Tesla increases Model 3 price to account for import tariffs bringing it even closer to Model Y pricing

When the European Commission imposed up to 48% tariffs on electric vehicle imports from China, Tesla warned that this may affect its car prices, too.

That warning has now materialized, as Tesla just raised all Model 3 version prices with the equivalent of $1,623 across the board in Europe.

It may also have to increase the Model 3 price further, depending on the outcome of the inspections that European officials did at its Gigafactory in Shanghai. In general, it expects to be slapped with lower tariffs than pure Chinese players like BYD, NIO, or SAIC, hence the fairly modest increase.

The price of a base RWD Model 3 has gone to 42,490 EUR overnight, up from 40,990 EUR before, and the Long Range and Performance trims saw the same sticker tag increase.

Thankfully, Tesla isn't raising the price of its most popular vehicle, the Model Y, as it is made in Europe at Giga Berlin, rather than being imported from China like the Model 3.

Still, with this latest tariff-induced tag increase, the difference between the starting price of the Model Y in, say, Germany, becomes even more negligible at just 2,500 EUR, boding ill for the Model 3 sales going forward.

The European Commission sent its trade emissaries to inspect Tesla's Shanghai factory and get acquainted with the automaker's arguments in the June 26–June 28 period. This was a much shorter timeframe than the weeks on end it took for the EC officials to examine Chinese players for any government subsidies it deems illegal.

Those who cooperated with its investigation like BYD got a much lower tariff of 17%, while the government's SAIC, which didn't let inspectors in, was slapped with the highest 38% number on top of the 10% import tax the EU already collects.

Seeing that it isn't in the immediate list of those burdened with the new import tariffs that average about 21%, Tesla applied for a preferential treatment in order to present its case, and got it. This led to the shorter inspection period and an apparent expectation for milder tariffs, considering the modest Model 3 price increase.

The final decision on the European import tax that will be wielded over electric cars imported from China, however, will be announced in November, and that is when the fate of Tesla's import models will be determined.

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