Tesla Drastically Reduces Model Y Inventory Prices, Slashing by Up to $7,000

Tesla is reducing prices on unsold Model Y SUVs in the U.S. by several thousand dollars as part of an effort to clear out a significant backlog of inventory. The discounts apply to various Model Y configurations, with long-range and performance versions seeing price cuts of up to $5,000 and rear-wheel drive variants experiencing even larger reductions exceeding $7,000.

This move comes as Tesla continues to produce more vehicles than it sells, resulting in an accumulation of inventory. In the first quarter of the year, Tesla built 433,371 vehicles but shipped only 386,810, potentially adding over 40,000 electric vehicles to its surplus stock. While some of these vehicles may have been in transit, Tesla has consistently built more cars than it has shipped in recent quarters.

In January, Tesla warned of a potential slowdown in sales growth for 2024 compared to previous years, reflecting broader challenges in the automotive market. To address this, Tesla engaged in end-of-quarter efforts to boost deliveries and also implemented strategies to stimulate sales, such as announcing a price hike for the Model Y and mandating demonstrations of its advanced driver assistance system for potential buyers.

Elon Musk, Tesla’s CEO, has acknowledged the company’s need to intensify its efforts to stimulate demand for its vehicles, attributing part of the challenge to high interest rates. Despite these challenges, Tesla has been proactive in adjusting prices, notably reducing prices on the Model Y and Model 3 throughout 2023.