There are reports emerging now that Tesla has been offering discounts on certain vehicle models in order to help move its current inventory. Company founder and CEO Elon Musk, however, is saying it’s not supposed to happen. Nonetheless, he admits that discounts were given “to a small number of cases worldwide.”
“We found Tesla has been employing a deeper discounting formula to drive sales of inventory models, with all offers expiring this Friday, the last day of the quarter.”
This is what Brad Erickson has recently discovered. He is an analyst from Pacific Crest and has spent some time talking with 20 Tesla sales centers located across the United States.
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So far, Street Insider reports that Erickson believes that Tesla is still on track for its delivery forecast. However, it is employing “various discounting mechanisms” to stay on track with deliveries for Model X going above the forecast of 9,000 and Model S deliveries a little below the forecast of 13,000. For the Model S, the 60 kWH variant also happens to be moving better than the 75kWh available option.
Recently, Musk took Twitter to clarify his stance on discounting. As far as he is concerned, he wants “zero cases” of it.
“The acid test is that if you can’t explain to a customer who paid full price why another customer didn’t without being embarrassed, then it is not right. We either win a way that is fair and right or we lose with our honor intact and accept the consequences.”
He wrote in an internal email that he has since made public. In the same email that, Forbes reports, was sent to everyone in Tesla, Musk also pointed out that from now on, a car will only be counted as delivered strictly when it is actually delivered to a customer. “Title transfer along is irrelevant,” he emphasized.
Moving forward, the CEO also said he will personally be reviewing cases wherein a car was sold below its list price.
For the record, Musk says he does allow discounts on cars, but only for floor models that have already been used for test drives. Finally, discounts may also be given for those vehicles that were damaged during delivery.
Following Musk’s release of the internal company email, Tesla’s stock is up slightly by 0.224 percent to $206.27.
Corrective action taken. Seems to be limited to a small number of cases, but thanks for letting me know. pic.twitter.com/Rx3YWb8JkI
— Elon Musk (@elonmusk) September 28, 2016