Elon Musk sticks to Tesla’s ‘no discount’ policy

Elon Musk has returned to the mundane work of running an automobile company.

After spending a day imagining Mars colonization, the Tesla CEO on Wednesday sought to squelch any improper sales pitches by Tesla employees.

Musk sent a memo to all employees reminding them to adhere to the “no negotiation and no discount policy” the company has followed since its inception.

The memo came in response to a Reddit user concerned that his Tesla adviser (the company doesn’t call them salespersons) was pressuring him to finalize a sale on Friday, before he took possession of his new car. Tesla could have booked the sale at the end of the vital third quarter.

The Palo Alto electric vehicle maker plans to raise more money from investors this year, and needs to impress with strong sales and deliveries.

The company is expected to release third-quarter numbers next week. It has lagged behind its initial goal of shipping between 80,000 and 90,000 vehicles this year. Tesla delivered about 29,200 Model S sedans and Model X SUVs in the first half of the year.

Musk in the memo congratulated his employees on a strong third quarter, but also warned them to adhere to company principles. Discounts for floor and test models are acceptable, he said, but not for new cars coming directly from the factory. “This is why I always pay full price when I buy a car and the same applies to my family, friends and celebrities, no matter how famous or influential,” he wrote.

Musk added that he asked Tesla accountants to count a car delivered in the quarter only if it is actually delivered.

The Reddit user “watupmane” said he initially believed the price on his car would increase if he didn’t finalize his order. He was “a little concerned about finalizing sale of a car I have never actually seen.” He added that his adviser “did reassure me that when my car gets here if I see any issues with it they will resolve them. Still a big purchase to treat in this way.”

His concerns reached Musk. “Corrective action taken,” Musk tweeted. “Seems to be limited to a small number of cases, but thanks for letting me know.”

The Reddit user updated his post, thanking Musk and saying the whole process was smooth and without the high pressure of traditional car dealerships.

Photo: The inside of a Tesla vehicle in a new showroom and service center in Red Hook, Brooklyn on July 5, 2016 in New York City. (Spencer Platt/Getty Images)

 

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  • Nero1k

    Why can’t people keep internal memos INTERNAL?

    • MzUnGu

      Not much u can do, if it’s your boss that wants to “leak” it…

  • madmaxCA

    You can definitely negotiate on these cars with some of the sales advisors. A friend of mine bought a Tesla and was trading in a car for that. He was offered 60K for the car by Tesla (which has a system like other car dealers of getting auction prices for the car in question and basing trade in value on that), but he felt it would be fairly easy to sell the car for $70K, indicating to the advisor that he would take 65K for the car given the tax break he would get for trading in versus selling privately, the advisor toed the line at 60K, my friend canceled his order, the advisor called back and indicated that if my friend would trade the car in basically on the spot and contribute that money to the Tesla (so Tesla would take possession of the car basically immediately and hold the cash for the 4 weeks it was going to take to get the new Tesla), then he would do $65K on the car. That was definitely a $5K discount and well demonstrated that if you get a real sales person who knows how the sales game is played (despite what Musk says from his billion dollar fortune), you can negotiate on car price with Tesla.

    • Donde Fact

      Doesn’t sound like a discount to me. A discount is when the seller
      takes less than MSRP. Buyer said car was worth $70K but took $65K. Sounds more like the buyer got beat down $5K.

    • Bryan

      Musk says no more discounts.

  • Bryan

    So does that mean that they won’t be discounting their proposed solar roofs either? Too bad because with conventional solar system pricig dropping below $2.50 a Watt before incentives, the solar market has become unbelievably competitive.

 
 
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