Tesla has lowered the price of its Model 3 and Model Y vehicles in the US for the second time this month, bringing the starting price of Tesla’s most affordable EV below $40,000 (before incentives). The adjusted pricing was rolled out shortly before Tesla is expected to release its quarterly results later today.
The Model 3 Standard Range RWD has been reduced from $41,990 to $39,990. That’s not the cheapest price we’ve seen for the EV – Tesla had previously offered the Standard Range model in 2019 for $35,000 ahead of the 2021 update. Electrek, the Model 3 is the only Tesla vehicle to have its federal tax credit reduced from $7,500 to $3,750 under new guidelines from the US Treasury Department regarding battery procurement requirements. The price of the Model 3 Performance remains unchanged at the time of writing.
Tesla also shaved $3,000 from the entire Model Y lineup, lowering the price of a Model Y AWD from $49,990 to $46,990. The Long Range model was reduced from $52,990 to $49,990 and Performance from $56,990 to $53,990.
The EV maker has regularly adjusted its vehicle prices in recent years, after making several increases across its range between 2021 and 2022. The company has repeatedly lowered its prices this year in an effort to boost sales in the face of a weakening economy and heightened competition from rival automakers. Tesla discounted Model Y and Model 3 vehicles in the US in January and again in February, and later slashed Model S and Model X prices in March.
The reduced prices appear to have worked – the company announced earlier this month that it had delivered more than 422,000 vehicles in the first quarter, surpassing Wall Street estimates of 420,000 units. Tesla’s cumulative price cuts have also given other EV makers something to think about Renault to review its own vehicle prices to stay competitive. That being said, analysts have warned that Tesla’s higher sales and lower prices may have negatively impacted overall profit margins ahead of a 20 percent drop in the company’s year-over-year profit.
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