EV maker Tesla is ready to report a record number of vehicle deliveries for the second quarter. The big number is due in large measure to the federal tax incentives for electric vehicles.
Texas-based Tesla delivered more than 445,000 vehicles during the April through June timeframe, according to analysts estimates. The strong result comes despite other automakers seeing an increase in EV sales as well.
In Tesla’s case, a rising tide does seem to lift all boats. Sales of pure battery electric vehicles are forecast to reach nearly 500,000 units in the first half, up from 355,000 a year earlier. EV share is approaching 7% of the total U.S. auto market, according to Cox Automotive.
The uptick would be a 5% jump from the 422,875 Tesla vehicles delivered during the first quarter of the year, Reuters reported. However, the steady increase is all part of the plan for Tesla CEO Elon Musk, who forecast more than 1.5 million sales for 2023.
This sales increase comes despite aging product line-up with nothing new expected for the first 10 months of the year. The company’s latest new product, the Cybertruck, will arrive at the end of the year, but won’t be up to full volume production sometime next year.
Enticements
Aside from Tesla models being eligible for at least part of the EV tax credits from last year’s Inflation Reduction Act, Musk has engaged in a series of price cuts since the beginning of the year to move more metal.
Overall, the prices on Tesla vehicles are down significantly since the beginning of 2023. Six of the price changes this year were price cuts. After the latest price change, the base level Model S and Model X vehicles are 16% and 19% less expensive from Jan. 1. The Model Y’s long-range iteration is about 23% cheaper, Reuters noted.
The Model S is now $88,490, and the Model X comes in at $98,490. The performance versions are now $108,490. The Model Y long-range and performance variants are $47,490, $50,490 and $54,490.
In early May, Tesla announced it was cutting $5,000 off the price of the Model S and Model X, plus $2,000 off the Model Y and $1,000 off the Model 3 sedan.
In March, Tesla slashed $10,000 off its Model X SUV and $5,000 on the Model S. The move comes after previous price cuts of up to 20% in January.
Tesla’s product mix is heavily weighted towards the less expensive Model 3 sedan and Model Y crossover. Together, those models made up 96% of Tesla’s 2022 sales. The Model S and Model X start with substantially higher prices, and Musk intends to increase sales of the top trims with these price reductions.
The price cuts appear to have boosted Tesla sales as it reported a 36% increase in first quarter deliveries last week. In the first three months of this year, it sold 422,875 vehicles, mostly Model 3 and Model Y cars.