Tesla increases Model Y, cuts Model 3 prices in the U.S.

ByBizhack Editorial

Feb 5, 2023

Image source tesla

Prices for Tesla’s all-electric Model Y crossover have gone up, but those for the Model 3 sedan have gone down.

Last night, the price of the Model Y Long Range from Tesla jumped by $1,500 to $54,990, while the price of the Model Y Performance trims increased by $1,000 to $57,990 from $56,990.

Model 3 Rear-Wheel-Drive automobiles also had a modest decrease, down $500 to $43,490 from $43,990.

It is the third price change the Model Y has experienced in the previous month. Tesla increased the price by $500 a few weeks after slashing prices across its portfolio in early January, with the Model Y trim levels seeing the largest $13,000 price cuts.

The Model Y crossover had a number of trim levels that, because of their weight, did not fit the American definition of an SUV. As a result, they were priced above the $7,500 tax credit threshold for non-SUVs, which is $55,000.

This changed yesterday when the IRS amended its list of eligible vehicles and added the entire Model Y family to the SUV category, bringing the incentive’s price cap up to $80,000. The $7,500 tax credit is now available for all Model Y trims.

Tesla’s price reductions increased demand but had a significant impact on the company’s automotive profitability. Tesla is trying to cushion the shock of the weaker margins with small price hikes that will help with its profit per vehicle now that the Model Y is on the list of eligible vehicles.

A $500 reduction also affected the Model 3 Rear-Wheel-Drive, making it somewhat more cost-effective for some consumers. The $43,490 is over $22,000 less than the average price of a new electric vehicle in December 2022, according to Kelley Blue Book data, which was $65,041 on average.

Prices for the Model 3 Performance remained at $53,990 without changing.

Delivery dates for the Long Range variant of the Tesla Model Y range from March to May, while customers may receive their Performance trims between February and March. Both projected delivery dates are predicated on common choices.

The projected delivery date for the Tesla Model 3 Rear-Wheel-Drive variant is between February and March. The Model 3’s Performance configuration has the same time frame.