Carvana’s Red-Hot Growth Runs on a Cycle of Borrowed Money
Attacks from short sellers and the collapse of auto lender Tricolor haven’t slowed down America’s most valuable used-car retailer.
Carvana’s reconditioning center in Tolleson, Arizona.
Photograph by Cassidy Araiza for Bloomberg Businessweek
A white 2024 Tesla Model Y slowly rolls down the lane through a crowd of mostly men dressed in golf shirts and jeans. The onlookers, buyers from car dealerships who’ve all descended onto this auction site in Chandler, Arizona, snap photos of the vehicle and place bids by raising their hand or using their phone. A screen hanging nearby lists the current bid at $30,000. The Tesla sits there for barely two minutes before the sale is closed and the driver, wearing a bright orange vest, moves it along. Next up: a tired-looking green 2006 Isuzu Ascender. A burly auctioneer with a dark goatee rhythmically chants, “Homina, homina, homina, opening bid, $1,100.” The screen says grimly that the car is being sold “as is.”