While Tesla’s long history of sudden price changes may not faze its loyal buyers, some newcomers could be scared off at a time when the automaker is hoping to increase sales to about 1.8 million globally this year from 1.3 million last year. Tesla doesn’t break out U.S. sales, but the Automotive News Research & Data Center estimates them at 491,000 vehicles in 2022.
Tesla buyers who took delivery before the price cuts complained of a sudden loss in resale value after they were announced. That rippled across the used-car market. Some owners of older Teslas complained on social media that their vehicles’ values had fallen so low that they couldn’t trade up to a new Tesla, even at the reduced prices.
Brauer said Tesla is likely to continue raising prices, depending on the strength of the economy and increasing EV competition.
One reason for Tesla’s mid-January price drop was to get the Model Y below the $55,000 price cap for cars to qualify for the EV tax credit under IRS guidance at the time. But the IRS has since changed the classification of the Model Y from a car to an SUV, pushing the price cap to $80,000 — and theoretically giving Tesla more room to raise prices.
“It’s clear Tesla dropped pricing on the Y more than it wanted to, as a response to government incentives, and it’s already moved the Y’s price back up,” Brauer said. “I’d expect prices to go up further, but at a modest rate to avoid attention and customer frustration. Tesla also has to wrestle with increased competition, higher interest rates and concern over the economy.”
Musk emphasized on the earnings call that Tesla was focused on pricing to stimulate demand.
“Price really matters,” Musk said. “I think there’s just a vast number of people that want to buy a Tesla car but can’t afford it.”
Tesla also has two U.S. factories churning out the most popular EVs in the market. Tesla had about two-thirds of the U.S. EV market last year, according to registration data and analyst estimates.
