The Tesla Model Y Is Now Cheaper Than Ever

Will this move boost sales to a point to balance supply with demand?

from left: Tesla Model Y and Tesla Model S

Mark Kane

By: Mark Kane

Apr 20, 2024 at 6:20pm ET

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Just a few weeks into the second quarter of 2024, Tesla has decided to reduce the prices of three of its electric cars—Model S, Model X and Model Y—by $2,000 in the U.S. It now brings the Model Y alone to its lowest price ever.

The latest price change comes after a difficult first quarter when Tesla's EV production and deliveries decreased year-over-year. This led to a noticeable increase in the number of cars produced, but not sold.

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Tesla Model Y become more affordable

The Tesla Model Y is the U.S.'s most popular all-electric car model. Due to the latest price reduction, the entry-level RWD version starts effectively at $37,130 ($42,990 plus $1,640 in obligatory fees and after the $7,500 tax credit).

The Tesla Model S starts now at $72,990 (plus $1,640 in obligatory fees for a total of $74,630), which is 2.7% less than before.

In the case of the Tesla Model X, the change of $2,000 means up to a 2.5% cut (depending on the version). The base Model X starts at $77,990 (plus fees) and is qualified for the $7,500 federal tax credit (only version under $80,000).

Finally, the Tesla Model Y. With a $2,000 cut, it now starts at an MSRP of $42,990, almost 4.7% less than before. Let's recall that Tesla Model Y's prices fluctuate a lot compared to other models and were increased on April 1 by $1,000, after a temporary reduction. This is Tesla's most important model, responsible for the majority of the company's EV sales. With the $7,500 tax credit included (available for all versions), the Model Y effectively starts at $37,130.

The Tesla Model 3 maintained its prices (the ramp-up of the refreshed version is slower than anticipated and demand is not an issue). The all-new Tesla Cybertruck is also unaffected.

Tesla electric car prices

Model Base Price Dest. Charge Tax Credit Effective Price 2024 Tesla Model 3 RWD 18-in $38,990 +$1,640 N/A $40,630 2024 Tesla Model 3 RWD 19-in $40,490 +$1,640 N/A $42,130 2024 Tesla Model 3 Long Range AWD 18-in $47,740 +$1,640 N/A $49,380 2024 Tesla Model 3 Long Range AWD 19-in $49,240 +$1,640 N/A $50,880 2024 Tesla Model S LR AWD 19-in $72,990 +$1,640 N/A $74,630 2024 Tesla Model S LR AWD 21-in $77,490 +$1,640 N/A $79,130 2024 Tesla Model S Plaid 19-in $87,990 +$1,640 N/A $89,630 2024 Tesla Model S Plaid 21-in $92,490 +$1,640 N/A $94,130 2024 Tesla Model X LR AWD 20-in $77,990 +$1,640 $7,500 $72,130 2024 Tesla Model X LR AWD 22-in $83,490 +$1,640 N/A $85,130 2024 Tesla Model X Plaid (6 seat) 20-in $92,990 +$1,640 N/A $94,630 2024 Tesla Model X Plaid (6 seat) 22-in $98,490 +$1,640 N/A $100,130 2024 Tesla Model Y RWD 19-in $42,990 +$1,640 $7,500 $37,130 2024 Tesla Model Y RWD 20-in $44,990 +$1,640 $7,500 $39,130 2024 Tesla Model Y Long Range AWD 19-in $47,990 +$1,640 $7,500 $42,130 2024 Tesla Model Y Long Range AWD 20-in $49,990 +$1,640 $7,500 $44,130 2024 Tesla Model Y Perf. LR AWD 21-in $51,490 +$1,640 $7,500 $45,630

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

* The $7,500 federal tax credit might be available through leasing to all models and versions.*

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Comments

Only time will tell whether the recent price reduction for new custom orders in the U.S. will help to attract more customers and boost sales. In recent months, Tesla has been running a separate set of actions related to existing inventory with substantial rebates.

One thing appears to be certain. The initial Q2 order inflow and sales might not be as strong as the company hoped for and the price reduction was necessary to keep the factories busy. These price cuts will put additional pressure on other EV manufacturers.

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