In his time as the North American head of remarketing and certified pre-owned at Tesla, Seneca Giese got a first-hand look at how quickly pre-owned Tesla models were selling.
“Looking ahead, seeing all the planned plug-in vehicles coming to market meant that there's going to be a healthy secondary market eventually,” said Giese, who was with Tesla for nine years and helped launch its CPO program.
That secondary market for EVs is where Giese and Trip Jacobs focus with Current Automotive, the Illinois-based online retailer they co-founded.
Current Automotive, which has a storefront in Naperville, Ill., sells used electric vehicles and used plug-in hybrids online, and is part of the Bill Jacobs Auto Group.
Jacobs (who is Bill Jacobs III) managed a Chicago Tesla store before returning to his family’s business in 2017.
He and Giese launched Current Automotive in July 2018. Since then, Current Automotive has delivered to customers in 30 states
“Even though we have a physical presence in the Chicago metro area, over half of our business is out of state. It's really focused online. Very much price driven. Tesla's our most popular product. I feel like that's because of our expertise, having worked there,” said Giese, who was one of Tesla’s first 200 employees, according to the Current website. “But we really want to represent and be good stewards of all electrified cars.”
As of Monday afternoon, 10 of the 31 vehicles listed on the Current website were Teslas, but Audi, Acura, BMW, Chevrolet, Ford, Honda, Kia, Lexus, Mitsubishi, Nissan, Toyota and Volvo were represented, as well.
"In my humble opinion, I think the reason electric vehicles haven’t taken off as much as Tesla sales have, (is that) people haven’t driven them. Once they drive an electric car, they're blown away at the torque, the silence, just the overall experience,” Giese said.
"We're at the verge of a tipping point with all these other OEMs hitting the market with EVs, such as Audi, Mercedes, Porsche,” he said. “I think everybody sort of feels the sea-change coming."
The buying process
While the market may be on the verge of greater adoption, Giese said EVs require a “concierge-style service” since they’re still relatively new to most drivers.
And part of that is explaining to consumers how the cars are charged, which is an area that Jacobs finds is in need of improvement in auto retail.
“And most frontline salespeople don’t really have an idea of the nuances and intricacies involved in getting charging installed, how you do it, how much it costs, how long it takes. And so, there's a lot of questions around that, that traditionally in most dealer settings aren’t really answered effectively,” Jacobs said.
“And that's something else that we focus on as part of our sales process to really make people comfortable, not only with the car they're buying, but with their ability to use that car and fuel that car long-term.”
As far as how that process works for the end consumer, Jacobs described it as “simple” and one that’s fairly similar to other online-based retailers.
A shopper might end up on Current site after seeing its inventory on places like CarGurus or Autotrader. Once there, the shopper can take care of most of the purchase process, including setting up financing and shipping.
Current offers e-signing where possible; otherwise they use a notary service.
“We’re trying to sprint to a digital checkout process as soon as regulations allow it,” Giese said.
Where Current sources cars
In terms of trade-ins, if the customer has a gas-powered car, Current will wholesale it.
“If we can get a customer very close to a retail number for their trade-in value, that's great. We'll give that to them. Because we know we've got that in our back pocket when we wholesale the car to whoever that buyer is,” Giese said.
"And that's through ACV Auctions' live appraisal, TradeRev's live appraisal. We even have contacts at Carvana and Vroom to potentially sell the cars to them, as well. We're just sort of flexing our network, if you will, of contacts in the industry to maximize our ability to help a customer transition into an electrified car,” he said. “I like to say we don’t sell cars, we help people purchase them."
Giese confirmed via email that the company does offer trade-ins to online customers, and it will “leverage relationships with other online retailers to facilitate them.”
As far as where Current purchases their cars, they do turn to the auctions, but prefers to go the private-party route when buying Tesla vehicles.
“One of the things we learned at Tesla is that there's a really quick upgrade cycle — very similar to Apple, if you will,” Giese said.
"I think unprecedented in the industry, Tesla iterates their product offering so quickly, they don't wait for a model-year change. And because of that, when they do come out with, say, new hardware such as Autopilot version 2, even people that have only had a car for a year with the older hardware, want to get into the newest version. It's really incredible.
“And so we got a little lucky here, I think, spinning up over the summer, when Model 3 production was ramping and then Tesla announced all-wheel drive and the performance version of the Model 3, everyone that had a rear-wheel drive — not everyone, but a good majority — wanted to get into an all-wheel-drive or a performance Model 3, so they put their car up for sale.
"And we started making offers to purchase those cars and build a healthy inventory of pre-owned Model 3s,” Giese said. “I have to believe we're probably the pre-owned Model 3 sales leader in the country since the summer of last year.”
As of the late February phone interview, Current had sold more than 40 pre-owned Model 3s so far.
Next on the roadmap
So, what’s next for Current? Giese said that last year was focusing on “proof of concept,” and the company is now “formalizing that.” Still a small group, Current hired two employees in February to work with Giese and Jacobs.
Giese said the company plans to continue growing by buying cars, noting that it’s possible they will look for investors to help them open new locations, which would help boost their reach and speed up conversion.
“We want to be able to put cars where the majority of these types of vehicles are sold,” Giese said.
For instance, California or the East Coast. The point being, they want to be where new EVs are sold, since the used vehicles would tend to return from leases and into the auction lanes in those same areas, Giese said.
“But Teslas, they’re everywhere. So, we don't want to have all of our eggs in one basket. Anything can happen with them,” Giese said.
He went on to note the excitement the company has about new entrants in the market, as well.
“All these companies coming to market with really, we think, great products. And we want to represent those as soon as they hit the secondary market,” Giese said. “And if there’s a new OEM, EV entrant into the United States that decides to franchise, we hope that we can raise our hands and be considered for that given our history building Tesla.”