Tesla Model Y Prices Return To Previous Level In March
Elon Musk explains that the price changes aim to mitigate the seasonality of car buying.
The prices of the Tesla Model Y's RWD and Long Range AWD versions increased by $1,000, returning to their previous level after a few weeks of a temporary reduction (between February 11 and February 29).
Since March 1, the U.S.' most popular all-electric car model starts at $43,990 (RWD version) and $48,490 (Long Range AWD version), before obligatory fees and a $7,500 federal tax credit. When the fees and the incentive are deducted, the effective minimum cost is respectively $38,130 and $43,130.
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Competitive pricing is the key
Tesla is known for active and relatively frequent changes in its pricing, especially when there is an imbalance between supply and demand. One of the reasons behind that is the lack of a middleman (dealers), which usually would apply rebates (or increases) to the MSRP.
The new Tesla Model Y prices:
- RWD: $43,990 (up $1,000 or 2.3% from $42,990)
- Long Range AWD: $48,490 (up $1,000 or 2.1% from $47,490)
- Performance: $52,490 (no change)
The $1,000 reduction on two out of three Tesla Model Y versions was temporary, as Tesla announced that the price would increase by $1,000 "or more" on March 1.
According to Tesla CEO Elon Musk, such a time-limited change was applied to attract more customers in a period when demand is lower because the factory is the most efficient at producing a constant volume of cars: "Since most people don’t love to buy cars in the middle of winter, Tesla is offering a $1000 incentive to do so. This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal."
For us, it's another direct sign that the company is actively changing prices to achieve an optimum balance between supply and demand.
Let's recall that the estimated delivery of new Model Ys (all three versions) is March, which means that custom orders in the U.S. will be ready within weeks.
Additionally, we know that Tesla does not expect a high rate of growth in 2024. If there is any weakening in demand, we might even expect some new price reductions.
Tesla Model Y prices:
| Model | Base Price | Dest. Charge | Tax Credit | Effective Price |
| 2024 Tesla Model Y RWD 19-in | $43,990 | +$1,640 | $7,500 | $38,130 |
| 2024 Tesla Model Y RWD 20-in | $45,990 | +$1,640 | $7,500 | $40,130 |
| 2024 Tesla Model Y Long Range AWD 19-in | $48,990 | +$1,640 | $7,500 | $43,130 |
| 2024 Tesla Model Y Long Range AWD 20-in | $50,990 | +$1,640 | $7,500 | $45,130 |
| 2024 Tesla Model Y Perf. LR AWD 21-in | $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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