Tesla’s Model Y Inventory Prices Slashed by up to $7K

Tesla announced today that it will be reducing the prices of its unsold Model Y SUVs in the United States by thousands of dollars as it works to clear out a backlog of inventory like never before.

Many of the long-range and performance versions of the Model Y are now available for $5,000 less than their original prices, while rear-wheel drive options are experiencing even larger price cuts of over $7,000.

These markdowns come on the heels of yet another quarter where Tesla produced significantly more vehicles than it actually sold. In the first quarter alone, the company built 433,371 vehicles but only shipped 386,810. It’s estimated that Tesla now has an excess of more than 40,000 electric vehicles in its inventory. This trend has been going on for quite some time, with Bloomberg News reporting that Tesla has built more vehicles than it has shipped in seven of the last eight quarters.

“This trend has bothered every player in the market from big automakers like Ford to struggling upstarts like Lucid,” said a representative from Bloomberg News.

In January, Tesla warned investors that sales growth may be “notably lower” in 2024 compared to previous years. This uncertainty has caused concern for both established players in the industry and newcomers alike.

The Silicon Valley-based company engaged in its typical end-of-quarter push to deliver as many cars as possible over the last few weeks. Lead designer Franz von Holzhausen stepped in once again, working tirelessly to get the vehicles out the door before the deadline. However, Tesla also implemented other strategies to boost sales. On April 1, the company announced a $1,000 price increase for its most popular vehicle, the Model Y. Additionally, CEO Elon Musk began requiring all potential buyers to demo the company’s advanced driver assistance system, an add-on that costs $12,000 and significantly impacts the profit Tesla earns on each vehicle.

Musk has acknowledged that Tesla has had to work harder to stimulate demand for its vehicles recently. He has pointed to high interest rates as the main obstacle, while simultaneously lowering the prices of the Model Y and Model 3 throughout 2023.

It’s clear that Tesla is taking bold measures to address its inventory backlog. Only time will tell if these efforts will prove to be successful in the long run.