- Tesla offers $7500 total discount on the Model 3 and Model Y, following another discount introduced earlier this fall.
- The automaker is believed to be facing slower demand for its used vehicles, and also faces a new and uncertain federal tax incentive structure in 2023.
- In the past two years Tesla has been raising prices on its EVs, but now faces a greater pool of competitors, as multiple new EVs enter segments that Tesla has dominated for years.
For the past few years Tesla prices have been going up for its four models, by significant amounts in some cases. But this winter those shopping for a Tesla will be able to get their cars for a lot less than they were a few weeks ago.
Tesla is now offering a $7500 discount on the Model 3 and Model Y, to the point that a base Model 3 is within spitting distance of that mythical $35,000 number that Elon Musk promised over five years ago.
As a result, a Model 3 now starts at $40,690, while the Model Y has finally dipped below the $60,000 mark, now starting at $59,690.
Both discounts are significant—a sign of just how much competition Tesla now has compared to two years ago, including for its least expensive (but now dated) models. The Austin-based automaker is finally seeing competition for the Model 3 and Model Y from multiple automakers, and the variety is only set to increase in 2023.
But these discounts also come just ahead of a revamp of the EV tax credit framework, revealed by the Biden administration months ago with some measure of confusion and controversy. Tesla vehicles may not be eligible for the $7500 amount of the credit that could be claimed by EV buyers of certain cars according to the Inflation Reduction Act in 2023, but they will be eligible for part of it. Tesla's discount, therefore, tries to get ahead of that new framework for consumers.
Of course, Tesla's abrupt price changes, including price drops, haven't always been welcomed by those who had placed their orders days prior to a price drop, so expect a mixed reaction from Tesla buyers.
The price cuts also come amid reports of slowing demand for new and used Teslas in the second half of 2022, though with no one single cause cited by industry observers.
The automaker is still believed to be on track to what could be its best year ever for production and delivery, owing to two new Gigafactories coming online in Texas and in Germany, even amid a massive drop in stock price likely tied to Musk's purchase of Twitter for $44 billion earlier this year, and the subsequent controversy over his new direction for the social media platform.
When it comes to serving up truly new models, Tesla has begun delivery of the Semi earlier this month, but those looking for a smaller truck will have to wait at least until this time next year. That's when the Cybertruck is expected to be ready for production at Gigafactory Austin, after quite a few delays and plenty of controversy.