Aside from Model 3 deliveries starting to ramp up during the second half of the year, Tesla aims to deliver more Model S and Model X vehicles than the 47,000 they delivered during the first half.
Now with just a month left in the third quarter, Tesla is offering showroom discounts and lowering interest rates to boost sales before the end of the quarter.
Tesla offering discounts to boost sales has been a controversial subject in the past.
Aside from the $1,000 discount with the referral program and other discounts on display models, loaners, and test drive vehicles, Tesla made a policy out of always offering the same prices everywhere aside from the difference through exchange rates and import duties.
Elon Musk referred to it as a “no negotiation and no discount policy”, which differentiate Tesla from the dealership model.
But at the end of last year, Tesla was in a full ‘end-of-the-quarter push’ with more inventory cars and buyers reporting unusual discounts.
Musk sent an email to all employees to put an end to discounts and made a public stand about it.
Tesla employees have since been more careful about how they presented discounts to customers, but there have still been some unusual discounts from time to time.
But Musk made it clear that it was “fine to have a discount on cars that have been floor models”.
This week, several owners reported receiving a variation of this email offering a ‘up to $30,000’ showroom discount on P100D vehicles:
I hope this email finds you well.
I’m reaching out because we just announced an incentive on Model S and Model X P100D that I thought you may be interested in.
We are offering showroom incentives up to $30,000 off the original configuration price. This means you can lease Model S P100D for $1,500/month and Model X P100D for $1,600/month with 10,000 miles per year. Alternatively we are offering .99% APR financing or a cash purchase with the discount. These incentives are available for deliveries by September 30th 2017.
Lastly, we’ve reintroduced the Tesla Referral Program. You will receive a $1,000 credit towards the purchase of either a new Model S or Model X and Free Unlimited Supercharging.
It would be my pleasure to help you explore the options for a new Model S or Model X. If you are interested we can schedule a time for a call or if it is more convenient we can communicate via email.
*********| Sales Advisor
This impressive advertised discount here on some Model S and Model X P100D vehicles come just as Tesla lowered the price of the same custom ordered version of the vehicles by $5,000 and rebundled some options. It makes the mention of “off the original configuration price” the important distinction here since that vehicle might have been more expensive when new than a similar vehicle with the same options today.
That’s what is likely increasing the advertised amount of the discount to “up to $30,000”, but you could be getting a similar value in term of options due to recent changes in pricing.
Furthermore, those vehicles are often listed as “new inventory” from Tesla and have some mileage – though it can sometimes only be 50 to a few hundred miles. For the discount to reach “up to $30,000”, it could be in the low thousands of miles and a buyer might expect some wear and tear.
You can look at Tesla’s “new inventory” page on its website for examples of those vehicles, which are all referred to as showroom vehicles.
Also, as you can see, a delivery by the end of the quarter is a requirement for the discount on the showroom models, which can be delivered faster than a new custom order today.
Tesla has also been lowering its interest rates. In the US, it has been lowered to 0.99%, but the automaker also announced rates down to just 0.25% in other markets, like in Norway, until the end of the quarter.
Update: Tesla issued a statement regarding the email above:Recently, an unauthorized and inaccurate email from a Tesla sales associate was circulated that directly contradicted Tesla’s sales principles. This email suggested that Tesla was offering a $30k showroom discount, when in fact we have a strict no negotiation and no discount policy. This has been true since we first started taking orders more than ten years ago, a fact we reaffirmed last year. There are zero exceptions to that policy: every Tesla customer pays the same amount for the same car, period. That is true for Elon, friends and family of the company, or anyone else.What the sales associate was referring to was not a discount on a new car from the factory. He was referring to a pricing adjustment that is made to test drive vehicles, service loaners, cars that had been damaged and then repaired, or old models, as these cars have wear and tear, mileage, or discontinued features. Naturally, the more miles, wear and tear, or discontinued features that a car has, the greater the pricing adjustment that is made.No Tesla customer ever has to be concerned about not getting a “good deal.” A “good deal” is code for how a company takes advantage of a customer. We don’t do “deals.” We treat everyone the same. This will never change, ever.
There has been speculation about Tesla having difficulties achieving its sale target for the second half of the year after the company confirmed adding a new $700,000 incentive to the compensation plan of Jon McNeill, Tesla’s President of Sales and Services, just linked to reaching third and fourth quarter 2017 goals.
Now those discounts are sure to add to the speculation, but it’s important to keep in mind that Tesla made that delivery guidance already a month into the quarter with a backlog of orders, therefore, they generally have a good idea of what they are going to deliver in the next 2 months.
The discounts are generally to help the company get rid of some inventory that can be delivered more quickly than custom ordered vehicles.
What do you think? Let us know in the comment section below.
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