Tesla prices have been falling all year, and today we have another price cut to report on most of Tesla’s most popular models, leaving the Model 3 at its lowest price ever.
Model Y – long range and performance $2k cheaper
Both the Model Y Long Range and Model Y Performance are now listed for $2,000 less than they were earlier today, with the Model Y Long Range at $48,490 and the Model Y Performance at $52,490. Tesla website.
Previously, prices for the two models started at $50,490 and $54,490, respectively.
This change comes days after Tesla introduced the cheapest Model Y seen in the United States, the new rear-wheel drive Model Y, which starts at $43,990. This model did not undergo today’s $2K price drop, and remains at the same price as it was introduced earlier this week.
The Model 3 is now the cheapest Tesla ever
The Model 3 also saw a price drop, with all three models discounted compared to earlier today. Both the rear-drive Model 3 and Long Range versions get a $1,250 price cut, and the Performance model is down $2,250 from previous prices.
These models now start at $38,990 for rear-wheel drive, $45,990 for the LR, and $50,990 for the Performance model. Previously, they sold for $40,240, $47,240, and $53,240, respectively.
The new prices mean that even with modest state, local or regional tax credits, plus the $7,500 federal credit, a new Model 3 could cost less than $30,000 to the right buyer. This is the cheapest new Tesla ever, with the exception of the briefly available $35,000 Model 3 — though with inflation and the lower tax credit at the time, today’s Model 3 is a better deal than it would have been.
The Model 3 recently got a major refresh with plenty of changes in overseas markets, though the updated Model 3 “Highland” isn’t expected to be available in the US until next year. So perhaps Tesla feels the need to improve the situation a little for buyers who may be waiting for the new version to appear.
This is the latest in a long line of Tesla price cuts, starting in January but continuing with several others this year. Recently, the company discounted a significant portion of the prices of the S and X models and also reduced the price of the FSD by $3 lakh.
Additionally, most Tesla vehicles are now eligible for ADA tax credits, which Tesla previously couldn’t access after the previous EV credit ran out, so many buyers could get another $7,500 credit on their income taxes. Their federalism. Although this may not last forever — given the way the tax credit law works, Tesla’s cheapest models, which use LFP batteries made in China, could lose access to half the credit next year.
Take Electric
Teslas now cost tens of thousands of dollars less than they did at the end of 2022. To be sure, 2022 was at the end of a year or two of big price increases, while the electric car market came under severe pressure due to the coronavirus. Supply disruptions, but these declines are still dramatic.
The price drop even led to owner protests as new buyers felt aggrieved by their cars losing thousands of dollars in residual value overnight. Imagine that, a protest Favor Economic inflation.
The declines also affected the rest of the electric vehicle market, as Tesla’s dominant position as the market and brand leader in electric vehicles, coupled with its previously high margins in the industry, means it has more room to prevail in the price war against other manufacturers, while… The declines also affected the rest of the electric vehicle market. It still maintains the perception of the brand as a higher class of electric vehicles.
This has made it difficult for other manufacturers trying to sell similar vehicles. We saw this earlier today, as the VW ID.4’s quarterly numbers came out. While the ID.4 saw record sales, VW only sold 10,707 electric vehicles in the United States in the third quarter. That’s less than a tenth of the number of electric vehicles delivered by Tesla in the United States in the same time frame.
The ID.4 is currently cheaper than the Model Y, with a base price of $37,495 (plus destination), but every Tesla price drop erodes that difference.
I believe this is the source of the current complaints across the industry about “demand issues” with EVs. Many manufacturers are complaining that it is difficult to increase sales after having no problem selling every electric car they made in 2021 and 2022. But those manufacturers didn’t lower their prices significantly this year, while Tesla did (well, VW introduced a cheaper ID.4 model). This year, just like Tesla did with rear-wheel drive).
To expand on the example above, the ID.4 is an incredibly attractive proposition at ~$38K versus the Model Y at $66K, especially if you can get the tax credit on the ID.4 but not on the Y. But if you deduct Roughly $25,000 off the price of this Model Y, and that calculus will change. Maybe that’s why the Model Y is now the best-selling car in the world.
The same goes for comparisons to other vehicles, most of which are about the same price as last year. But if the shortage of parts ends, if the component materials Much cheaperAnd if your competitors are attacking you on sales while still managing to cut prices by five figures several times over, there’s probably little price competition (the same goes for industries other than cars, by the way…).
And despite my personal dislike of Elon Musk’s ridiculous shenanigans, at this point, I’d be hard-pressed to say there’s any better deal in EVs than the Model 3, or even in cars as a whole. Maybe you can spare the excellent Chevy Bolt, which is a screaming bargain at a base MSRP of $26,500 in the last quarter of production.
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