Tesla changes end-of-quarter incentives after some ‘abuse’

Tesla had to make some adjustments to the previously reported incentives for customers that were implemented for an end-of-the-quarter push as there was some “abuse.”

Last week, we reported that Tesla started to allows its sales staff to offer discounts and 2 years of free Supercharging to help cars get delivered by the end of the quarter.

The “discounts” were the result of Tesla authorizing sales staff to waive the fees of up to two features, also known as “deviations”, to match orders with inventory vehicles, which can result in important discounts.

The features were limited to paint colors, interior, and wheels.

After we published our report, Tesla CEO Elon Musk said that he would look into the situation:

This article is based on my report from yesterday: https://t.co/9oU6VwU7dv

The 2-yr Supercharging is not that different from 2k miles so meh, but the issue is about 2 free deviations for inventory orders, which could be seen as discounts. though that's more of a logistics issue

— Fred Lambert (@FredericLambert) September 14, 2019

Now we’ve learned that the automaker changed the incentive program this week after telling its staff that they miscommunicated the incentives.

A source familiar with the matter told Electrek that there was some “abuse” and sales staff were working with new buyers to order new cars with the discounts to match inventory vehicles instead of matching orders to inventory vehicles for quicker deliveries.

Tesla ended up stopping sales advisors from being able to offer those deviations, according to sources talking to Electrek.

Now everything has to be approved by a manager and an inside sales team is instead responsible for trying to match orders with inventory vehicles and they can offer the discounted “deviations” to deliver the cars by the end of the month.

The 2-years of free Supercharging can still be offered for people taking delivery by the end of the quarter.

Electrek’s Take

It sounds like they meant the discounts more as a delivery incentive than a sale incentive, but it wasn’t used like that by some customers or some of the sales staff.

Tesla wants the feature deviations to be offered for free for existing orders if it can help deliver the vehicle by the end of the quarter, but it doesn’t want them to be used as an incentive for new sales.

Or at least that’s what they are saying now, but it wasn’t understood like that by many Tesla employees at first according to sources.

Either way, it is still resulting in discounts for some and none for others, which isn’t Tesla’s goal according to Elon.

However, he seems to justify it as a logistical and inventory issue:

Should note that these product mix & logistics errors also results in regional *undersupply*, eg UK & Ireland right now, but we don’t raise the prices even so. The intent, at any given moment in time, is: heads we lose, tails buyers win.

— Elon Musk (@elonmusk) September 14, 2019

The automaker is still pushing hard to deliver more vehicles by the end of the quarter, but we don’t know the exact target.

Last quarter, Tesla smashed its global delivery record, with over 95,000 electric cars delivered during the quarter.

The company could be aiming for 100,000 vehicles, which would be hard to achieve, but it would be quite a milestone.