Tesla Model 3 Highland price hiked in US, now upto $7k higher than Model Y

Tesla has just hiked the starting price of the new Model 3 Long Range (all-wheel drive) in the US by $1500, bringing it up to $47,490 from the time of its launch last month. The standard range, rear-wheel drive Model 3 still starts at $38,990. With this increase, the Long Range variants of the Model 3 and Model Y are now practically at the same price point. However, that's before accounting for the $7,500 federal tax credit, for which the Model Y is eligible but the Model 3 is not. Factoring that in, the Model Y Long Range actually starts at a full $7,000 less than its smaller sibling.

Federal tax credits in the US are dependent on where key components are sourced (in the Model 3's case, Chinese batteries are the culprit), so Tesla will have to move things around in the Model 3 supply chain to get that benefit.

Tesla is known to make price adjustments in response to fluctuations in demand and production capacity, so the price may return to its prior value, or even go lower in coming months. Only a month ago, Tesla had cut prices of both Model Y and Model 3 in China in order to stay competitive against BYD.

Comparing the Model 3 Long Range and the Model Y Long Range, the former does come out ahead slightly in terms of EPA estimated range (340 miles vs 310 miles) and acceleration from 0-60 mph (4.2 vs 4.8 seconds) on account of its smaller size. However, the Model Y wins out on top speed (135 mph vs 125 mph), and also has more cargo space, ground clearance and an 8” rear touchscreen.

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