Tesla Model Y price cuts arrive for US buyers as the base version is now $35,490 with instant tax credit

Until now, Tesla has been holding out on direct price cuts for its bestselling Model Y in the US, but dropped its MSRP tags everywhere else, from Canda where a Model 3 now costs as much as a Model Y, to Europe and China, where Tesla battles BYD with Model Y price drops and numerous other discounts.

In the US, however, Tesla held off on direct Model Y price cuts and instead offered incentive stacking to future Model Y owners for the first time, allowing them to top the instant tax credit rebate off with inventory discounts and free  FSD or lifetime Supercharging transfers. Until now.

Lower Model Y prices arrive to the US

Again for the first time, Tesla is now bringing a "temporary" Model Y price cut to some US versions. The starting Model Y price for the base RWD version is now $35,490 with the federal tax credit, while the Model Y Long Range costs $40,490 after the government's subsidy that is now applied directly upon purchase. This is before any other inventory, state, or Cybertruck reservation holder rebates.

These 2%-2.5% Tesla Model Y price cuts are more modest than the up to 9% slash in Europe, but the unprecedented incentive stacking may result in a new Model Y price falling to under $30,000 with all the federal, state, and inventory discounts. That's not even mentioning the extra $1000 off that early Cybertruck reservation holders can get towards the purchase of a new Tesla vehicle.

Tesla's Model Y is now the world's most popular vehicle, beating Toyota's RAV4 and Corolla lines for the first time, so these mid-quarter price cuts are all the more unorthodox for Elon Musk's EV maker. Tesla says that "prices will increase by $1,000 or more on March 1," urging everyone to take delivery to pad the February sales numbers. 

Elon Musk also said that free FSD transfers were a "one time thing" last year, yet Tesla is now stacking the gratis transfer on top of all the other rebates and incentives it can muster, so hopefully the current "temporary" Model Y price cut will become permanent as the quarterly results report approaches.

Get the 80A Tesla Gen 2 Wall Connector with 24' cable on Amazon