Tesla’s red-hot growth driven by Model Y price cuts

Chevrolet was Tesla’s closest EV competitor brand, with 6.5 percent of the EV market, Experian data showed. But Chevy’s position is based on 29,282 registrations for the sub-$30,000 Bolt EV and Bolt EUV, which will be discontinued at the end of the year. Ford was third with 22,425 registrations for its Mustang Mach-E, F-150 Lightning and E-Transit van.

All of Tesla’s models received sizable discounts starting in January. Along the way, the automaker has made modest adjustments and added incentives, such as free charging at its Supercharger network and trial versions of its advanced driver-assistance software.

In addition to the price cuts, the Model Y and Model 3 regained eligibility for federal EV tax incentives on Jan. 1 under new rules in the Inflation Reduction Act. The Model X and Model S don’t qualify under the new rules because they exceed the act’s price caps of $80,000 for crossovers and $55,000 for sedans.

While some had predicted Tesla would lose its market dominance due to greater competition, the EV leader has been able to leverage growing production at its factories in California and Texas, analysts say. CEO Elon Musk has said the company is willing to give up some profits to maintain growth.

The most popular rival to the Model Y, Volkswagen’s ID4 compact crossover, more than tripled its registrations to 14,094 vehicles in the January to May period compared to last year. Ford’s Mustang Mach-E, also a compact crossover, saw new registrations fall by 29 percent to 10,948 vehicles, Experian data showed. Both qualify for the $7,500 federal tax credit.

Hyundai’s Ioniq 5 had a decline in registrations for the five-month period, falling 3.4 percent vs. the same period last year to 10,406 vehicles. Kia’s EV6, which shares a platform with the Ioniq 5, had a 29 percent drop to 6,780 vehicles, Experian said. Hyundai and Kia both lost access to the federal EV incentive last year because the new rules require North American assembly for a vehicle to qualify.