Tesla Model 3 And Model Y Prices Cut Again By Up To $2,250

The entry-level Model 3 now starts at $38,990.

Tesla Model Y and Universal Wall Connector

Mark Kane

By: Mark Kane

Oct 6, 2023 at 1:23pm ET

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Tesla just lowered the prices of some of its electric cars in the United States by a noticeable amount, thus improving affordability and competitiveness.

The latest round concerns all versions of the Tesla Model 3, as well as the Long Range AWD and Performance versions of the Tesla Model Y. The entry-level Model Y RWD, which was introduced just a few days ago, maintains its price.

Let's start with the Model 3. The price of the base, RWD version is now $38,990, which is $1,250 or 3.1 percent less than before. After deducting the obligatory cost of $1,640 (destination and order fee), as well as the available $7,500 federal tax credit, the effective minimum cost is $33,130. That price can additionally be lowered by a referral link promotion ($250) and some state incentives.

The Model 3 Long Range AWD also is now $1,250 less expensive and starts at $45,990, while the Performance version received a more significant $2,250 cut (now $50,990).

We are not surprised by the Model 3 price reductions because the newly introduced Model Y RWD ($43,990) appeared to be too close to the entry-level Model 3 RWD, sparking some internal competition.

Speaking of the Model Y, both Long Range versions (AWD and Performance) are now $2,000 less expensive, starting at respectively $48,490 and $52,490.

Prices (*without DST and Order Fee): October 6, 2023

Tesla Model 3:

RWD: $38,990 (down $1,250 or 3.1% from $40,240)
Long Range AWD: $45,990 (down $1,250 or 2.6% from $47,240)
Performance: $50,990 (down $2,250 or 4.2% from $53,240)

Tesla Model Y:

RWD: $43,990 (no change)
Long Range AWD: $48,490 (down $2,000 or 4.0% from $50,490)
Performance: $52,490 (down $2,000 or 3.7% from $54,490)

Well, the year 2023 will be remembered as the year when Tesla applied multiple price reductions, significantly improving the affordability of several of its cars. Those changes are amplified by the reestablished eligibility for the federal tax credit (in January) and some generous state incentives.

We are eager to see Tesla's Q3 financial report and how all this will impact the company's margins.

Prices

Model Base Price Dest. Charge Tax Credit Effective Price 2023 Tesla Model 3 RWD 18-inch $38,990 +$1,640 $7,500 $33,130 2023 Tesla Model 3 RWD 19-inch $40,490 +$1,640 $7,500 $34,630 2023 Tesla Model 3 Long Range AWD 18-inch $45,990 +$1,640 $7,500 $40,130 2023 Tesla Model 3 Long Range AWD 19-inch $47,490 +$1,640 $7,500 $41,630 2023 Tesla Model 3 Perf. LR AWD 20-inch $50,990 +$1,640 $7,500 $45,130 2023 Tesla Model Y RWD 19-inch $43,990 +$1,640 $7,500 $38,130 2023 Tesla Model Y RWD 20-inch $45,990 +$1,640 $7,500 $40,130 2023 Tesla Model Y Long Range AWD 19-inch $48,490 +$1,640 $7,500 $42,630 2023 Tesla Model Y Long Range AWD 20-inch $50,490 +$1,640 $7,500 $44,630 2023 Tesla Model Y Perf. LR AWD 21-inch $52,490 +$1,640 $7,500 $46,630

* Tesla adds a Destination fee (DST) of $1,390 and an Order Fee of $250 to all its models ($1,640 total).

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Just for your convenience, here are the specs for all the Model 3 and Model Y versions that are available today in the US.

Basic specs

Model Drive EPA
Range 0-60
mph
(sec) Top
Speed 2023 Tesla Model 3 RWD 18-inch RWD 272 mi 5.8 140 mph 2023 Tesla Model 3 RWD 19-inch RWD 267 mi* 5.8 140 mph 2023 Tesla Model 3 Long Range AWD 18-inch AWD 333 mi* 4.2 145 mph 2023 Tesla Model 3 Long Range AWD 19-inch AWD 315 mi* 4.2 145 mph 2023 Tesla Model 3 Perf. LR AWD 20-inch AWD 315 mi 3.1* 162 mph 2023 Tesla Model Y RWD 19-inch RWD 260 mi* 6.6 135 mph 2023 Tesla Model Y RWD 20-inch RWD 242 mi* 6.6 135 mph 2023 Tesla Model Y Long Range AWD 19-inch AWD 330 mi 4.8 135 mph 2023 Tesla Model Y Long Range AWD 20-inch AWD 318 mi* 4.8 135 mph 2023 Tesla Model Y Perf. LR AWD 21-inch AWD 303 mi 3.5* 155 mph

* estimated/unofficial values, according to the manufacturer; acceleration time with subtracted rollout