Tesla has ended in-stock discounts on its entire range of electric vehicles — even as EV sales ticked up — as part of a larger and vague plan by CEO Elon Musk to “streamline Tesla’s entire sales and delivery system.”
“It’s become complex and inefficient,” Musk said wrote in a post on Xthe social media company he owns, in response to another user’s comment.
Musk’s X announcement comes a day after thousands of Tesla workers lost their jobs. The layoffs, which will affect more than 10 percent of staff, or about 14,000 people, were prompted by poor financial performance, a source told TechCrunch.
One of Tesla’s distributors, who was cut this week and spoke to TechCrunch on condition of anonymity, said his location was “short staffed” but still lost many employees. Tesla also appears to have eliminated most job listings — savings a handful of posts related to the Manufacturing Development Program — from the North American careers page, suggesting a hiring freeze.
Rohan Patel, Tesla’s former VP of Public Policy and Business Development, told TechCrunch that he also left the company on Monday due to “[b]ig general changes’ to the company. Patel was one of two high-profile executives to leave Tesla this week, along with Drew Baglino, Tesla’s former vice president of Powertrain and Energy.
The decision to end sales across its entire lineup in the United States, including the Model 3, Model Y, Model S and Model X, is a bit of a moment for Tesla. The company raised prices for most of 2022. The following year, Tesla began regularly cutting prices across all of its vehicles, with some models dropping nearly 20 percent, a practice that has continued this year. In April, Tesla cut the price of several long-range and performance Model Ys by $5,000 and rear-wheel drive versions by more than $7,000.
It also follows last week’s announcement that Tesla will drop the monthly subscription cost of Supervised Full Self-Driving software, Tesla’s advanced driver assistance system, to $99 a month, down from $199 a month.
While the 2023 price cut may have helped Tesla sell a record 1.8 million vehicles, the automaker’s profit margins have shrunk. And in the first quarter of 2024, Tesla’s delivery numbers were down year-over-year. The automaker also built more cars than it shipped, a trend that has continued in seven of the past eight quarters, which may indicate an area where Tesla will renew its focus this year.
In January, Tesla warned that sales growth could be “significantly lower” in 2024 than in previous years as it prepares to launch a new vehicle platform – the $25,000 EV that appears to have been scrapped in favor of the mainstream of a robotaxi until August.
It’s unclear how the elimination of 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 dealer setup (and took years and legal battles to achieve). But beyond the initial purchase, Tesla has almost always made changes to its sales and delivery strategy. The automotive industry has almost always made changes to its sales and delivery strategy.
In late 2018, Musk said this Tesla bought an undisclosed number of trucking companies in order to ship increasing numbers of Model 3 sedans. In early 2019, Musk suddenly announced that Tesla would close many of its retail stores and lay off workers “to achieve the savings needed to provision [the Model 3] and be financially viable. Less than two months later, the company reversed course. Most recently, Tesla announced in late 2022 that the typical end-of-quarter race to build and ship as many cars as possible was proving increasingly difficult. Tesla said it was going to streamline that process — but more than a year later, it’s still dealing with them quarterly bottlenecks.
