There has been a lot of negativity recently in the media regarding a “softening demand” for electric vehicles. Not even the mighty Tesla Model Y has been immune to this perceived slowdown in demand, despite being the best-selling vehicle in the world in 2023.
Of course, we’ve had temporary slowdowns in the EV market in the past and we will have them again. The electric vehicle market is often influenced by a complex mix of regulations, government incentives, tariffs and high interest rates. These factors and more all contribute to the regular demand fluctuations we’ve seen over the years. It doesn’t help that the market is dominated by only a handful of big players. So when those sales leaders see a drop in demand, it can have a big impact that can’t be offset by rising sales for smaller EV players.Â
EV Prices Are Finally Trending Downward
While electric vehicles initially hit the market in the early 2010s, the primary goal for legacy automakers was to meet regulatory requirements, not make a profit. So buyers could often snag a first-generation EV for a fraction of MSRP.Â
But as demand grew over the decade, so did the cost of ownership. Between 2020 and 2023, dozens of new models and product categories were launched. This excitement drove demand which arguably peaked in late 2022 to early 2023. By then, inflated pricing and high interest rates meant EVs were completely out of reach for many buyers.
We began to see some downward movement in 2023 as big players like Tesla and Chevrolet lowered prices on their most popular models. This trend continued in Q1 2024.
But rest assured, demand will eventually exceed supply again and automakers will be there to take advantage just like they did a few years ago. Which is why right now is one of the best times to make a purchase in years. The environment may be bad for the industry, but for consumers things could not be better.
Between May 10th and May 31st, Tesla is offering a competitive 0.99% APR when financing a Model Y. For buyers that qualify for the federal rebate and one of the many state rebates, Tesla’s electric crossover has suddenly become a very affordable option compared to just a year or two ago.
As usual, this incentive is only for “well-qualified buyers” of course and can be applied to 36, 48, 60 and 72-month financing terms. But if you were hoping to spread payments out with 84-month financing, the APR jumps to 2.99%.Â
Automakers have been lowering prices and offering major incentives for months now and are starting to see results. However, many of the best deals have been leasing incentives in North America, especially models that no longer qualify for the $7,500 consumer rebate.Â
While the Tesla Model Y isn’t one of the vehicles that lost rebate eligibility, it too saw demand slump during Q1. The automaker responded by lowering prices across the board, offering more attractive leases and has been adding large discounts on inventory vehicles.
So if you’ve already considered adding a Model Y to your garage, this might be the perfect time to pull the trigger. Just keep in mind that a Model Y facelift is likely on the way, and Tesla has confirmed a more affordable model is coming next year. So you may be able to snag even better deals as the year goes on.Â
What do you think about Tesla’s current offers? Is it a good time to take the plunge or would you wait it out for an even better deal? Let us know in the comments below.
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