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Tesla (TSLA) turns to deep discounts as inventory piles up

Tesla (TSLA) is turning to deep discounts on new vehicles early in a new quarter as inventory is piling up.

Earlier this week, Tesla reported its Q1 delivery and production results, and it delivered far fewer vehicles than anyone expected.

The automaker added over 46,000 vehicles to its global inventory.

Generally, the automaker introduces incentives and discounts toward the end of a quarter in order to optimize deliveries and reduce its inventory levels.

We had a good idea that the last quarter would be rough, as Tesla introduced incentives and discounts much earlier in the quarter.

History is repeating itself in Q2.

The quarter just started and a quick look at Tesla’s inventory shows some deep discounts already:

Tesla has thousands of new vehicles discounted by several thousand dollars before any state or federal incentives.

Some of them are demo vehicles, but they are very low mileage demo vehicles sold as new.

Furthermore, there are some brand new vehicles that get very surprisingly high discounts, like this Model Y rear-wheel-drive getting a $7,520 price adjustment:

Tesla says that this is before the $7,500 federal tax credit, which can be applied at the purchase if the buyer is eligible.

Most of the discounts on the Model Y appear to be closer to the $3,000-$4,000 range, but even that is huge for Tesla early in a quarter.

Those “new inventory vehicle” discounts come after Tesla increased the price of all Model Y trims by $1,000 for new orders.

Electrek’s Take

This could turn into a very interesting quarter.

46,000 vehicles added to inventory is a lot. Sure, some of them are in transit to customers, but we don’t know how many. Given that we have these discounts so early in the quarter, I would expect not that many.

I wouldn’t be surprised if Tesla comes up with more incentives soon – like the FSD and free Supercharging transfer again.

It’s wild that you can basically get a Model Y for $30,000 if you are eligible for the tax credit. Wild.