Since it first began taking online orders from customers, It has been Tesla’s policy to not offer discounts on its brand-new cars.
But as the company pushes to meet aggressive delivery targets, reports have recently surfaced indicating that Tesla is wavering.
In response to those reports, Tesla Motors CEO Elon Musk laid down the law.
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He urged employees to adhere to the policy of not discounting cars, calling it “fundamental to our integrity,” according to Bloomberg.
The reinforcement of the no-discount policy comes amid a push to increase sales and revenue in the third quarter.
In an August 29 e-mail, Musk begged employees to cut costs, and work to deliver as many cars as possible.
Tesla store under construction, Van Ness Ave, San Francisco [photo: BlueStarE3 on Tesla Motors Club]
But he apparently does not intend to resort to discounting new cars in order to achieve that goal.
Musk’s discount declaration was issued in response to a research note to investment clients about Tesla Motors [NSDQ:TSLA] by Brad Erickson, an analyst at Pacific Crest Securities.
“We detected aggressive Model S discounting at U.S. sales centers” aimed at boosting Q3 deliveries, Erickson wrote.
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He said Tesla was employing a “deeper discounting formula” on inventory cars. These are cars not made to order for specific customers.
A Tesla customer also posted on Reddit that he had been offered a discount.
Musk responded to that claim on Twitter, first saying he would look into the matter, and then posting that “corrective action” had been taken.
He also sent an e-mail to employees saying that it was fine to discount floor models, cars that had been used in test drives, or cars that had been damaged during delivery.
But discounting a car fresh from the factory “when there is no underlying rationale” is not permissible, he said.
Musk was adamant that Tesla not resort to discounts, despite the push to maximize Q3 deliveries.
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The company has said it will deliver 50,000 cars in the second half of this year, which will be crucial to meeting its projection of 80,000 to 90,000 deliveries for the full year.
Tesla missed its first two quarterly sales targets this year, and delivered 29,190 cars in the first six months of 2016.
Its deliveries for all of last year were just slightly more than 50,000 units.
[hat tip: Brian Henderson]
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