If you’re in the market for a new Tesla, now may be the time to pull the trigger.
In a somewhat shocking, unannounced move, Tesla reduced prices on its entire model lineup, with some models taking a dramatic cut of more than 20%. Every single model has seen thousands of dollars fall off the MSRP.
The Model Y has taken the most significant cuts. Now, the Model Y can be had for $52,990, down from the $65,990 price of earlier this week; a price cut of $13,000. The Model Y performance is now $56,990, down from the $69,990 just a few days ago. The Model 3’s price cuts are less dramatic, with a $3,000 cut on the base Model 3, going from $46,990 to $43,990. The Model 3 Performance receives a $9,000 price cut, dropping down to $53,990. The price cuts also affect the Model S and Model X, with the Model S Plaid receiving $21,000 price cut; or a whopping 21% price reduction.
Some speculate that the price cuts are twofold, meant to address reportedly softening demand for Tesla vehicles, but also ensure Tesla models are eligible for new EV tax credits. Under the U.S. Inflation Reduction Act, a price cap was introduced for EVs. Plug-in cars can’t surpass a price ceiling of $55,000, but plug-in SUVs, trucks, and vans have a higher price ceiling of $80,000. According to the IRS, the Model Y only qualifies for the higher incentives in 7-seat form, the 5-seat Model Y is classified as a car, and subject to the $55,000 price cap. Now, all trims of the Model 3 qualify for tax incentives, as do at least the non-Performance trim of the Model Y. However, the Model Y Performance’s $56,990 base price is still too high to qualify for tax incentives.
Remarkably, no price cuts have made their way to Canada. Canadian Model Ys start at $69,990 CAD, and have been about that price since 2021. Deliveries for the new, cheaper Teslas have been estimated to come between January and March of this year.
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