In recent times, Tesla has been massively increasing vehicle production and in order to keep demand in line with the added capacity, the EV maker has been cutting vehicle prices and offering incentives to entice new buyers. And today, Tesla has added a new incentive for Model S & X buyers in the form of 10,000 free supercharging miles.
Follow us today...
Currently, Tesla is in the process of massively expanding the company’s vehicle production capacity. The EV maker is increasing production capacity by upgrading 2 of its operational plants in Fremont California and Shanghai China.
In addition, Tesla is also in the process of ramping up vehicle production at two of its new plants in Austin, Texas, and Grundeide, Germany. Tesla’s Germany plant just yesterday reached a production capacity of 5,000 vehicles a week or an annualized production rate of 250,000 vehicles less than a year since the start of production.
Giga Texas according to the last publicly available information is producing 3000 vehicles a week or in other words, has reached an annualized vehicle production of 150,000 vehicles a year. Although slightly behind Giga Berlin, Tesla’s Texas plant is also at the bleeding edge of implementing the company’s newest manufacturing technologies.
Related News: Tesla Expands FSD Beta V11.3 Release To Wide Public Following Bug Fixes
And to add to this new production capacity, Tesla is also building two brand-new factories. The first one will be located adjacent to Giga Nevada and will have a production capacity of 150GWh of the company’s latest generation of 4680 cells and 50,000 Tesla Semis a year.
And the second brand new factory Tesla is building will be located in Nuevo Leon, Mexico. Currently, we don’t have a lot of detail regarding the new plant however, according to the company’s Investor Day presentation, the plant is expected to produce Tesla’s Gen-3 vehicle and will be by far Tesla’s largest factory to date with land area almost double as large as Giga Texas, which in its own right is currently the largest production facility in the world.
Tesla, to keep demand for its vehicles in line with all the added and upcoming production capacity increases, has recently cut the prices of all its vehicles. Some of the price cuts, such as on the Model Y have drummed up demand to the point, in the entire US there were only 7 Model Y’s left in inventory.
However, the price cuts seem to have been less successful with Tesla’s more premium vehicles as Model S & X inventory barely decreased. And in an attempt to drum up demand for these vehicles, last month, Tesla started offering $5,000 for anyone purchasing a new Model S or X and who trades in a vehicle with unlimited free supercharging access.
The move seems to be targeting first-generation Model S & X owners who haven’t upgraded their vehicles in years in order to not lose their unlimited free supercharging access. The $5,000 incentive amounts to 40,000 miles of driving when multiplied by the average supercharging cost in the US.
Although the incentive was generous, it seems to haven’t increased demand enough as Tesla is offering yet another incentive for Model S & X buyers. According to Drive Tesla Canada “starting today any customer who takes delivery of a new Model S or Model X before the end of March 31 will receive 10,000 free Supercharging kilometers in Canada and 10,000 free Supercharging miles in the US. The free credits are good for two years from the date of delivery, and as with similar offers in the past, the credits are not transferrable to a new owner.”
The multiple incentives and the price decreases suggest that Tesla is having difficulty generating demand for the Model S & X. A few years back this might have been a huge issue, however, Tesla is in a much stronger position as a company and this year the Model S & X are expected to only make up 5% of the company’s total vehicle sales.
Musk has even suggested that Tesla no longer needs the Model S & X and is purely producing the vehicles from mostly a nostalgic place. This indicates even though Tesla is facing demand problems for its premium vehicles that it should not have any meaningful effect on the overall health of the organization.
Given the fact that 10,000 miles of free supercharging only amounts to $1,2500 in incentives, it is hard to imagine that it will drum up significant demand however, we will be sure to keep you posted on interest in Tesla’s vehicles.
Until then make sure to visit our site torquenews.com/Tesla regularly for the latest updates.
So what do you think? Is 10,000 miles enough to drum up demand for the Model S & X? Also, what do you think this offer says about the demand for Tesla’s more premium vehicles? Let me know your thoughts in the comments below.
Image: Courtesy of Tesla, Inc.
For more information check out: Tesla Bull Cathie Wood Sells 139,000 TSLA Shares Despite Her $1500 Price Target
Tinsae Aregay has been following Tesla and The evolution of the EV space on a daily basis for several years. He covers everything about Tesla from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.
Follow us today...