Tesla is taking a buzzsaw to the price of its best-selling Model Y electric crossover in an attempt to clear out its biggest-ever inventory stockpile. The Austin, Texas-based automaker is dropping prices after it produced 46,561 more vehicles than it delivered in the first quarter of 2024. That means it has more cars in its inventory than ever before.
The company is cutting rear-wheel-drive Model Y prices by $4,600. The Model Y Long Range and Model Y Performance will see $5,000 price cuts, according to Bloomberg. If you include the $7,500 Federal EV Tax Credit, the Model Y RWD starts at $33,890, the Model Y Long Range is $37,490 and the top-end Model Y Performance costs $40,690. Tesla is also throwing in three months of free Full-Self Driving beta to help move cars. (Reminder that FSD can’t actually fully drive for you.)
Tesla has partially blamed its global sales decline on shutdowns of its factory in Germany and the fact it’s changing over its Fremont, California plant to build the upgraded Model 3 sedan, but some analysts aren’t buying that theory. Here’s more from Bloomberg:
The difference between the number of vehicles Tesla built and sold in the quarter “dispels the notion that 1Q deliveries were somehow supply rather than demand constrained,” Ryan Brinkman, a JPMorgan Chase & Co. analyst who has the equivalent of a sell rating on Tesla stock, wrote in an April 3 report.
Brinkman cut his price target for the shares to $115 from $130 and lowered estimates for first-quarter revenue and earnings per share. He now projects Tesla will report a $1.3 billion free cash outflow, rather than a more than $300 million inflow, due to an expected record increase in finished goods inventory.
As of 12:15 p.m. EST Friday, Tesla’s stock has fallen about 2.7 percent. Overall, it’s down over 33 percent so far this year.
A version of this article originally appeared on Jalopnik.