Tesla Inc (NASDAQ:TSLA) researcher Troy Teslike expects Model 3 demand to be the biggest challenge for the EV giant in the second quarter.
What Happened: Lowered demand for the Model 3, Teslike said, will be the company's biggest challenge in terms of deliveries. The two low-priced versions of the Model 3 don't qualify for a federal EV tax credit of $7,500 while the corresponding versions of the Model Y do.
This brings the effective price of the Model Y for eligible customers down below the corresponding Model 3, making the Y a more appealing option for buyers.
— Troy Teslike (@TroyTeslike) April 30, 2024
In terms of deliveries, Tesla's biggest challenge in Q2 is expected to be Model 3 demand in the US due to the tax credit situation. The Standard Range and Long Range versions of the Model 3 don't qualify for the $7,500 tax credit, making them more expensive than the same Model Y...
Without credits, the Model 3 sedan is the cheapest Tesla. Earlier this year, Tesla launched the refreshed Model 3 across the U.S., with slight differences to both the interior and exterior design of the vehicle.
| Model 3 | Model Y | |
| Rear-Wheel Drive | $38,990 | $42,990 |
| Long Range | $47,740 | $47,990 |
| Performance | $53,990 | $51,490 |
Unlike the Model 3's Performance variant or any version of the Model Y, the rear-wheel drive and long-range versions of the Model 3 are not eligible for any tax credit. As a result, all variants of the Model 3 are priced at a higher point than their respective Model Y counterparts.
| Model 3 | Model Y | |
| Rear-Wheel Drive | $38,990 | $35,490 |
| Long Range | $47,740 | $40,490 |
| Performance | $46,490 | $43,990 |
Model 3 and Y make up the majority of Tesla's sales, thanks to their lower price point as opposed to the remaining of Tesla's lineup. In the last quarter, the two vehicles accounted for 95.6% of the company's total deliveries.
Tesla's Disappointing First-Quarter Deliveries: Tesla reported an 8.5% year-on-year decline in first-quarter deliveries with 386,810 vehicles delivered across the world, marking the first time Tesla has reported a drop in quarterly deliveries in about four years since the COVID-19 pandemic in 2020.
The company attributed the decline in volume partially to the production ramp of the refreshed Model 3 at its Fremont factory.
Looking Forward: Teslike expects negative year-on-year delivery growth for the second and fourth quarters. Deliveries in the third quarter last year were lower, providing a chance that Tesla could beat the numbers this year, he said.
However, Tesla CEO Elon Musk said during the company's first-quarter earnings calls earlier this month that the company will have higher sales in 2024 compared to 2023. The company delivered 1.8 million cars last year.
Check out more of Benzinga's Future Of Mobility coverage by following this link.
Read More: Elon Musk Reminisces How Tesla Achieved Its First Quarterly Profit 11 Years Ago: '...A Case Of Deliver Or Die'
Photo via Shutterstock
