Tesla (TSLA) is giving a $3,750 discount, which it is calling a “price adjustment,” for every Model 3 and Model Y vehicle delivered in the US in December.
The move appears to be to encourage people to take delivery right now rather than wait for the tax credit to take effect in 2023.
Yesterday, we reported that Tesla is seeing some level of cancellation in the US right now for two main reasons:
- Long wait times are leading to some customers’ situations changing between the time they place their order and the actual delivery – resulting in cancellation. That’s quite frequent.
- In a more special situation, Tesla is also dealing with some customers looking to push their deliveries into next year to take advantage of the upcoming new EV tax credit. As we previously reported, Tesla is not as accommodating as other automakers when it comes to the new EV tax credit, and it is holding its customers to their order contracts – again resulting in cancellations.
We also noted that while there are signs of demand issues leading to Tesla not matching vehicles to buyers at the end of the quarter, it shouldn’t be a massive problem unless we see Tesla reduce the price of its vehicles.
Today, Electrek learned from sources familiar with the matter that it is offering “a $3,750 credit” for every customer taking delivery of a Model 3 or Model Y vehicle in the US in December.
Tesla communicated to its sales staff that the offer is temporary and only for customers taking delivery this month.
This amount happens to be half the $7,500 tax credit that is going to go into effect next month. Some automakers anticipate their electric vehicles to only be eligible for half the tax credit due to battery material and assembly origin requirements.
Tesla appears to be encouraging people to take delivery this month rather than wait for the tax credit in order not to be sitting on a lot of unsold inventory at the end of the quarter.
This is an unusual move for Tesla. CEO Elon Musk has often stated that Tesla “doesn’t offer discounts” and that its policy is to have consistent and transparent pricing across all markets.
Top comment by Mark
I would be shocked if Tesla or any other manufacturer escapes the effects of elevated interest rates, the prospect of a looming recession (arguably already taking place), growing layoffs, and inflation. I work for a national homebuilder and we have been heavily incentivizing our homes recently to get every sale we can (and believe me, there are hardly any as of late). I would not bee too worried about a demand problem at Tesla. I would be more worried about a general demand problem for ALL big ticket items being sold to consumers EVERYWHERE. Tesla long term fundamentals are great, but they are not going to be insulated from market forces. That's also not a bad thing...its just the cyclical nature of the automotive industry or any industry that sells large ticket items that typically require a loan, proof of employment, etc. What is important is to see just how well Tesla weathers the storm compared to a traditional automotive manufacturer.
Well, I said not to worry about demand until Tesla starts to offer discounts. Here it is.
But again, I wouldn’t worry too much about it since it’s clearly due to special circumstances with the tax credit coming into effect.
Everything points to demand coming back in a big way next month when the tax credit comes into effect.
What do you think? Let us know in the comment section below.
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