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Tesla Model Y Inventory Is Rising - What Should Tesla Do About It?

Tesla Model Y inventory is continuing to rise as there is confusion with the IRA tax credit. What should Tesla do about this?

Tesla Model Y Inventory

We see Tesla Model Y inventory going up to its highest levels in quite some time and the climb has been pretty rapid. So far, Tesla has not commented or taken any action to address this.

Right now, the Model Y long range qualifies for the $7,500 IRA tax credit but only if you configure it with the $3,000 7-seat option. Many people have complained about this not being right as the 5 seater Model Y is still an SUV. Many buyers are waiting to see what Tesla plans to do.

Many people are wondering how to interpret the inventory chart. Is the inventory 1,400 units, or is it much more than that? Troy Teslike shares that he is calculating about 9 times what the inventory number is, so more like 13,000 here.

The rules of the IRA are unlikely to change anytime soon. Once the government makes a decision, it's very difficult to unwind. Therefore, Tesla is going to need to do something about this.

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IRA Tax Credit and What Tesla Should Do

There are a few options for Tesla to handle this and they are all very doable:

Tesla can release the Model Y standard range for $54,999. Right now, this is available in existing inventory on the Tesla website, but the price is closer to $63,000.

Tesla can make the 7-seater Model Y option free or have it be the default option. This alleviates the problem and would get buyers going into the Model Y knowing that it qualifies for the tax credit and they aren't paying anymore.

You could make the Model Y performance configurable with 7 seats. You could also sell a software limited Model Y standard range for $54,999 with an option to unlock additional range after delivery.

Lastly, you could add air suspension to the Model Y to increase ground clearance to get it to the $80,000 MSRP tax credit limit without the 7 seats.

Model 3 inventory is also going up and all of this is confusion about the IRA tax credit. It's unknown what the battery sourcing requirements are and the Tesla Model 3 RWD (standard range) has an LFP battery which is made from CATL in China.

It's all a big mess... Tesla needs to do something though as buyers are waiting to buy a Model 3 or Model Y until it becomes more clear what the IRA tax credit implications are.

What do you think Tesla should do about the increased inventory of the Model Y?

In Related News: Tesla's 10,000th Super Charger is Open in Shanghai

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.

Image Credit, Tesla, Screenshot