• Tesla is offering discounts to appease European car rental and leasing firms, Reuters reported.
  • The discounts follow Tesla's price cuts in Europe, which impacted fleet values for leasing firms.
  • Tesla is also addressing complaints that had previously gone ignored, sources told the outlet.

Tesla is taking action to appease leasing and rental-car companies in Europe who say the value of their Tesla fleets has sharply declined, according to a new report from Reuters.

The outlet spoke to nine executives from top firms who said Tesla is now offering them discounts on new cars and is working to address long-standing and long-ignored complaints about the company's service and repairs.

The report comes after Tesla lowered the prices for some of its models in Europe last month, which in turn lowered the value of Tesla fleets owned by companies who lease or rent the electric vehicles.

"Tesla is now actively telling our members: We can give you discounts and compensate you," Richard Knubben, the director general of the leasing and rental car industry group Leaseurope, told Reuters. "But Tesla's residuals have dropped so fast, I'm not sure the discounts they're offering are enough."

Tesla did not immediately respond to a request for comment sent by Business Insider.

The complaints by the European firms come as Tesla faces declining demand for EVs and an increase in competition, particularly in the Chinese market.

Tesla had a disappointing first quarter of 2024, reporting a 20% decline in car sales from the previous quarter and its first year-over-year decline in sales since 2020. Tesla also announced plans last month to cut more than 10% of its workforce and the layoffs have been ongoing since.

Reuters reported Tesla now has a "damage-control campaign" underway to woo European car leasing and rental firms, which accounted for 44% of Tesla sales in the UK and more than a dozen European Union countries in 2023, the outlet reported, citing Dataforce, a market research company.

In addition to the declining value of fleets, Reuters reported sources at the firms also complained that service and repairs on Tesla vehicles take too long and are too expensive compared to other car makers.

Read the original article on Business Insider