Tesla has stopped giving discounts on its electric vehicle (EV) inventory nationwide amid restructuring efforts. Elon Musk said on X that this decision is part of a larger effort to "streamline the whole Tesla sales and delivery system," in response to a user's comment.
The EV manufacturer recently let off roughly 10% of its staff, or 14,000 workers due to its lackluster financial performance. Tesla's North American employment page had most job ads removed, implying a recruiting freeze. Moreover, Rohan Patel, VP of Public Policy and Business Development, and Drew Baglino, SVP of Powertrain and Energy, both left the company.
Despite a record 1.8 million car sales last year, the company's profitability has gone down as Tesla produced more cars than it shipped in the first quarter of 2024. Tesla's strategic move raises doubts about its sales and delivery methods, especially as it prepares to debut its latest vehicle platform.
We are simplifying and streamlining the whole Tesla sales and delivery system. It has become complex and inefficient.
— Elon Musk (@elonmusk) April 16, 2024
Shocking Action
According to TechCrunch, Tesla's decision to cease discounts on the Model 3, Model Y, Model S, and Model X in the US was a surprising move. The firm hiked rates during 2022. The next year, Tesla began consistently lowering prices for all its vehicles, with some models dropping over 20%, a habit it has continued this year. In April, Tesla discounted numerous long-range and performance Model Ys by $5,000 and rear-wheel drive models by over $7,000.
Tesla has not explained how removing discounts fits into its plan.
Tesla is known for its direct-sales methodology, although it frequently modifies its sales and delivery strategy. In 2018, Tesla acquired trucking businesses to distribute Model 3s, and in 2019, it closed and reopened retail locations. Despite prior attempts to solve sales and delivery issues, Tesla still faces quarterly constraints, showing persistent operational complexity.
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Recently, the company announced that its North American clients would now receive in-person demos of Full Self-Driving (FSD) technology before buying their cars. According to a document supposedly written by CEO Elon Musk, Tesla outlets in the region must install and activate the newest FSD software and give consumers a quick test ride.
To use Tesla's FSD, clients must pay $12,000 more. This unlocks Autopilot, autosteering on city streets, and the ability to automatically slow down at stop signs and traffic lights. Tesla thinks the in-person presentation would persuade hesitant buyers, despite the high price.
Notably, Tesla lowered the monthly subscription fee for its supervised full self-driving software from $199 to $99, per Engadget.
A Tesla Model y car stands in front of the company's plant as Tesla CEO Elon Musk visits the company's electric car plant in Gruenheide near Berlin, eastern Germany, on March 13, 2024
Tesla Focusing on Robotaxi
TechTimes recently reported that Tesla is focusing on its self-driving Robotaxi initiative rather than a cheaper electric vehicle. According to initial sources, Tesla will launch two vehicles on a new "unboxed" manufacturing platform: the "$25,000 Tesla" or "Model 2," as well as the self-driving ride-sharing robotaxi.
According to Electrek, Tesla CEO Elon Musk has delayed the development of the cheaper EV to advance the Robotaxi program, internally known as NV9. Musk may dispute the word "canceled," but insiders say Tesla is prioritizing self-driving technology and has placed the NV9 project on hold.
This strategic decision is a bet on Tesla's self-driving technology, say experts. Without a new growth-oriented EV program, Tesla's future is dependent on Robotaxi technology's development and execution.
Elon Musk's pledge to invest "several billion dollars" in NVIDIA's computing power to train Tesla's self-driving system emphasizes this strategic shift. Tesla plans to finish a large data center at Gigafactory Texas by August, weeks before the Robotaxi debut to teach full self-driving technology.
