After continuously rising costs over the previous couple of years, Tesla has lowered them dramatically throughout its lineup in the US and Europe, in an apparent move to increase sales. The least cost EV, the Model 3 RWD, has gone from $46,990 to $43,990, while the 5-seat Model Y Long Range plunged 20 percent from $65,990 to $52,990. That implies the later model now qualifies for the $7,500 US Federal Tax credit, therefore the total price cut will be $20,500 – almost 30 percent.
Tesla dramatically lowers EV pricing in the US and Europe
All other models, including the Model S and Model X (both regular and plaid versions) and the performance versions of the Model 3 and Model Y experienced price drops. However, the 7-seat option on the Model Y has increased in price by $1,000 to $4,000. While that brings the price over $55,000, it still qualifies for the Tax Credit as it's regarded to be an SUV. In Germany, Model 3 and Y prices were slashed by one to 17 percent, and also dropped in Austria, Switzerland and France.
To earn the full $7,500 rebate, users will have to order by mid-March, when it's projected to be lowered to half that. The tax credits apply to SUVs priced below $80,000 and cars under $55,000. The Model Y slipped into both categories, depending on the amount of seats, meaning certain 5-seat cars weren't eligible – something CEO Elon Musk called "messed up." Now, all Model Y EVs except the Performance variant appear to qualify.
Late last year, it was claimed that Tesla inventory was piling up after years of high sales, first with reports in China, then the US. Tesla recently lowered pricing in China, then afterwards rejected any compensation to customers who complained. The Model 3 now starts at 229,900 yuan ($33,425) in that nation.
Neither Tesla nor CEO Elon Musk have spoken publicly on the price decreases, but potential customers will no doubt be thrilled (and recent purchases displeased) (and recent purchasers displeased). The Model 3 was originally scheduled to cost $35,000 and shipped in that configuration for a short period, but witnessed gradual hikes to the $46,990 price revealed in March 2022. Last month, Musk warned that "dramatic interest rate swings" have harmed vehicle affordability and that Tesla may potentially decrease pricing.
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