Tesla ditches EV inventory discounts to ‘streamline’ sales and delivery

Tesla has ended inventory discounts on its line of electric vehicles — even as EV sales have declined — as part of a broader, vague plan from CEO Elon Musk to “streamline the entire Tesla’s sales and delivery system.

“It has become complex and inefficient,” Musk wrote in an article onthe social media company he owns, in response to another user’s comment.

Musk’s X announcement comes a day after thousands of Tesla employees lost their jobs. The layoffs, which will affect more than 10% of staff, or about 14,000 people, were caused by poor financial performance, a source told TechCrunch.

One of the Tesla delivery drivers who was laid off this week and who spoke to TechCrunch on condition of anonymity said his site was understaffed, but still lost several employees. Tesla also appears to have removed most job postings – except for a handful of postings related to its manufacturing development program – from its North America careers page, suggesting a hiring freeze.

Rohan Patel, Tesla’s former vice president of public policy and business development, told TechCrunch that he also left the company on Monday due to “(b)ig overall changes” at the company. Patel was one of two high-profile executives to leave Tesla this week, alongside Drew Baglino, Tesla’s former senior vice president of powertrain and energy.

The decision to end discounts on its U.S. lineup, including the Model 3, Model Y, Model S and Model X, is a bit of a shot in the arm for Tesla. The company raised prices for most of 2022. The following year, Tesla began steadily lowering prices on all of its vehicles, with some models seeing a drop of nearly 20%, a practice that has continued This year. In April, Tesla lowered the price of many long-range, performance Model Ys by $5,000 and that of real-wheel drive versions by more than $7,000.

This also follows last week’s announcement that Tesla would reduce the monthly subscription cost of its Supervised Full Self-Driving software, Tesla’s advanced driver assistance system, to $99 per month, compared to $199 per month.

Although the 2023 price drop may have helped Tesla sell a record 1.8 million vehicles, the automaker’s margins have declined. And in the first quarter of 2024, Tesla’s delivery numbers fell year-over-year. The automaker also built more cars than it shipped, a trend that has continued in seven of the last eight quarters, which could indicate an area where Tesla will renew its focus this year.

In January, Tesla warned that sales growth could be “significantly lower” in 2024 compared to previous years, as it prepares to launch a new vehicle platform – the $25,000 electric vehicle that appears to have been scrapped in favor of launching a robo-taxi by August.

It’s unclear how removing discounts on Tesla vehicles fits into the automaker’s new strategy to streamline sales and delivery. Tesla could not be reached for comment.

Tesla has received a lot of credit for its direct sales model, which bypasses the traditional dealership setup (and took many years and legal battles to achieve). But beyond the initial purchase, Tesla has almost always changed its sales and delivery strategy. The automaker has almost always changed its sales and delivery strategy.

In late 2018, Musk said Tesla had purchased an undisclosed number of trucking companies in order to ship an increasing number of Model 3 sedans. In early 2019, Musk abruptly announced that Tesla would close many of its retail stores and lay off workers. employees “to achieve the savings necessary to deliver (Model 3) and be financially viable. Less than two months later, the company reversed course. Most recently, Tesla announced in late 2022 that its typical end-of-quarter rush to make and ship as many cars as possible was proving increasingly difficult. Tesla said it was going to make this process easier, but more than a year later, it’s still struggling with these quarterly bottlenecks.