Tesla Shifts Gears: No More Discounts on EV Inventory

Tesla has made a surprising move by ending discounts on its electric vehicle (EV) inventory across the board. This decision comes as part of a broader plan by CEO Elon Musk to “streamline the whole Tesla sales and delivery system.” But what does this mean for the company and its customers?

Image: Tesla Electric Vehicle

Musk announced the change on X, the social media platform he owns, stating that the current system has become “complex and inefficient.” This move comes on the heels of a major restructuring effort at Tesla, which has seen over 10% of its staff, or around 14,000 people, lose their jobs. The layoffs are reportedly due to poor financial performance.

Image: Tesla Factory

One of the affected employees, a delivery worker who wished to remain anonymous, told us that their location was already short-staffed before the layoffs. Meanwhile, Tesla has removed most job listings from its North America careers page, suggesting a hiring freeze.

Image: Tesla Job Listings

Rohan Patel, formerly Tesla’s VP of Public Policy and Business Development, also left the company this week, citing “big overall changes” at the company. Patel was one of two high-profile executives to depart Tesla this week, alongside Drew Baglino, formerly Tesla’s SVP of Powertrain and Energy.

Image: Tesla Executives

The decision to end discounts on Tesla’s EVs, including the Model 3, Model Y, Model S, and Model X, marks a significant shift in the company’s strategy. Just last year, Tesla raised prices for most of 2022, only to start dropping them again in 2023. In April, the company dropped the price of many long-range and performance Model Ys by $5,000 and rear-wheel drive versions by more than $7,000.

Image: Tesla Model Y

This move also follows last week’s announcement that Tesla would drop the monthly subscription cost of its Supervised Full Self-Driving software, Tesla’s advanced driver assistance system, to $99 per month, down from $199 per month.

Image: Tesla Full Self-Driving

While the price-cutting of 2023 may have helped Tesla sell a record 1.8 million vehicles, the automaker’s margins have shrunk. In the first quarter of 2024, Tesla’s delivery numbers fell year-over-year. The company also built more cars than it shipped, a trend that has continued in seven of the last eight quarters.

Image: Tesla Delivery Numbers

It’s unclear how removing discounts on Tesla vehicles fits into the automaker’s new strategy to streamline sales and delivery. One thing is certain, however: Tesla is undergoing significant changes, and only time will tell how these changes will impact the company’s future.

Image: Tesla Future