What Is EV Flipping and Who’s Doing It?

Model S Plaid in Black

You’ve probably heard of house flipping. Unlike fixing up a home and reselling it, EV flipping involves hunting out the most desirable EVs and reselling them for a profit. It relies on scarce supply and red-hot demand.

But how does EV flipping work, who’s doing it, and is it a short-term trend?

What Is EV Flipping?

While anything can theoretically be bought and sold for a profit, it helps if supply and demand are widely asymmetrical.

Just like the persistent PS5 shortages, the global backlog of chips, coupled with other logistical issues, means the wait time for some EVs is long—as in years—if you can even get one from the manufacturer. Many EVs are sold out, and will remain so for some time.

Though all EVs are hard to come by, certain ones are rare and highly sought after; this is the perfect combination for flipping.

EV flippers obtain their ‘”inventory” in a few ways. They can reserve one, purchase one on the open market, or, if they have a dealer’s license, obtain one from an auction.

1. Reservations

Some people reserve EVs with the express intent of selling them. Just like Sneaker Bots enable scalpers to purchase items more quickly than a human could, timing is critical. For example, the GMC Hummer EV has around 70,000 orders, and GM can produce 12 per day. The earlier you are in the queue, the greater potential for flipping at a higher profit.

Even with an early reservation number, you may not know when an EV will arrive. For example, many people are trying to figure out when they’ll have their Tesla Cybertruck based on their reservation number.

Image Credit: Phillip Stewart/Flickr

2. On the Open Market

While this is probably the least likely place to find an EV to flip, one could get fortunate, either online or at an estate sale.

You might be able to capitalize on geographic pricing differences. A vehicle sold to settle an estate in the Midwest might be worth more on the East Coast. Buying EVs in the wild at a price that allows flippers to make a profit requires a lot of searching, but it’s possible.

3. At Dealer Auctions

While it might seem that having a dealer license would make one a dealer vs. a flipper, some individuals obtain dealer licenses without storefronts. Certain states have less stringent requirements, and this allows people to obtain a dealer license and thus gain access to dealer-only auctions. Even if they can do this, the highest barrier to entry is…

The Capital Required to Flip EVs

Because EV flippers need to have the title in hand for a clean sale, they need substantial liquidity. Financing the vehicle would create a lien (because the bank holds the title until the loan is paid off) and make resale tricky and time-consuming. Most buyers don’t want to have to pay off a loan in a private party sale situation.

As long as you have the title and disclose any known defects, EV flipping is perfectly legal in the US. Whether it’s morally right… that’s another question.

Which EVs Are Best For Flipping?

Numerous factors drive EV demand. While some people are interested in purchasing used EVs that qualify for the tax credit, others want something rare such as the Rivian R1T.

2022 Rivian R1T in the mountains
Image Credit: Rivian

The Seattle Times reported on Tesla owners flipping their vehicles for a profit due to long lead times. Essentially, any EV with amazing features, like the Tesla Model S Plaid, which is hard to get, is a good candidate for EV flipping.

How Long Will EV Flipping Be Profitable?

No one can say for sure, but as long as demand outstrips supply, EV flipping will be a thing.

However, wholesale (auction) pricing is starting to show signs of softening across the board. If this trend continues, flipping will only be lucrative for those EVs where supply is very low, and demand is fierce. If manufacturers find new suppliers for components, attract more workers, or streamline production methods, the pace of production would pick up, and that would alleviate the supply-side problem.

The Future of EV Flipping

EV flipping is likely here to stay for several years as the world economy recovers from the pandemic. While some people think EV flipping is nothing more than glorified scalping, it continues to be profitable. As long as people have more money than patience, the trend will continue.

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