Unusual Tesla Discounting on New Vehicles a Sign of Growing Desperation

Check out Tesla’s inventory page. Two days into the new quarter, we spotted some doozies. A new Model Y RWD discounted from $48,990 to $41,150. That’s an incredible $7,840 price cut. A top trim Model Y Performance Dual Motor AWD in red is discounted by 10% or $5,550. Many other configurations, including ones that also qualify for the Federal tax incentive, are discounted. 

We’ve been reporting on Tesla discounts for years and always highlight Elon Musk’s prior statements about how “new vehicles should never be discounted. Even he pays full price,” and all that jazz. So what makes these discounts so unusual?

1) Tesla Now Discounting At the START of Business Quarters
When Tesla’s discounts and promotions first began they were part of a coordinated effort to push out the most vehicles possible just before quarter-end and year-end to boost the sales results. Many companies across all business sectors do the same thing. However, it’s April second, and a new quarter has only just started. Yet widespread massive discounts are posted.

2) Tesla’s Discounts Are HUGE
We understand a little bonus of some free Supercharger visits or a couple grand off the lofty price of a Tesla, but let’s face the truth; These discounts are not small incentives meant to nudge a buyer planning to buy soon anyway. 

3) These Discounts Are On Top Of Already Reduced Prices

Tesla has already slashed its prices from the inflated price points Tesla had when the company was taking advantage of COVID-related shortages. These new discounts are approaching 20% and are on top of the already slashed prices.

4) It’s Not Just One Model or Trim
Every brand has an occasional slow-moving model or trim. However, Tesla is discounting it top-seller, and as far as we can see, it is discounting all of its configurations. Even the popular color options are being discounted. 

The EV Market Has Stopped Growing
Tesla’s Q1 results just dropped, and Electrek, the EV advocacy publication, calls them “disastrous.” The summary of the story is that Tesla has a demand problem. Kelley Blue Book by Cox Automotive and Edmunds have both offered up empirical data showing that EV growth leveled off and began to dip over the past nine months. It is hard to see how to put a positive spin on what is happening with EVs at this moment in time. 

Tesla Discounts - Our Expert Opinion
All automakers seem to be discounting their EVs right now. We’ve been highlighting the great deals every month. Some level of discounting is healthy, and shoppers enjoy the feeling of having gotten a good deal. However, how will investors feel when they see Teslas being sold with balloons on the wipers and grease paint highlighting cash on the dash? Tesla needs to be very careful with its discounting or the company may start to look like a legacy automaker. 

Top of page image by John Goreham. Chart courtesy of Kelley Blue Book by Cox Automotive.

John Goreham is an experienced New England Motor Press Association member and expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. In addition to his eleven years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can follow John on Twitter, and connect with him at Linkedin.