Tesla reinforces ‘no discounting’ policy

Tesla Motors’ staff have been told to stop offering discounts on the company’s all-electric new vehicles.

Boss Elon Musk told employees in an email to follow company policy of not offering discounts on new cars, responding to some investors’ concerns about the practice.

In a Twitter message, Musk said “corrective action” had been taken on discounting of new vehicles, which “seems to be limited to a small number of cases.

The Tesla boss says: “It is absolutely vital that we adhere to the no negotiation and no discount policy that has been true since we first started taking orders 10 years ago.”

Musk says there could be discounts to floor models, vehicles that had been used for testing or those that were damaged in delivery.

“However, there can never – and I mean never – be a discount on a new car coming out of the factory in pristine condition, where there is no underlying rationale.”

Musk was responding to a research note published on Tuesday by analyst Brad Erickson of Pacific Crest Securities that criticised Tesla for offering discounts on Model S sedan inventory cars, not those built-to-order for specific customers, to boost third-quarter sales.

“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,” Erikson wrote.

Erickson says he “detected aggressive Model S discounting at US sales centres to maximise third-quarter deliveries.”