Tesla (TSLA) stock was lower today despite slashing prices to boost sales in the U.S.
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According to figures from Cox Automotive, July was the second-best month ever for sales of electric vehicles in the States. It is estimated that sales came to over 130,000, which would mark a 20% jump from 12 months ago.
Tax Surge
The charge in EV sales is understood to have been driven by President Trump’s decision to scrap the $7,500 Federal EV tax credit program, as he focuses more on fossil-fuel energy growth. This is expected to keep EV demand powering higher in the third quarter as well.
Another strong factor behind the surge was price cuts. Kelley Blue Book (KBB) reported that the average transaction price or, ATP as it is known, for new EVs was $55,689, down 2.2% from June and 4.2% from a year ago.
Tesla, the top EV seller in the US, led from the front when making price cuts.
Tesla’s July ATP was $52,949, down 2.4% compared to June and sliding 9.1% compared to a year ago. KBB said Tesla incentives in July were higher as well, leading to increased sales compared to June but down year over year.
KBB said a higher mix of cheaper base Model 3 sedans and Model Y SUVs pushed overall ATPs lower for Tesla.
Record Incentives
For the industry as a whole, the average incentive package for EVs hit 17.5% of ATP in July, which KBB said was a record in the modern era of EV sales, and up more than 40% compared to last year.
“The urgency created by the administration’s decision to sunset government-backed, IRA-era EV incentives was expected to create serious demand for EVs in the short term,” Cox Automotive senior analyst Stephanie Valdez Streaty said. “At this pace, Q3 will be the best ever and then some, as buyers jump in before the big incentives dry up.”
According to a Reuters report wait times for Tesla’s Model Y in the U.S. have stretched to four to six weeks, up from one to three weeks earlier in the summer.
Tesla also raised lease prices for the Model Y by 14%, suggesting it has some pricing power as demand for the vehicle rises.
It’s welcome news for Tesla, which has faced a global sales plunge this year – see above – as it faces up to increased EV competition, criticism over its designs and the damage to brand reputation caused by chief executive Elon Musk’s involvement in the Trump administration.
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