Tesla has once again lowered prices. As of Thursday the automaker’s online configurator shows price cuts for every model in its lineup.
The Model Y received the biggest cut, of about 20% across the lineup. Including the new, higher $1,390 destination fee, the base Model Y Long Range now starts at $54,380, while the Model Y Performance now starts at $58,380.
There might be a good reason for that deeper cut to the Model Y. Five-passenger versions of the Model Y qualify for the new clean-vehicle tax credit as passenger cars—meaning that buyers can claim $7,500 (likely through March) if the MSRP of the vehicle isn’t more than $55,000. With buyers again able to claim that credit, the effective price for many U.S. drivers of the Model Y will now slot below $47,000 after the tax credit has been applied.
With the Model Y’s starting price of $68,390 up to yesterday, that’s effectively more than a $20,000 price cut.
2022 Tesla lineup (Courtesy of Tesla, Inc.)
The Model 3 now starts at $45,380, while the base price of the Model 3 Performance is now listed at $55,380. Those are changes of 6% and 14% for the base and Performance specs, respectively, before destination charges.
This comes after Tesla issued discounts on the Model 3 and Model Y in December. The automaker initially offered a $3,750 discount, then doubled it to $7,500 for cars delivered from Dec. 21-31. That came after a series of Tesla price rises, including one in June that pushed the starting price of the Model Y past $67,000.
Tesla also cut the base price of the Model S by about 10% to $96,380. The Model S Plaid Performance variant now starts at $116,380, 15% lower than before, not counting destination. Model X prices were lowered by a similar amount, with the base Model X now starting at $109,990 and the Model X Plaid now starting at $119,990.
These price cuts help reverse years of price increases on Teslas, and come as the market for used Tesla vehicles softens. Used Teslas have generally held their value better than other electric cars, but a recent report found that prices were dropping fast. The average price of a used Tesla peaked in July 2022 at $67,297 but had dropped 17% by November 2022, compared to a 4% decrease for the overall used car market, the report found.
The cuts come after a record year for Tesla. According to an Automotive DriftBreath Data Center estimate, the brand sold 491,000 cars in the U.S. in 2022, making it the top selling luxury brand in the country. Tesla does not break out sales by country or region, but the estimate gave Tesla a lead of about 158,000 cars over BMW.
However, Tesla is also facing more competition in the electric car market, and many more brands are planning new electric vehicles moving forward.
