By allowing unapproved resales within the first year, Tesla would be rewarding scalpers trying to profit off initial scarcity and not loyal customers who have a legitimate desire to use the product. By limiting this behavior, Tesla is aiming to ensure that Cybertrucks go to genuine customers rather than opportunistic middlemen.

Also read: 4 Years After the Cybertruck’s Unveiling, It’s Finally in Production and Only 2 Years Late

That said, the head of the electric vehicle maker, Elon Musk, has hinted that the resale clause may not remain in effect permanently. He suggested that it could be relaxed once Cybertruck production is scaled to meet the market’s demand. For now, the constraint aims to discourage those just “hoping to make a quick buck” as initial deliveries begin.

Mixed Reactions from Customers

Many who reserved the $40,000 and up electric truck expressed disappointment about losing the right to freely resell it for a whole year. On Tesla’s forums and social media, the restriction was slammed as overreaching and controlling.

A common complaint is that once purchased, vehicles become the owner’s property. Buyers said that they should not face any kind of restrictions on selling something they paid for outright.

Others argued that the policy seems poised to mainly benefit Tesla, giving the company more control over the Cybertruck market. Critics emphasize that Tesla is trying to capture maximum profits on its hotly anticipated new EV.

Some customers did acknowledge and agreed to the rationale, as long as the one-year limitation remains temporary. They want to see the clause removed once Cybertruck production is high enough to meet demand.

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Resale restrictions like Tesla’s Cybertruck policy are rare in the auto industry. Some luxury and sports car makers have imposed constraints on owners reselling limited production models because dealers and resellers have driven the price of many of the most desirable vehicles up so much that they are entirely unreachable for most people.

However, Tesla’s anti-reselling clause is almost unheard of for a mass-market vehicle.

Many buyers interested in the Cybertruck are regular consumers, not wealthy supercar collectors accustomed to accepting strict sales conditions. So Tesla risks aggravating its mainstream customers with a rule that treats them like luxury car buyers.

While the measure can be justified to limit opportunistic speculation, the move also gives Tesla more control over the Cybertruck’s value. The policy could help shore up prices in the first year and maximize Tesla’s share of any increase in the selling price.

The Cybertruck Factor

The Cybertruck has generated astonishing hype since its 2019 unveiling. With its angular stainless steel body and high-tech features, the pickup has captured the public’s imagination like no other.

Given the insane demand, some buyers were undoubtedly planning to flip their trucks almost immediately to turn a profit. So Tesla does have reason to fear a speculative frenzy as the first deliveries commence.

But establishing an outright one-year ban on resales marks an unprecedented and aggressive attempt to control that situation. It also highlights the Cybertruck’s uniquely feverish demand relative to any normal new car or truck launch.

What remains to be seen is how strictly Tesla will enforce violations and whether the clause disappears once production is smoothly ramped up. For now, potential owners must weigh whether the groundbreaking Cybertruck is worth accepting these limitations on reselling its cybernetic charms.