The affordability of Tesla‘s Model Y is setting new standards in the electric vehicle market. Recently, I highlighted how the Model Y’s price point dipped below the US new car average, particularly when including the generous US EV tax credit. The development this week underscores Tesla’s commitment to cost-effective sustainable transportation, as the Model Y sees another price reduction.
Updated Pricing and Tax Incentives
Just last week, the starting price for the Model Y stood at $44,990, translating to $37,490 post-tax credit. Now, the price has been further slashed to $42,990, bringing it down to a remarkable $35,490 after applying the full $7,500 US EV tax credit. This pricing shift is both significant and strategic, signaling potential market dominance.
Model Y Long Range – More Power for Your Purchase
If you’re in the market for even more performance and range, the Model Y Long Range offers an attractive package. With over 50 additional miles of range and improved acceleration, going from 0–60 mph in a brisk 4.8 seconds, this model’s value is undeniable. Its new start price is $47,990—or $40,490 after the tax credit—bolstering the best of what Tesla offers.
Prospect of Increased Sales
The price drop is anticipated to significantly boost Model Y sales. Typically, even a modest reduction in price can widen the consumer pool, and with the Model Y at its lowest price ever, Tesla seems poised to capitalize on heightened demand. However, unpredictable pricing strategies mean this opportunity might be fleeting, leaving even myself contemplating a purchase.
Customization Costs
Unfortunately, the standard color, a dark grey, might not be everyone’s cup of tea. Preferring a white or blue body will add $1,000 to the cost, and opting for white seats—an almost necessity in warmer climates—also comes with a $1,000 premium. But considering the recent price drop, these upgrades feel like getting something extra without additional cost.
Model Y vs. Model 3 – The Competitive Landscape
Interestingly, the Model Y has significantly outsold the Model 3, with the last quarter showing a 3-to-1 ratio in favor of the former. But what about the Model 3’s pricing? It remains unchanged at $38,990 and doesn’t qualify for the EV tax credit. However, Tesla is promoting a competitive lease option starting at $299/month, offering an alternative path to Tesla ownership.
Both the Model Y and Model 3 are vying for consumer preference with their unique attributes. The Model Y offers substantial cargo space, a roomier back, and a higher ride profile. Meanwhile, the Model 3 has embraced refinements like rear infotainment, enhanced seating comfort, and dynamic sedan handling. The market currently leans towards the Model Y, but as the second quarter unfolds, we’ll see if this trend continues or shifts.
