No More Inventory Discounts On Tesla Cars As CEO Elon Musk Says Sales System Has Turned 'Complex And Inefficient'

Tesla, Inc. TSLA CEO Elon Musk explained the rationale behind the removal of inventory discounts on its cars in the U.S., citing the need to simplify the company’s complex sales system.

What Happened: “It has become complex and inefficient,” he said, adding that the removal of inventory discounts aims to streamline and simplify operations.

On Tuesday, Tesla eliminated inventory discounts across its vehicle lineup, excluding demo cars or used vehicles. Until recently, the company offered significant discounts on inventory vehicles to drive sales.

Now, an unused inventory Model Y rear-wheel drive starts at $44,990, aligning with the starting price of a custom order.

The removal of discounts follows Tesla’s recent decision to lay off approximately 14,000 employees, constituting 10% of its global workforce, as part of cost-cutting measures and role consolidation. Additionally, senior executives Drew Baglino and Rohan Patel announced their departure from the company on Monday.

Musk justified the sweeping job cuts, stating, “About every 5 years, we need to reorganize and streamline the company for the next phase of growth.”

Interestingly, Tesla has refrained from price cuts in the U.S. since the beginning of 2024, except for a temporary price reduction announced on select versions of the Model Y in February. Musk had explained that the temporary price cut aimed to incentivize new car sales and mitigate the seasonal decline in demand over mid-winter.

Earlier this month, Tesla increased prices on all versions of the Model Y by up to $1000, departing from the trend of significant price cuts initiated by the company since the beginning of 2023.

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