Tesla’s latest move is a stark reversal of its pricing strategy throughout 2021 and 2022.
Discounting continues as the electric automaker cuts its prices in key markets by as much as 20%. Tesla faces headwinds going into the new year, as it missed analysts’ delivery estimates and saw its stock prices tumble by more than half throughout the last three months of 2022. The company’s market cap has fallen 68% (or $845 billion) from its November 2021 peak.
Especially as more rivals enter the market, Reuters notes today’s decision could entice more folks to shop one of Tesla’s cars instead, since prospective buyers may no longer be priced out of the market.
Here’s how much lower prices are today
Starting at the higher end of Tesla’s price band, the Model S and Model X now start at $94,990 and $109,990 respectively. That amounts to a $10,000 price cut, not to mention the first time the Model S has been under six figures for a long while. If you step up to the Plaid models, you’ll be looking at a $114,990 or $119,990 price tag for the Model S and Model X, respectively.
At the other end of the range, the Model 3 sedan gets a more modest $3,000 (or about 6%) shave off its entry-level price. The rear-wheel drive, 272-mile capable Model 3 now comes in at $43,990, while the Performance tops out at $53,990. At time of writing, the Model 3 Long Range is unavailable through the configurator — the website instead directs you to existing local inventory, which lands around $50,990.
The biggest cut of all, though, comes with the Tesla Model Y. Pricing for the Long Range model dropped $13,000 or 20%, down to $52,990 from $65,990. The Model Y Performance, for its part, now starts off at $56,990, down from $69,990.
Tesla similarly dropped its prices in several European markets and in China — a move that recently sparked outrage, as Chinese customers who recently bought Teslas did not see such discounts. In China, where the automaker cut prices last week, owners protested distribution centers and demanded compensation for buying before the cuts took effect.
U.S. buyers face a similar dilemma, as some bought in when the company discounted models in December. Now, yet another price cut feels like “a punch in the gut”, as Seattle owner Greg Woodfill told Reuters.
And you can get the $7,500 credit on the Model 3/Y
In January, new rules concerning the revamped EV tax credit under the Inflation Reduction Act took effect. It removed the manufacturing cap for vehicles that were previously excluded from the $7,500 tax credit, but introduced a few new stipulations. To qualify, cars must have undergone final assembly in North America (Tesla checks that box for cars it sells here), and not exceed a set MSRP: $80,000 for vans, SUVs and trucks, and $55,000 for passenger cars.
The IRS posts official guidance on which vehicles qualify for the subsidy here.
Will more buyers take the substantial money Tesla’s putting on the hood and buy in? We’ll have to wait for the Q1 2023 delivery results to see what happens.