Tesla Model 3 and Y price cuts bring MSRP to new all-time low amid staunch competition
Since Tesla started a price war earlier this year, the brand has initiated multiple price cuts across its range of electric vehicles. The latest price cuts come by way of the Tesla Model 3 and certain versions of the Model Y, and they may be indicative of a shift or stabilisation in the EV market.
For the Model 3, prices have dropped for all variants, with the base Model 3 RWD now coming in at US$38,990, down from US$40,240, while the Model 3 Long Range now costs US$45,990, down from US$47,240. The Model 3 Performance, on the other hand, now sells for US$50,990, US$2,250 less than the previous price of US$53,240.
As for the Model Y, only the Long Range and Performance variants received price cuts, with the Performance now coming in at US$52,490, while the Model Y Long Range now sells for US$48,490. Model Y discounts represent a reduction of US$2,000 on each version.
Bear in mind that these prices are before any EV tax incentives, which may bring prices down by US$7,500 or more in some cases.
As the electric vehicle market stabilises, and EVs become less of a novelty, there may be a lull in adoption rates. Increasingly competent and attractive competition from the likes of Hyundai, Kia, and Volvo may also be contributing factors that have led to Tesla's discounted rates. Parts and production costs also make a huge difference — previous reports claim that Tesla managed to drop battery costs by around 20%.
Further, the Model 3 price cuts can somewhat be explained by the imminent arrival of the new Model 3 Highland refresh, which has yet to land in the US. Though, the Model Y price cuts largely seems to be in response to a changing EV industry which may be seeing less demand or a commoditisation of what were previously premium vehicles.
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Model Y Long Range starting price:— Sawyer Merritt (@SawyerMerritt) October 6, 2023
• Dec 2022: $65,990
• Oct 2023: $48,490
A difference of -25% pic.twitter.com/zK6QH6NR4u