Tesla Sends Text to Model Y Reservation Holder
Gary Black, a Model Y reservation holder, got a text from Tesla to let him know the following things:
1: The IRA $7,500 tax credit cap was raised to $80,000 for all Model Y vehicles and that he would now get the EV credit back on the 5-seat Model Y
2: Tesla had raised the price of the Model Y long range from $43,490 to $54,990 and this is a hint - buy now before the prices goes up again
Here is the text that Gary received:
Hey gray the Model Y went
up in price as of last night
it's now at 54,990 the IRS
fixed adjusted their price
point for the model y and
now either the 5 or 7 seat
can be under 80k
The text looks like it was rushed, as it is not well formatted or punctuated, which leads me to believe that Tesla is communicating with a lot of customers about this.
This isn't the first time Tesla has sent a text to customers. A while back, Tesla was sending texts to Cybertruck reservation holders to let them know about some Tesla deals for Energy - an interesting sales tactic by Tesla.
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How High Will the Price of the Model Y Go?
The Model Y has steadily been increasing in price this year, and I expect this trend to continue.
The vehicle was at a low price of $52,990 and with the $7,500 IRA tax credit, that is a steal and makes the vehicle the lowest price it has ever been. Tesla is going to keep raising prices on this vehicle until the inventory starts to increase.
The big question is at what price point will the Model Y start to gain inventory rather than run out of inventory. Let's take a look at research done by ARK Invest to answer this question. They go over at what price points penetrate how much of the auto market.
Tesla's Addressable Market After Price Cuts & IRA Credit (USA)The Tesla Model 3 RWD's addressable market 2.5x'ed — from ~10% ($47K) of US consumers to ~25% ($37K)The Tesla Model Y LR's addressable market 4x'ed — from ~4% ($66K) of US consumers to ~16% ($45K)$TSLA pic.twitter.com/GwnyFoCM7N— Mathias Fons (@FonsDK) January 18, 2023
Let's look carefully at this. At about $60,000, there is a drop in total addressable market. Right now, the Model Y is at about $47,000 with the IRA tax credit. It has about another $3,000 before a small drop and another $13,000 before it sees a significant drop in total addressable market.
I think the Model Y could get as high as $67,000 with the IRA tax credit, if you go by affordability of the average consumer. The tax credit isn't realized right away currently. Therefore, I conclude that $59,990 will be the highest we see the Model Y price get raised.
If a standard range, 4680 battery Model Y is mass-produced at Giga Texas then this becomes even more interesting. That vehicle could compete with the Model 3 RWD for sales and be sold for $49,990 or less.
What do you think of this text from Tesla? Will the Model Y get to a price of $59,990?
In Related News: Tesla Reaches Important 1 Million Milestone
I got a text from my $TSLA salesperson yesterday telling me 1/ The IRA $7,500 cap was raised to $80K so I would now get the EV credit back on the 5-seat M-Y; and 2/ TSLA had raised the M-Y LR price from $53,490 to $54,990 (hint hint - buy now before the price goes up again). pic.twitter.com/89iQ14I0O0— Gary Black (@garyblack00) February 5, 2023
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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.