As you can see there are some problems at the Tesla company again, this time, it’s not about the car it’s about the employees. Apparently, Mr. Musk is concerned that the Tesla Motors Inc. and its employees are drifting away from the long-term policy against giving discounts on its cars.
The chief executive officer of Tesla Motors Inc. has published his e-mail sent to Tesla employees on Twitter where he asks them to adhere to the sales approach called “fundamental to our integrity.” This was done to respond to a thread on Reddit where one user questioned the discount he was offered. Musk has been “forcing” to increase production and delivery, where he in an e-mail (obtained by Bloomberg) told his employees that it is essential to achieve a positive third quarter and that this “requires building and delivering every car we possibly can”. They have also taken aggressive means to keep up the sales of the Model S and Model X until they start producing the smaller Model 3 which is coming later next year.
Tesla Motors Inc. tried to make a more aggressive move to increase sales offering with a two-year lease on cars ordered before September 12. Since the third quarter is closing around September 30th, Brad Erickson, an analyst at Pacific Crest Securities made a research note that heavily questioned demand. In that note he stated “We detected aggressive Model S discounting at U.S. sales centers intended to maximize Q3 deliveries,” and on top of that he added “We found Tesla has been employing a deeper discounting formula to drive sales of inventory models, with all offers expiring this Friday, the last day of the quarter.” As I mentioned above, one of the Reddit users and potential Tesla car buyer said that he was offered a discount as well, which triggered a response from Mr. Musk stating he will check the claims, and posted a little later that the corrective measures were taken.
Musk sent an e-mail to all of his employees that it is OK to give discount on floor models or vehicles that were used for test drives or even damaged before delivery but in no circumstances there can not “be a discount on a new car coming out of the factory in pristine condition, when there is no underlying rationale.” Erickson, who rates the shares of Tesla equivalent of neutral, predicts Q3 deliveries around 22.000.
If you may not know in the first half of the year, Tesla delivered 29.202 vehicles, and they said that the second half would be finished at 50.000 vehicles. Elon Musk in his e-mail congratulated his employees on a great quarter stating “likely to be the best ever in Tesla history”.