Tesla Electric Cars See Surging Demand After Model Y Price Drops 30%

After the latest round of price cuts and tax credits, a Tesla Model Y is 30 percent cheaper than a week ago.

Tesla cuts car prices
Popular Tesla cars are now up to 30 percent cheaper after the latest price cuts. Dean Mouhtaropoulos/Getty Images

Tesla (TSLA)’s electric cars are suddenly in hot demand after the company drastically cut the prices for some models by up to 20 percent and made Model Y, its best-selling vehicle, eligible for the $7,500 clean vehicle tax credits under the Inflation Reduction Act.

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Tesla’s U.S. new car inventory has dropped by 51 percent since Jan. 13, the day Tesla slashed prices for many Model 3 and Model Y vehicles, according to tesladata.mattjung.net, an independent site tracking Tesla inventory using data from Tesla’s website and other sources.

“I’ve never gotten so many DMs and messages from people showing they’ve ordered a new/inventory Tesla than I’ve gotten In the past 72 hours,” tweeted Sawyer Merritt, a Tesla investor with 375,000 followers, on Jan. 15.

The excitement tricked down to the resale market as well. Carmax, an online marketplace for used cars, said it sold more than half of its Tesla inventory within 24 hours of the latest price cuts.

Tesla has reduced prices for Model 3 and Model Y, its two mass-market vehicles, since late last year in a bid to boost sales. After the latest discounts, Model Y starts at $52,990, instead of $65,990. Including the $7,500 federal tax credit, the entry-level Model Y is $20,500, or 30 percent, cheaper. (The vehicle previously didn’t qualify for tax credits because of its high retail price.) The Model 3 now starts at $43,990 instead of $46,990.

Tesla Electric Cars See Surging Demand After Model Y Price Drops 30%