Tesla’s sales strategy has undergone significant changes as the company grapples with declining delivery numbers and increased competition in the electric vehicle (EV) market. According to current and former employees, Tesla’s sales team has struggled to adapt to the changing landscape.
In the past, Tesla focused on producing enough cars to meet demand, but now the company is struggling to find customers to buy them. In July, Tesla’s delivery numbers dropped for the second straight quarter, falling below 50% of the U.S. EV market share for the first time ever. This decline can be attributed to weak consumer interest in electric cars, increased competition from other automakers, and the company’s outdated vehicle models compared to newer, more affordable options from competitors.
Tesla’s unique sales model, which relies heavily on online sales and educational showrooms rather than traditional dealerships, helped the company make its mark. However, this strategy has faltered in recent years as waiting lists dried up and production outpaced delivery. The product was no longer selling itself.
To combat this, Tesla has made several changes to its sales tactics. The company began hiring sales staff with more traditional automotive experience, recognizing the need for workers with a “hunter mindset” to drive sales. Tesla also experimented with offering commissions to salespeople, a departure from its previous practice of relying on annual reviews for salary increases. However, these initiatives have had mixed results, with some workers reporting that they were never paid their commissions.
Tesla has also used fear as a motivation tactic, frequently changing daily sales goals and imposing performance-improvement plans on employees who miss targets. This approach, coupled with the lack of new products and updates to Tesla’s lineup, has demotivated staff and made it difficult to meet sales targets.
Some employees believe that in order to succeed, Tesla needs to adopt more aggressive sales and advertising techniques, as well as address the issue of its aging lineup. While Tesla has released new models in the past, such as the Model Y in 2020 and the Cybertruck in 2023, these releases have been few and far between. Industry experts argue that Tesla needs to prioritize product updates and facelifts to attract a larger market.
However, Tesla CEO Elon Musk appears to have different plans for the company. He has positioned Tesla as a tech, AI, and robotics company, downplaying the declining sales and overproduction issues. Musk has been vague about when a new, more economically priced Tesla model will hit the market, leaving salespeople and managers waiting for something new to sell.
In conclusion, Tesla’s sales strategy has undergone significant changes as the company grapples with declining delivery numbers and increased competition. While Tesla’s unique sales model initially helped the company stand out in the market, it is now struggling to adapt to changing consumer preferences and market conditions. To succeed, Tesla may need to adopt more aggressive sales tactics, update its product lineup, and provide clearer direction for its sales team.