Tesla has again cut Model 3/Model Y prices by $2,000-$3,000

Tesla Model 3 RWD starts at $39,990 (+DST), Model Y AWD starts at $46,990 (+DST).

For the second time this month, Tesla has applied price cuts to some of its electric cars in the United States, sending Model 3 and Model Y prices down even further.

According to the company’s website, the entry-level Tesla Model 3 RWD is now $2,000 cheaper and starts at $39,990 (down 4.8 percent from $41,990), excluding destination charge and order fee. There is no price change for the Performance trim, while Long Range AWD remains unavailable (but is expected to be reintroduced later in 2023).

In the case of the Tesla Model Y, all three versions of the car (4680 Battery Cell AWD, Long Range AWD, and Performance) received a $3,000 price cut. Model Y AWD now starts at $46,990 (down 6.0% from $49,990), excluding destination charge and order fee.

Here are the changes:

• Tesla Model 3 RWD: $39,990 (-$2,000 or -4.8% from $41,990)
• Tesla Model Y AWD: $46,990 (-$3,000 or -6.0% from $49,990)
• Tesla Model Y Long Range AWD: $49,990 (-$3,000 or -5.7% from $52,990)
• Tesla Model Y performance: $53,990 (-$3,000 or -5.3% from $56,990)

This is the second price cut this month and one of many implemented so far this year. Let’s recall that there was a significant reduction applied across the line in January 2023 (and the prices were changed several times later – here, here, here, here and here).

Some analysts question whether Tesla will be able to maintain its relatively high profit margins now. We guess that could be answered later today, during the Q1 2023 financial report.

Below we have collected the prices for all Tesla cars.

Tesla Model 3:

• RWD: $39,990 (-$2,000 or -4.8% from $41,990)
• Long-distance AWD: Not available (expected to be available again in 2023)
• Performance: $52,990 (unchanged)

Tesla Model S:

• Long-distance AWD: $84,990 (unchanged)
• Plaid: $104,990 (no change)

Tesla Model X:

• Long-distance AWD: $94,990 (no change)
• Performance: $104,990 (unchanged)

Tesla Model Y:

• AWD: $46,990 (-$3,000 or -6.0% from $49,990)
  (Made in Texas, with 4,680 battery cells and 279 miles of range)
• Long-distance AWD: $49,990 (-$3,000 or -5.7% from $52,990)
• Performance: $53,990 (-$3,000 or -5.3% from $56,990)

* Tesla adds a $1,390 destination charge (DST) and a $250 ordering charge to all of its models ($1,640 total).

** The Tesla Model 3 and Model Y qualify for a $7,500 federal tax credit, except for the rear-wheel-drive Model 3, which qualifies for only $3,750.

Tesla prices vs. Federal tax credit

It’s worth noting that as of April 18, the Tesla Model 3 RWD (LFP-powered) is only eligible for a $3,750 federal tax credit (due to new federal guidelines on critical minerals and battery component requirements), compared to $7,500 in the case of other cars, the Model 3 and Model Y. This means that the effective price of the Model 3 RWD remains basically the same as a month ago (the price was reduced by $1,000 and $2,000 this month for a total of $3,000).

However, the Tesla Model Y is now very interesting because it qualifies for the full $7,500 federal tax credit. This means a starting point of $41,130 (with mandatory costs).

If we had to guess, we’d expect the Tesla Model 3 Long Range AWD to be reintroduced soon, because with the $7,500 federal tax credit, it could be a serious competitor to the rear-wheel drive version.

* estimated/unofficial/approximate values, ** EPA range according to Tesla website