Tesla Reduced Model 3/Model Y Prices Again By $2,000-$3,000

Second time this month, Tesla applied price reductions on some of its electric cars in the United States, bringing Model 3 and Model Y prices to an even lower level.

According to the company’s website, the entry-level Tesla Model 3 RWD is now $2,000 less expensive and starts at $39,990 (down 4.8 percent from $41,990), without destination charge and order fee. There is no price change of the Performance version, while the Long Range AWD remains not available (but expected to be re-introduced later in 2023).

In the case of the Tesla Model Y, all three versions of the car (AWD with 4680-type battery cells, Long Range AWD and Performance) received a $3,000 price reduction. The Model Y AWD now starts at $46,990 (down 6.0 percent from $49,990), without destination charge and order fee.

Here are the changes:

• Tesla Model 3 RWD: $39,990 (-$2,000 or -4.8% from $41,990)
• Tesla Model Y AWD: $46,990 (-$3,000 or -6.0% from $49,990)
• Tesla Model Y Long Range AWD: $49,990 (-$3,000 or -5.7% from $52,990)
• Tesla Model Y Performance: $53,990 (-$3,000 or -5.3% from $56,990)

This is the second price reduction this month, and one of many applied so far this year. Let’s recall that there was a significant reduction applied across the line in January 2023 (and tweaked a few times later – here, here, here, here and here).

Some of the analysts asks questions whether Tesla will be able to maintain its relatively high profit margins now. We guess that this might be answered later today, during the Q1 2023 financial report.

Below we gathered prices of all Tesla cars.

Tesla Model 3:

• RWD: $39,990 (-$2,000 or -4.8% from $41,990)
• Long Range AWD: not available (expected to be available again in 2023)
• Performance: $52,990 (no change)

Tesla Model S:

• Long Range AWD: $84,990 (no change)
• Plaid: $104,990 (no change)

Tesla Model X:

• Long Range AWD: $94,990 (no change)
• Performance: $104,990 (no change)

Tesla Model Y:

• AWD: $46,990 (-$3,000 or -6.0% from $49,990)
  (Made-in-Texas, with 4680-type battery cells and 279 miles of range)
• Long Range AWD: $49,990 (-$3,000 or -5.7% from $52,990)
• Performance: $53,990 (-$3,000 or -5.3% from $56,990)

* Tesla adds Destination fee (DST) of $1,390 and Order Fee of $250 to all its models ($1,640 total).

** Tesla Model 3 and Model Y are eligible for $7,500 federal tax credit, aside of the Model 3 RWD version, which is eligible only for $3,750.

Tesla Prices Vs. Federal Tax Credit

It’s worth to note that from April 18, the Tesla Model 3 RWD (LFP-powered) is eligible only for a $3,750 federal tax credit (because of the new federal guidance on the critical minerals and battery component requirements), compared to $7,500 in the case of other Model 3 and Model Y cars. This means that the Model 3 RWD’s effective price remains basically similar as a month ago (the price was reduced by $1,000 and $2,000 this month for a total of $3,000).

However, the Tesla Model Y is now very interesting, because it’s eligible for full $7,500 federal tax credit. This means a starting point of $41,130 (with obligatory costs).

If we would have to guess, we would expect that the Tesla Model 3 Long Range AWD will be soon reintroduced, because with $7,500 federal tax credit it might be a serious competitor to the RWD version.

* estimated/unofficial/rough values, ** EPA range according to Tesla website