Could Tesla’s Excess New Inventory Mean Trouble?

by Jack

The year is wrapping up and with the $7,500 federal rebate expiring tonight, Tesla is pushing for last minute sales. Going as far as leaving some stores open until midnight tonight.

Tesla has been trying their best to push out as many cars this year as possible. The original deadline to guarantee delivery this year was way back in October, yet here we are mere hours before the ball drops and they’re still chugging along. To do so, they have built an excess of new inventory and opened up all showroom models and loaners for sale. It is not too late to buy a Tesla and still receive the full $7,500 rebate. As long as you plan on buying one in the next few hours.

Federal Tax Credit Period
$7,500 On or before December 31, 2018
$3,750 January 1 to June 30, 2019
$1,875 July 1 to December 31, 2019

According to Electrek’s source, Tesla is going into the new year with over 3,000 Model 3s in inventory. That just might be where the trouble begins.

Obviously, Tesla’s goal was to sell all of their new inventory going into the new year. Unlike other manufacturers, Tesla’s model year changes alongside the calendar year. If history is any guide, we will see 2019 Teslas starting tomorrow.

That means Tesla is essentially sitting on over 3,000 outdated models. Traditional manufacturers play it smart. They change the model year spontaneously which allows them to get rid of as much inventory as possible beforehand. That’s why you have been seeing “2019” models while it still being 2018.

Additionally, those cars are sold in bulk to franchises, not the consumer. The manufacturers get full price on the cars while the franchisee takes a hit when having to discount last year’s model. Manufacturers do eventually offer franchises incentives to sell the outdated new inventory but typically, the stores take the larger hit in margins.

Tesla is in a unique position being directly responsible for all of their new inventory and sales. There is no one to push the loss onto other than themselves. Come tomorrow, we might see brand new 2018 Teslas discounted. It will be interesting to see what that discount is as your only incentive for buying a Tesla this year is an extra $3,750 in rebate. We could possibly see deeper discounts on the same exact car in just a few hours.

But I wouldn’t hold your breath. This simply wouldn’t be an issue if Tesla didn’t change their Model years on the 1st of January. They have an easy out here and I personally wouldn’t be surprised if that model year schedule changes tonight and we hold onto the 2018 year a tad bit longer before introducing the 2019s. It is only a weeks worth of inventory but if Tesla is planning on scaling their sales, it’s probably not best to tell their consumer what time of the year is the worst time to buy your car.

What should be noted is that there is no confirmed changes between a 2018 Tesla and a 2019 Tesla. This will simply only affect resell value as the market focuses on years, not changes. Tesla introduces lineup changes at random throughout the year and you truly never know what or when changes will occur.

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