Tesla Dramatically Drops Model Y Price

Tesla Dramatically Drops Model Y Price

Freedom Financial Archive | Originally posted April 27, 2023
  • Why has the Model Y price dropped by a staggering $20,000 since the middle of last year?
  • Is Elon trying to start a price war?
  • Why California residents can no longer charge their cars at night

Dear Reader,

The starting price for Tesla’s Model Y SUV has dropped below the price of the average US vehicle. According to a recent article by Tom Randall in Bloomberg, “At $46,990, the base Model Y now costs $759 less than the average amount paid for a car or truck in the U.S. The differential between these figures has changed by more than $20,000 since the middle of last year.

No carmaker has made such a dramatic price reduction to a high volume vehicle in the modern age of the automobile. The Model Y was the best-selling EV in the US last year, and one of the top SUVs of any type.” You can read the entire Bloomberg article here if you’re interested.

The logical question that comes from all of this is, why? Why has the price dropped so dramatically in less than one year? It doesn’t make sense on the surface, especially since the Model Y was the best-selling EV in the US last year. It turns out, the real reason might surprise you.

The Real Reason Tesla Is Aggressively Cutting Prices

Here’s what Mark Rossano, Editor of The NEO Report, had to say:

“Tesla is sitting on so much inventory. I was in Houston a few months ago, and when I was dropping off my rental car, I counted 345 Teslas in the lot. And I’m a little nosy, so I start talking to the guy at the rental car counter. I asked if they were buying all these Teslas, and he said he didn’t know, they just showed up two weeks ago and they’ve been sitting there ever since.

Freedom Financial News | Originally posted April 27, 2023

If you look at their supply chain, they’re sitting on a ton of inventory. And you’re just not seeing it move. There’s a big issue with how they’re going to put all this inventory into the market, so they just keep cutting the price to move volume.

But then they tried to disguise it with Cathy Woods, who said they’re cutting prices now, but they’re actually going to make you money because they’re going to be autonomous vehicles. They can act as taxis, but I just don’t see it.

We’ve been promised autonomous cars for 10 years now. I remember meeting Elon in person before Tesla became what it is today. I was sitting there and they were talking about autonomous cars. When I look at things, I look at it from a perspective of what happens when it goes wrong?

If an autonomous Tesla gets into a car accident, what happens? And they didn’t really have a satisfying answer for me. That’s why I think, at this point, the price cuts are just to move volume. I don’t even know if it is about a price war at this point. It’s just a matter of trying to keep their supply chain intact. And the other car companies are sitting there and essentially just letting them flounder.”

If There’s Such a Large Inventory, Is the Demand for Tesla’s Declining?

First and foremost, it’s a saturated market. And the problem here is that anyone who wants to buy a Tesla has already bought one. That’s one reason why they have such a large inventory. I don’t know many people who really want a Tesla and were just waiting for the price to drop substantially. There may be a few, but it’s not the majority.

There’s also the problem with charging electric vehicles in general. Back in 2012, when everyone was talking about EV’s (electric vehicles), the idea was that you could just charge them at night. And that’s not how electrical grids work. You have “peak” and “off peak” times. Nighttime is generally “off peak” hours. And it’s really important because you need those off peak hours to restore the electric grid, so it’s ready to go during the peak hours. You can’t just hammer it all day long.

We simply don’t have the capacity yet to be running at peak hours 24/7. That’s one of the problems with electric and green energy in general. We’re just not there yet, and if tens or even hundreds of thousands of people are charging their vehicles all night long, the electric grid simply can’t support that at this point. That’s why they’ve asked California residents to stop charging their cars at night, and start charging them during the day when more juice is available.

The good news is, if you’ve ever wanted a Tesla but couldn’t justify the price, now may be the time.

Thanks for reading,

Freedom Financial News