Kim Kyung Hoon/Reuters
- Interest in Teslas on car-shopping website Edmunds surged after last week’s price cuts.
- Act now on Tesla deals before they dry up, analysts say.
- Tesla’s pricing war appears to be paying off.
Tesla’s price cuts are drawing in more buyer interest, according to data collected by car-shopping website Edmunds.
After Elon Musk’s automaker slashed the prices of its most popular vehicles last week, on-site shopper interest in the EV-maker’s cars surged, Edmunds found.
The Model Y, which saw a 20% price cut, became the second most-researched vehicle last week, up from 70th place the week before. The Model 3, which now boasts a $43,990 price tag, was the 11th most-researched vehicle on Edmunds’ site, up 36 spots from the previous week.
“These price cuts, as well as inventory on the ground, will win Tesla market share and help consumers overlook the brand’s aging lineup,” Edmunds analyst Jessica Caldwell wrote in a Thursday note. “Lower prices and immediate availability undeniably resonate with the American consumer.”
Tesla’s price cuts also come at a time when shoppers are still struggling to find good deals on new vehicles, making discounts like Tesla’s all the more appealing, Caldwell wrote.
Tesla’s pricing war might pay off
The early surge in interest also shows Tesla’s pricing war may pay off as the electric car company grapples with its first real drop in demand. Analysts have worried for some time that a series of discounts and moves like selling into rental fleets were early signs of over-building at Tesla, an age-old struggle in the automotive industry.
No longer priced as luxury vehicles, Tesla’s cars will now compete with EVs marketed to mainstream buyers. The price cuts also allow Tesla’s vehicles to qualify for an additional $7,500 tax credit on new EVs as part of the Biden administration’s Inflation Reduction Act, another draw for shoppers.
With more changes coming to the EV tax credits later this year, Edmunds analyst Ivan Drury advises interested Tesla buyers to act now, lest the deals dry up. EV customers on wait lists with uncertain timelines may want to consider snapping up a Tesla instead, he said.
“Now is the time to research vehicle inventory, secure financing, and determine how current and upcoming EV tax credits will impact your purchase,” Drury wrote in the note. “Price cuts of 20% or more, with incentives, nationwide don’t come around often, so acting now is in your best interest before any corrections in the opposite direction.”
Even as Tesla begins acting more like its legacy counterparts — a welcome change for some investors — Musk continues to zig when his competitors zag. Companies like Ford and GM are learning to operate on leaner inventories and sacrifice market share for profits after the pandemic and years of supply chain snags have taught these companies to do more with less.