Tesla has made significant decisions in the meantime to revolutionize its business activities and make the growth of the company more streamlined towards extensive profit. Recently, Elon Musk has announced the discontinuation of the access to electric vehicle inventory across the United States. Ultimately, it will enhance the sales and delivery system of the company, releasing the complex and tense situation from the enterprise.
Background
TechCrunch has detailed some of the critical reasons for Tesla’s current decisions. In the past few years, the EV manufacturer giant has been the best in the industry to revolutionize the transportation industry with its sleek design and incredible technology. Also, the sustainability practices have lifted up the popularity of the company. Despite these exceptional advantages, Tesla has been facing enormous challenges related to its sales and distribution.
Previously, Tesla has implemented multiple pricing strategies that have played a massive role in attracting customers and boosting sales. One such strategy involves lowering the prices of inventory vehicles. Cars that are produced already and available for purchase cost far less than the ones present in the market.
In 2023, the EV giant followed a successful strategy of price cuts which resulted in the record number of sales of 1.8 million vehicles. In addition, the company focused on adding more and more cars to the inventory as compared to the number of cars that are shipped to the market.
The Complexity Conundrum
Elon Musk is never afraid of making big statements and the current decision to end discounts on inventory purchases is solid proof. Several reasons are associated with this bold announcement. One of them is that the company’s sales system has become very inefficient and is not functioning properly.
Musk moved to X, formerly Twitter, and tweeted that Tesla is suffering from some complex situations that have ultimately created a huge gap in the company’s operational capabilities, causing inefficient outcomes.
Tesla has ended the discount on some of its most popular models present in its inventory including the likes of the Model S, Model Y, Model X, and Model 3. In 2022, the EV giant has raised the prices of its vehicles while it has brought them down in 2023. Even some models have faced price reductions of up to 20%. The company also get into the news for lowering the prices of its long-range Model Ys by $5,000. On the other hand, the rear-wheel-drive version has experienced a price cut of more than $7,000.
Future Prospects
Tesla has recently announced the layoff of its highly skilled labor. Moreover, the decision to abandon the discount on the inventory of vehicles can raise more challenges for the company. However, the EV giant is hopeful to maintain a perfect balance between sustainable practices and profitability. In this way, it can pave its path to the ultimate success in 2024.
