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A Tesla Model 3 car is displayed at the Canadian International AutoShow in Toronto, Ontario, Canada, February 15, 2019. REUTERS/Chris Helgren - RC1925523B00
REUTERS/Chris Helgren
Where is the Tesla Model 3?
THE ART OF THE UPSELL

Consumers are accusing Tesla of sleazy car dealership upsell tactics

Alison Griswold
By Alison Griswold

Reporter

Tesla’s fabled mass-market electric car has yet to materialize.

The company has recently texted customers about delayed deliveries of the $35,000 Model 3 standard range, according to multiple reports on customer forums summarized by auto news site The Drive. Some customers on these online forums say company reps have also attempted to upsell them, saying they could get a vehicle sooner if they upgraded to a “plus” or “long range” Model 3, each of which costs several thousand dollars more. Tesla declined to comment on the reports of delayed deliveries and upsell tactics.

Upselling is a tried and true tradition at car dealerships. Auto dealers, typified by sleazy sales tactics, will let a customer try a fancier model than what they came to buy and then offer them a “deal” on it. Cars can be loaded up with extras that jack up the cost from the sticker price. Do you want different paint? A fancier engine? Heated seats. No problem, that will add only a tiny bit to your monthly payment. The internet is filled with articles that advise auto dealers on the art of the upsell, with tips like “get personal” and “create urgency” (Jordan Belfort would be proud).

Tesla sells vehicles directly to consumers online and through company-owned showrooms. The company has set itself apart from other autodealers with its electric model and superstar CEO (Elon Musk now has a Soundcloud single!), as well as by ensuring that buying a Tesla is a luxury experience. In its 2018 annual report, Tesla described its showrooms as “highly visible, premium outlets in major metropolitan markets.” Earlier in March, Tesla decided to raise vehicle prices in order to keep some of these stores open.

In other words, one of the most important things about Tesla’s brand is that there’s nothing sleazy about it. That’s why the upselling reports from online consumers are so concerning: They suggest Tesla is willing to stoop to the same sales tactics that any other auto dealer would use.

Such tactics may bolster Tesla’s first-quarter sales numbers and bring it closer to its financial goal of being profitable in the second quarter. Tesla is also in the middle of an end-of-quarter delivery push—Musk on March 30 tweeted a photo of a Tesla semi electric truck delivering Tesla cars—so some of the customers who reported delays could still get their Model 3 in the end. The company is expected to announce soon how many cars it built and sold in the latest quarter.

But upselling and “bait and switch” sales tactics also risk angering customers, many of whom have already had their faith tested by multi-year waits for the $35,000 Model 3. And one of the last things Tesla needs right now is more disillusioned buyers cancelling orders and having trouble getting their money back.

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