Tesla Coronavirus Financial Relief and New Car Incentives

Jack R. Nerad | April 10, 2020

You can count on Tesla Motors' Elon Musk to take an unconventional approach to virtually everything, and so it has been with the company’s reaction to the coronavirus pandemic.

Tesla Coronavirus Financial Relief and New Car Incentives

While other global automakers have quickly assembled new-vehicle incentive programs designed to help them through the crisis, Tesla has gone on with business as usual. Said a Tesla online sales rep to us via chat, "We don't offer promotion or negotiations on prices, simply because we believe that our vehicles are priced based on the true value they can provide for you! Therefore, I can say that our vehicles are truly worth every dollar."

You could certainly hear echoes of Musk's voice in that reply. Similarly, Tesla has not announced any specific program designed to help its current owners and lessees who might suddenly find themselves struggling to make their next payment. Still, for those who currently own a Tesla and for those who are considering buying a Tesla soon, here are the details on Tesla coronavirus financial relief and new car incentives.

Tesla Customer Relief Programs - Find the best deals!

Unlike all other major car manufacturers who market cars in the United States, Tesla Motors does not use the traditional two-tier franchised-dealer system. Instead, in the states in which it is legal, the company sells vehicles to customers directly via its owned-and-operated chain of retail stores, and thus it is directly involved in financing and leasing.

Tesla Motors has not announced a specific program designed to help current owners and lessees who might require financial assistance in the wake of the COVID-19 pandemic and the economic carnage that has followed it. But Tesla does offer online customer support on a variety of topics including purchase, leasing, delivery, ownership and product support.

Current owners can log into their Tesla Account to submit a question. Those who don't have a Tesla Account can use the Contact Us form. Chat support is available 4 am - 8:30 pm PDT for all Tesla owners in North America. Current Tesla customers can visit the brand's support pages to chat about car-related questions.

Owners and lessees of Tesla vehicles who require financial relief and did not finance their vehicle or obtain their lease through Tesla Motors should make direct contact with their lender or leasing company. Many can assist with various forms of payment relief, and discussing the situation with them is valuable in understanding the options available.

 
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Tesla New Car Incentives - Find the best deals!

Tesla Motors' sales were strong through the first quarter of the year even as other carmakers suffered beginning in mid-March. Tesla said it delivered 88,400 vehicles in the January - March 2020 timeframe versus 77,100 vehicles in that same period last year. Perhaps that sales success plus the fact that luxury carmakers are typically low-key about incentives could account for the fact that Tesla has not announced a deferred-payment or low-interest-rate sales promotion in the face of the COVID-19 pandemic.

Tesla Motors' most prominent incentive is what it calls its Best Rate Guarantee for those customers who purchase using an auto loan. Valid for new Model S, Model 3, Model X, and Model Y vehicles delivered in the United States, Tesla will match the loan rate offered by a third-party bank or financial institution to customers who can demonstrate approval for a lower rate than what is offered by Tesla. The offer excludes the Model 3 Standard Range, and it is subject to terms and conditions that involve providing proof that the third-party loan offer is valid. Tesla is currently offering 2.99% (APR) loan rates for a maximum of 72 months for 2020 Model 3, Model S and Model X vehicles.

Despite the coronavirus restrictions in many locales, some Tesla Motors retail operations remain open. In many locations, Tesla has implemented "touchless deliveries" so customers can take delivery of their vehicles in a safe manner. Using the over-the-air connectivity of the vehicles, customers are able to unlock their new cars at a delivery parking lot via the Tesla App, sign any remaining paperwork that has been placed in the car, and return that paperwork to an on-site drop-off location before leaving the retail location.

Tesla Factory Closures - Find the best deals!

Tesla closed its Shanghai plant for 10 days or so in early February after being prompted by Chinese officials to do so in an effort to slow down the spread of coronavirus. More than a month later Alameda County, Calif., officials asked Tesla to close down operations at its Fremont, Calif., factory, which was operating despite a shelter-in-place order in the county. Tesla ceased production there on March 23, and that plant is expected to remain on hiatus until at least May 4. More than 10,000 employees work at the Fremont factory, which in previous decades was home to General Motors' and Toyota's New United Motor Manufacturing.

Tesla will reportedly cut salaried employees' compensation and furlough non-essential workers until May 4, when it expects to resume production at its California factory. Highest-level executives will get a 30% pay cut, directors' pay will be reduced by 20% and others will be cut 10%.

Tesla's Gigafactory 1, a Sparks, Nev., facility that Tesla hopes will someday be "the biggest building in the world," is continuing to operate. It assembles car batteries and other advanced batteries for home and business.

Tesla Economic Outlook & Sales Forecast - Find the best deals!

Tesla had just started delivering its new Model Y SUV to customers when the COVID-19 outbreak forced closure of the Fremont assembly plant. Widely expected to become Tesla’s best-selling vehicle, inability to produce and deliver the Model Y will certainly crimp the company’s sales in Q2.

As for the broader automotive industry, J.D. Power's Tyson Jominy, vice president of data and analytics, noted vehicle sales will be heavily influenced by the production ramp-up and discounting offers following the lifting of health-related business restrictions. Automotive-specific and overall consumer-oriented government stimulus packages will also affect recovery.

"A critical constraint on the recovery remains the duration of production pauses," Jominy wrote. "Domestic and global vehicle production is being significantly disrupted with most U.S. facilities closed for most of April."

He suggested that if production is halted for an extended period (e.g., a two-month halt equating to 2.0 to 2.5 million cars), a commensurate drop in full-year sales is likely because manufacturers will not have the time or capacity to recover the lost production during the year. Tesla Motors offered no official information on its expected sales for the balance of 2020 and did not respond to our requests for other information.

With severe restrictions on consumer movement and sudden high unemployment, the J.D. Power outlook for retail vehicle sales in April is 225,000-380,000, a decline of 65-79% from its pre-virus forecast and far worse than the March 2020 drop. At this time the J.D. Power calendar-year 2020 outlook for total vehicle sales is in the range of 12.2 to 14.9 million units.

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