Tesla cuts prices for European fleets in damage-control move
Tesla is reportedly working to address concerns raised by European leasing companies following the automaker’s repeated retail price cuts, which have reduced their fleets’ value significantly, Reuters reported on Monday.
The company’s slow service and costly repairs have also been a source of frustration for their corporate customers.
Tesla’s efforts to rectify these issues include offering unofficial discounts on new car purchases if they are in stock and addressing widespread complaints about service, repairs, and ordering processes.
These issues have been a long-standing concern for fleet managers and leasing firms, who claim Tesla has ignored these problems for years.
Tesla’s retail price cuts were initially introduced to boost sales in response to a global decrease in electric vehicle demand and increased competition, particularly from Chinese EV manufacturers such as BYD.
However, these price cuts have negatively impacted Tesla’s largest customers in Europe, where fleet purchases account for nearly half of all auto sales.
Leasing companies, which purchase new cars and arrange leases based on their projected resale value at the end of the lease, have been hit hard by these sudden price drops.
Richard Knubben, director general of Brussels-based Leaseurope, stated that there’s “nothing worse” than continuously reducing the value of a fleet buyer’s assets.
Tesla has reportedly begun to offer discounts and compensation to its members, but Knubben expressed doubts about whether these discounts are sufficient, given the rapid drop in Tesla’s residuals.
An anonymous top executive at a large European car-leasing firm revealed that Tesla has been offering unofficial end-of-quarter discounts of up to 2,000 euros ($2,134) on its Model 3 and Model Y for leasing-company purchases, if those vehicles were in stock, since mid-2023. These discounts have reportedly been available consistently since late last year.
Tesla did not respond to requests for comment on these matters.
