Kelly Blue Book, one of the most trusted automotive valuation and research companies, released the results of a study Wednesday showing that registrations for the Model Y, Tesla’s (NASDAQ:TSLA) least expensive SUV, grew by 103% between January and May. The Model Y currently starts at $47,740.
The electric SUV became the worlds best-selling vehicle last quarter, driven largely by price cuts across the globe and a sales surge in China.
In April, Elon Musk acknowledged that Tesla's focus was on increasing the production and sales of the Model Y, even if it meant accepting lower profit margins for the vehicle. “We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and a higher margin,” Musk said.
Federal electric vehicle tax credits could have also played a role in supporting Tesla's sales. Both the Model 3 and Model Y are now eligible for a $7,500 tax rebate, which is exclusive to vehicles manufactured within North America. However, according to information posted on Tesla’s website Tuesday, the federal tax credits for the Model 3 are expected to decrease after December 31.
Shares of TSLA are up 1.46% in afternoon trading on Thursday.