New-arrival or second-hand? A direct-to-consumer business model for electric vehicles in the sustainable transportation

To achieve the goal of low-carbon globalization, many countries focus on Tesla’s success in the sustainable transportation. As the circle economy develops, this paper establishes an analytical model to study how Tesla’s online platform retails the new-arrival electric vehicle as well as the second-hand electric vehicle in the direct-to-consumer market. We solve the online platform’s optimal new-arrival price and second-hand price when the customer valuations are heterogeneous over two stages. By defining the customer population and the variable cost as the quantitative indicators, the numerical experiments discuss the results of the customer’s choice behaviour​ and the platform’s intertemporal profit in the direct-to-consumer market. Comparing with the traditional retailers, our analysis summarizes the economic and environmental benefits of Tesla’s direct-to-consumer business model to all stakeholders in the sustainable transportation.