Tesla is slashing prices of unsold Model Y SUVs in the US by thousands of dollars in an effort to clear an unprecedented inventory build-up.
Many long-range and performance Y models now sell for $5,000 less than their original price, while rear-wheel drive versions see even bigger cuts over $7,000.
The discounts come as Tesla once again made far more vehicles than it sold last quarter. The company built 433,371 vehicles in the first quarter but shipped only 386,810, likely adding more than 40,000 EVs 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 has shipped in seven of the past eight quarters, Bloomberg News famous Friday.
In January, Tesla warned that sales growth could be “significantly lower” in 2024 than in previous years — a trend that has troubled every market player, from major automakers like Ford to upstarts like Lucid .
Tesla went through a typical end-of-quarter push to deliver as many cars as it could in recent weeks, with chief designer Franz von Holzhausen once again pushing them out the door the last days. But Tesla has also tried to boost sales in other ways. It announced a $1,000 price increase on the Model Y, its most popular vehicle, on April 1. Tesla CEO Elon Musk also began forcing demonstrations of the company’s advanced driver assistance system on all potential buyers. This software package costs $12,000 and can be a huge boost to Tesla’s profits on a vehicle.
Musk has more or less admitted that Tesla has had to work harder to increase demand for its vehicles of late. He has largely blamed the struggle on high interest ratesall this while his company dramatically reduced prices on the Model Y and Model 3 throughout 2023.
