In a rare move, Tesla discounted its vehicles by thousands of dollars at the end of last year, but it appears the automaker has now made price cuts permanent. The Model 3 and Model Y both got significant price cuts in the United States, with some seeing up to a 20 percent decrease.
Tesla comfortably sold more than one million vehicles in 2022, and the Model Y made its way into the top-ten best-selling vehicles last year. Both figures are impressive, but the automaker still missed analysts’ estimates, so the price-slashing measures could be one way to spark demand among skeptical buyers.
The Model 3 RWD got a $3,000 price cut, bringing its starting MSRP to $43,990. The Model 3 Performance got a $9,000 cut to $53,990. Tesla cut Model Y prices even more aggressively, with the Long Range model seeing a 20 percent drop to $52,990 and the Performance model dropping by 19 percent to $56,990. The Long Range model’s price drop makes it eligible for a $7,500 federal tax credit.
Tesla’s flagship vehicles also got cuts, with the Model S dropping $10,000 to $94,990 and the Model S Plaid dropping a massive $21,000 to $135,990. The Model X’s base price dropped by $11,000 to $109,990, and the Plaid model saw a $19,000 cut to $119,990.
Used Tesla prices have also fallen and were down nearly 20 percent at the end of last year. That has shifted the dynamic of a used market where many flipped lightly-used Tesla vehicles for a significant profit. The cars also sit on dealers’ lots longer, up to 50 days on average.
Price cuts are a great thing if you’re shopping for a Tesla, but it’s important to remember that the automaker has been raising prices for a couple of years. So, while prices look more attractive after the cuts, they’re only a step in the right direction.
