Tesla offers discounts in Canada/Mexico, raising demand concerns
Tesla is now offering a $5,000 CAD/$74,750 MXN credit on Model 3 and Model Y vehicles purchased in Canada and Mexico before the end of this year. It’s a rare instance of Tesla offering discounts, and could be a sign of softening demand in North America.
The move comes just after Tesla increased the year-end discount to $7,500 in the neighboring US.
Tesla refers to the discount as a “credit” on their site, though the accompanying “Learn More” link merely describes the specifics of the recently announced supercharger credit, available since December 15, and omits any specifics about the credit:
Tesla is offering free Supercharging credits* — up to 10,000 kilometers of driving—for customers who take delivery of a new Tesla vehicle between December 15 and December 31, 2022. Free Supercharging will be credited to your Tesla Account in the month of January 2023 and will remain valid for a period of two years from your delivery date.
But inventory car prices do not show this credit as being applied already, as seen in the screenshot below:
The middle car, at $59,990 CAD, shows the same price as a custom-order configured car with the same base model specs. So inventory cars can expect an additional $5,000 CAD discount beyond the listed pricing on the website, but we don’t know exactly how that “credit” will be applied. You’ll have to ask your Tesla salesperson for the specifics.
The Canadian and Mexican discounts are almost identical to Wednesday’s additional US discount. Both convert to roughly $3,750 USD, which is the amount Tesla raised the US discount by.
In the US, this discount was largely thought of as a response to changing EV tax incentives. It had previously been expected that Teslas would qualify for $3,750 in EV tax credits next year due to the Inflation Reduction Act, but the Treasury announced Monday that they are delaying new rules, which means Teslas will now qualify for $7,500 in tax credits at least until some time in March. As a result, buyers might delay purchase for a few weeks to get new tax credits, so if Tesla wants to sell cars now, it makes sense to offer a temporary discount.
But Canada and Mexico do not have a similar tax credit change coming at the start of the year, so the discount in those territories must not be associated with that. Which means this could be a signal that Tesla sees a less-crowded order book than usual in this holiday season, and needs to spur interest by dangling a rare carrot in front of buyers.
Tesla often has end-of-quarter and end-of-year pushes for deliveries, shifting employee focus to delivering cars for the last few weeks of a quarter in order to finish out strong with high numbers. The company has stated for years that they would like to stop doing end-of-quarter delivery pushes, but that effort never really materialized and the company continues the practice basically every quarter.
These pushes usually materialize in the form of an all-hands motivational e-mail (with gratuitous use of the word “hardcore”) from CEO Musk, but he’s a little distracted from Tesla at the moment. Tesla also occasionally offers perks like free supercharging to get customers in the door at the end of the year. But now, we’re seeing a rare instance of Tesla offering discounts on their vehicles to motivate buyers to come in.
Tesla vehicles have received several price increases over the last year, likely due to increased supply chain costs and generally soaring EV demand overall. With EV supply being lower than demand, prices of many EVs have gone up.
But the auto market is finally starting to stabilize in the last few months, with new and used car prices starting to flatten out from their previous upward trend.
So this new discount doesn’t make up for this year’s price increases, but at least it’s a reversal of the recent trajectory of Tesla prices. That said, it is only temporary – or maybe it’s a sign that Tesla’s price increases have gotten a little overzealous and the company may need to correct in the opposite direction as a result of softening demand in North America.
Electrek’s Take
As Fred mentioned in his Take for Tesla’s original $3,750 US discount, Tesla has never really had trouble with demand, and has never needed to offer discounts as a result. He mentioned that his sign for waning Tesla demand would be when Tesla starts offering discounts.
The US discounts seem like a response to tax credit changes, and could be explained away thusly.
But this discount can’t be explained away as a response to changing government incentives. It doesn’t apply to Europe or Asia, only to North American cars, which incidentally are all produced in the same North American factories. It seems likely that Tesla may have too much NA inventory and wants to get some of it off their hands, and turned into cash, before it shows up on balance sheets at the end of the fiscal year.
Or maybe Tesla wanted to align pricing across territories – but if so, then why no discount in Europe, and why only $3,750 USD (equivalent) and not $7,500?
The move also comes amid falling popularity for the brand due to CEO Elon Musk’s recent shenanigans.
This could be a sign that Tesla demand, which has consistently risen at incredible rates for so many years, might at least be rising less quickly than it previously has.
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With the launch of the first-ever Class 8 vocational EV in the North American market, PACCAR Kenworth is raising the battery-electric bar and underscoring just how far the market has come since the Tesla Semi made its debut nearly a decade ago.
When Tesla pulled the wraps off its all electric Semi truck all the way back in November of 2017, the rest of the industry was hardly thinking about BEVs. Nearly a decade later, the world is still waiting for the Semi to begin regular production, and PACCAR is launching its second generation of HDEVs with the debut of this, the all-new Kenworth T880E vocational truck.
“The Kenworth T880E marks a groundbreaking milestone in Kenworth’s history as we bring to market the first Class 8 battery-electric solution built for vocational applications,” explains Kevin Haygood, Kenworth assistant general manager for sales and marketing. “The T880E is engineered to meet the evolving needs of operators and vocational fleets while still providing the durability, reliability and customization our customers expect.”
