Tesla once again reduced the price of the Model 3 in the U.S., this time by $250 to $47,490, for the Long Range AWD version.

That's a slight change compared to the $500 or $1,000 steps, which the company also often uses. The prices of the other Model 3 versions and models remain unchanged.

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Tesla Model 3's supply exceeds demand

In the first part of the year, the Tesla Model 3 lacked the $7,500 federal tax credit. This changed with the launch of the new Performance version. This week, the regular Long Range AWD version also qualified for the incentive. This might improve the supply-demand relationship for Tesla.

The $250 price cut comes on top of even bigger news that the 2024 Model 3 Long Range AWD version is qualified for the $7,500 federal tax credit. We reported about this earlier today after several Reddit users unofficially reported it.

Here is the fresh confirmation of the eligibility from fueleconomy.gov website:

This means that the Tesla Model 3 Long Range AWD is $7,750 less expensive for all who can take advantage of the incentive.

The entry-level RWD version is the only Tesla Model 3 version that still does not qualify for the incentive. Because the incentive might be factored into leasing, this way of acquiring the base RWD appears to be the only rational one for now.

Anyway, with the $7,500 federal tax credit, the Model 3 Long Range AWD starts at $41,630 (including obligatory fees). Before the $1,640 obligatory fees, the price would be $39,990, which probably explains why Tesla cut the price by $250—it wanted to get under $40,000.

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 $39,990 +$1,640 N/A $41,630
2024 Tesla Model 3 Long Range AWD 18-in $47,490 +$1,640 $7,500 $41,630
2024 Tesla Model 3 Long Range AWD 19-in $48,490 +$1,640 $7,500 $42,630
2024 Tesla Model 3 Performance LR AWD 20-in $54,990 +$1,640 $7,500 $49,130

* 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.

The Tesla Model 3 is one of the best-selling all-electric cars in the U.S., although demand has weakened and far exceeds supply. We assume the estimated delivery time for new orders is "June" for the entry-level RWD and Long Range AWD versions.

The situation is different for the top-of-the-line Performance. The latest version entered the market recently, qualifying for the $7,500 tax credit. The estimated delivery time is July-August (1-2 months).

The big question is whether Tesla will be able to attract more customers and increase Model 3 sales in the U.S. At least for now, the internal competition from the Tesla Model Y will weaken. The Model Y Long Range RWD starts at $44,990, or $39,130 after the fees and including the $7,500 incentive. The Model Y Long Range AWD version is $3,000 more expensive (effectively from $42,130) so just $500 behind the Model 3 Long Range AWD.

Tesla Model 3 Basic specs

Model Drive EPA
Range
0-60
mph
(sec)
Top
Speed
(mph)
2024 Tesla Model 3 RWD 18-in RWD 272 mi 5.8 125
2024 Tesla Model 3 RWD 19-in RWD 248 mi* 5.8 125
2024 Tesla Model 3 Long Range AWD 18-in AWD 342 mi 4.2 125
2024 Tesla Model 3 Long Range AWD 19-in AWD 305 mi* 4.2 125
2024 Tesla Model 3 Performance LR AWD 20-in AWD 303 mi* 2.9* 163

*Range according to Tesla's website; acceleration with rollout subtracted **Tesla's website says that the Long Range AWD 18-in has 341 miles of range, compared to 342 according to EPA's website

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