Tesla slashes Model Y inventory prices by as much as $7,000

Tesla is lowering prices of unsold Model Y SUVs in the United States by several thousand dollars in an effort to clear an unprecedented inventory backlog.

Many long-range, performance Model Ys are now selling for $5,000 less than their original price, while rear-wheel-drive versions are seeing even deeper reductions of more than $7,000.

The cuts come as Tesla once again made far more vehicles than it sold in the most recent quarter. The company built 433,371 vehicles in the first quarter, but only shipped 386,810, likely adding more than 40,000 electric vehicles to its excess inventory. (Some of those vehicles were likely in transit, though Tesla didn’t say how many.) The company has built more cars than it shipped in seven of the last eight quarters, Bloomberg noted Friday News.

In January, Tesla warned that sales growth could be “significantly weaker” in 2024 compared to previous years – a trend that has unsettled everyone in the market, from big automakers like Ford to struggling newcomers like Lucid .

Tesla has had a typical end-of-quarter period to deliver as many cars as possible over the past few weeks, with chief designer Franz von Holzhausen once again stepping in to get them out the door. in the last days. But Tesla has also tried to increase sales in other ways. It announced on April 1 a $1,000 price increase for the Model Y, its most popular vehicle. Tesla CEO Elon Musk has also begun requiring demonstrations of the company’s advanced driver assistance system from all potential buyers. This software package costs $12,000 and can significantly increase the profit Tesla makes on a vehicle.

Musk more or less admitted that Tesla has had to work harder lately to drive demand for its vehicles. He largely blamed high interest rates for the struggle, while his company slashed Model Y and Model 3 prices throughout 2023.