The new electric K-whopper is motivated by PACCAR’s in-house ePowertrain platform, capable of putting up to 605 hp and 1,850 lb-ft of peak torque to work, while delivering the same levels of drivability and dependability fleets expect from a Kenworth – but power and torque are only part of the T880E’s work-ready résumé.
Open to work
In addition to a stout, Class 8 electric chassis fitted with heavy-duty Kenworth brakes and axles, the T880E’s central drive eMotor allows for significant wheelbase flexibility so fleet buyers can spec out exactly the machine they need to get the job done. The T880E was also designed to enable lift axle installations from trusted Kenworth upfitters for a vocational-friendly BEV integration.
Additionally, the T880E features a wide selection of factory-installed options that include both high- and low-voltage ePTO (electric Power Take Off) ports, mechanical ePTOs, and the same wide array of body configurations as the ICE version.
Speaking of the ICE version, the electric T880E also can also be had in the same set-back front axle and set-forward front axle configurations with the same multi-piece hood construction. Inside the cab, the latest in driver-focused technology includes the Kenworth SmartWheel and a new 15″ DriverConnect digital touchscreen. Dash and vocational features like RAM Mounts and factory-installed PTO switches are available. The T880E is also offered with Kenworth ADAS packages for customers interested in DigitalVision Mirrors, Bendix Fusion, and Lane Keeping Assist.
It’s so big, you guys
The T880E was on static display at last week’s ACT Expo in Anaheim, California. Check with your local Kenworth dealer for availability.
SOURCE | IMAGES: Kenworth.
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The tire-blistering SU7 Ultra has been the Xiaomi brand’s flagship super sedan since its launch, but a controversial software setting has limited the car to “just” 900 hp in regular driving – resulting in an outcry from owners who ponied up for the big boy numbers. With its latest software update, that missing 648 hp is back on tap!
The SU7 Ultra made waves throughout the performance car world when a bright yellow striped example lined up alongside a white quarter mile king, the 1,000+ hp Tesla Model S Plaid, and promptly smoked it.
That wasn’t all. A preproduction SU7 Ultra prototype lapped the legendary Nürburgring circuit in just 6 minutes and 46.874 seconds, firmly stamping the 1,500+ hp Xiaomi’s alphanumeric into the track’s record books with a time nearly fifteen seconds quicker than a Rimac Nevera or, on the ICE front, either a Corvette ZR1, Viper ACR, or Porsche 918 (take your pick).
It’s hardly any wonder, then, that the customers who signed up – in droves, too – were disappointed to learn that the SU7 they were allowed to buy had been neutered by the safety nannies to the tune of nearly 650 hp. (!)
We’re so back
The outrage from SU7 Ultra owners was immediate. And, facing mounting pressure online and on social media, Xiaomi ultimately decided to withdraw the performance-limiting features while acknowledging the need for more transparent communication about future software updates they messed up, saying in a statement, “we appreciate the passionate feedback from our community and will ensure better transparency moving forward.”
So, rich people can rocket themselves down the road in 9 second hypercars again and all is right with the world. A happy ending – but one that sort of illuminates a fresh set challenges for automakers peddling “software-defined vehicles” to a market that still thinks of their cars as very much hardware defined products.
That’s evidenced by the resistance to pay for features by subscription and complaints by more informed customers that “software locked” range and convenience features just subsidize the cost of more expensive trim levels and pad profits for manufacturers and suppliers.
The new reality is playing out in real time now, and the Jeff Bezos-backed $20,000 electric compact pickup from Slate Auto is going the other way entirely – time will tell whether more, or less tech is the answer.
SOURCE | IMAGES: Xiaomi, via CarNewsChina.
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Tesla (TSLA) has started offering reduced interest rates on the new Model Y in the US — this equates to a direct discount on the brand new vehicle that was supposed to spark Tesla’s demand back.
The automaker has announced “1.99% APR or $0 Due at Signing available for well-qualified buyers” on the new Model Y in the US for the first time:
This amounts to a direct discount worth a few thousand dollars. It is the first widely available discount on the new Model Y coming just weeks after the cheaper non-Launch Edition launched in the US.
It follows a $2,000 direct discount that Tesla offered to early Model Y owners last week.
These discounts and subsidized financing point to soft demand for the updated best-selling vehicle in the US. Tesla just delivered a disastrous first quarter, which it mostly blamed on the Model Y changeover, resulting in lower inventory.
However, industry watchers, including Electrek, noted many signs that the Model Y changeover was not the only issue. Tesla added significantly to its inventory in the first quarter, and the wait times for the new Model Y were extremely short.
Now, the discount weeks after launching the new Model Y confirm the soft demand in the US.
It’s not as bad as Europe and China, where Tesla has already been offering 0% financing on the new Model Y for weeks.
Electrek’s Take
I think it’s clear by now: the new Model Y is not coming to save Tesla.
Let’s be honest: It will still be a significant vehicle program by volume. It just won’t help Tesla return to growth this year.
The RWD Model Y is still coming and has a chance to help in the US. It is already available in China, and it’s not helping Tesla much there, but that’s in a hyper-competitive market, especially at lower prices where the RWD Model Y operates.
Tesla’s performance in Q2 in China will be interesting since it is basically back to its regular lineup for the whole quarter.
The US appears to have been Tesla’s least affected market, but Q3 will be the real test with the full lineup and no backlog of demand for new Model Y.
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