After continuously raising costs in recent years, Tesla has substantially reduced them throughout its spectrum in the United States and Europe in an apparent attempt to increase sales. The Model 3 RWD has gone from $46,990 to $43,990, while the 5-seat Model Y Long Range has reduced 20% from $65,990 to $52,990. That means the latter model now qualifies for the $7,500 US Federal Tax Credit, resulting in a final price reduction of $20,500 – a savings of more than 30%.
All other variants, including the Model S and Model X (both standard and plaid versions), as well as the Model 3 and Model Y performance versions, experienced price reductions. The Model Y’s 7-seat variant, on the other hand, has raised in price by $1,000 to $4,000. While this raises the price over $55,000, it still qualifies for the Tax Credit since it is classified as an SUV. Model 3 and Y prices were reduced by one to seventeen per cent in Germany, and were also reduced in Austria, Switzerland, and France.
Customers must buy by mid-March to obtain the full $7,500 refund, which is projected to be cut to half that amount. The tax breaks are available for SUVs under $80,000 and cars under $55,000. The Model Y fell into both categories depending on the number of seats, which meant that some 5-seat vehicles were ineligible, which CEO Elon Musk described as “messed up.” Except for the Performance model, it seems that all Model Y EVs now qualify.
Late last year, it was reported that Tesla’s inventory was increasing following years of strong sales, first in China, then in the United States. Tesla recently reduced pricing in China, but afterwards refused to compensate consumers who protested. In China, the Model 3 now begins at 229,900 yuan ($33,425).
Tesla and CEO Elon Musk have not commented on the price decreases, but prospective customers will undoubtedly be thrilled (and recent purchasers displeased). The Model 3 was meant to cost $35,000 and was supplied in that configuration for a short time, but the price gradually increased to the $46,990 revealed in March 2022. Musk said last month that “dramatic interest rate swings” have impacted car affordability and that Tesla may decrease costs.
