June 9, 2023

Brighton Journal

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Tesla is dropping the price again, with new car prices now starting under $40,000

Tesla has implemented another wave of price cuts across its Model 3 and Model Y cars. It’s the second time this month that it has caused its electric cars to start with less than $40,000 before incentives.

After steadily and gradually increasing the prices of its electric cars over the past two years, Tesla has begun lowering those prices in 2023 to keep demand high.

It started with a big price drop in early January, and then some smaller price adjustments after that with most recently in February for the Model 3 and Model Y, and last month for the Model S and Model X.

We thought Tesla would take a break from cutting prices, but the automaker cut prices again across its entire line earlier this month.

Now just a few weeks later, Tesla is once again adjusting prices down on the Model 3 and Model Y in the US, and not by a small amount.

Tesla Model 3 pricing

The Model 3 Standard Range RWD, Tesla’s cheapest car, has gone up from $41,990 to $39,990.

It’s the first time in a long time that Tesla has owned an electric car that starts at under $40,000 for a brand new car.

However, it’s important to note that in this case, this is the only Tesla model that saw the federal tax credit cut from $7,500 to $3,750 after the battery source requirement.

It appears that Tesla is trying to counteract the low incentive with a direct price cut.

Model 3 performance remains at the same price and Tesla has yet to reopen orders for the Model 3 Long Range in the US.

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Tesla Model Y pricing

In tonight’s new pricing update, Tesla has cut prices for the Model Y significantly across the entire lineup.

Each variant saw its price drop by $3,000 overnight:

  • Model Y AWD: Went from $49,990 to $46,990
  • Model Y Long Range: Go from $52,990 to $49,990
  • Model Y Performance: Go from $56,990 to $53,990

Unlike the Model 3, all new Model Y cars are eligible for the full $7,500 tax credit. In some markets with state incentives, the Model Y will start at about $35,000 for a brand new car.

Take Electric

It’s hard to overstate how aggressive Tesla’s price cuts have been over the past few months.

Just a few months ago, Tesla was selling the Model Y Long Range for $66,000 in the US, but after several waves of price cuts over the course of a few months, it’s below $50,000 for the first time, and that’s before the relatively new $7,500 Federal Reserve. credit tax.

Although some dedicated Tesla fans or investors try to make us believe that it’s all part of Tesla’s mission to make EVs more affordable, these price cuts are really due to lower demand.

Tesla’s goal is to sell all of the vehicles it produces. If she could sell it at a higher price, it would have been in the past. Yes, there could be some cost improvements too, but not $16,000 or 24% in just a few months.

Demand does not match Tesla’s increased production rate.

To be fair, it’s not all Tesla’s fault because current interest rates are making all new car purchases more difficult right now.

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Either way, it’s something to watch.

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