Tesla‘s inventory in the U.S. has reached a new high, indicating that recent price cuts from the EV maker might not be doing enough to spur demand.Â
In recent weeks, Tesla has made significant price cuts on several popular models- in some cases exceeding 20%.Â
The automaker made it evident on its earnings call last week that it constantly compares new orders with available capacity and intends to keep modifying prices to generate demand equal to the production pace.
Tesla had 15 days worth of inventory at the end of the previous quarter, which was a record high. According to data tracked by Matt Jung, Tesla’s new inventory vehicles in the U.S. have reached around 2,600 vehicles.Â
Over 1,200 Model X vehicles are reportedly stranded in the automaker’s inventory in the U.S. Despite the recent price cuts, there is also a Model 3 issue, as inventories increased by 50% over the second part of the month.
The only encouraging development is that the Model Y, now Tesla’s best-selling vehicle, shows signs of benefiting from the price cuts. Following the last two price reductions, the Model Y inventory fell by half to just 300 units.
On the other hand, investment advisor Gary Black of Future Funding LLC argued on CNBC’s Last Call that “The price drops don’t make much sense, so this isn’t the best action for Tesla, at least not for now.” He continues, “And really, what they need to do to continue to drive EV adoption is to teach people why an EV is a better option.”
It’s worth mentioning that CEO Elon Musk recently hinted at the possibility that the company could sell cars for zero profit and then earn money from its driving assistance programs. Having said that, Tesla generates income from various sources, including its solar energy goods, supercharger network, energy storage products, and other businesses.
