Tesla on Saturday again reduced the prices of some of its models for the US market, as part of a worldwide price cut. With the cuts, anyone considering the Model 3 and Model Y in the US may want to take a fresh look at the numbers.
The base price of the rear-wheel-drive Model Both qualify for a $7,500 electric vehicle tax credit, reducing the effective price for many households to just $37,130 and $42,130, respectively.
The Model 3 has not received a corresponding price cut and as of Monday morning, remained the same at $42,130 for the base Model 3 RWD and $49,380 for the Model 3 Long Range AWD. The Model 3 is also not eligible for the EV tax credit.
Tesla Model 3
So, Americans who are in the income bracket qualify for Federal EV tax credit—which is a modified adjusted gross income (MAGI) limit of $300,000 for married couples filing jointly, $225,000 for heads of household, or $150,000 for other filers—can receive Model Y Long Range AWD for the same price as the base Model 3 RWD. Additionally, the base Model Y RWD is now priced $5,000 less than the base Model 3 for those who qualify for the tax credit.
Tesla’s manufacturing facilities and predictions of higher production volumes for the Model Y may also play a role in this price adjustment. The Model Y is currently the best-selling electric vehicle—and passenger cars around the world; it is produced for the US at both the Fremont, California plant and in Austin, Texas, while the Model 3 is produced for the US only at Fremont.
2024 Tesla Model Y. – Courtesy of Tesla, Inc.
Prices for the Model S and Model X also decreased by $2,000 in both cases. Tesla has also reduced the price of the Full Self-Driving package to $8,000, from $12,000 (and $15,000 until recently), eliminates the $6,000 enhanced Autopilot option required for adaptive cruise control combined with steering assist.
“Your car will be able to drive itself almost anywhere with minimal driver intervention,” Tesla is now advertising as part of its explanation for FSD.
The company typically drops prices at the end of their respective quarters, so the timing is a bit odd. The first quarter of 2024 is Tesla’s worst sales since the pandemic shutdown. Its quarterly meeting is on Tuesday, April 23, so this could be a proactive (and preemptive) move from Tesla leadership, including CEO Elon Musk, to attract interest.
Note: The Green Vehicle Report always includes mandatory fees when possible, and from now on, it will include Tesla’s $250 “order fee” — for lack of a reasonable way to avoid it.
