The Tesla Model 3 and Model Y just got more expensive overnight thanks to price hike

Tesla Model Y
(Image credit: Tesla)

Earlier this year, Tesla seemed to raise the prices on its vehicles almost daily, responding to what CEO Elon Musk said were supply chain issues. 

Price hikes stopped over the summer, but now it appears that Tesla has fallen back off the wagon, because overnight between October 5 and October 6, the automaker increased pricing on its most popular models.

Tesla's pricing updates pushed the cost of a Model 3 Standard Range Plus to $41,990 and the price of the Model 3 Performance to $57,990. 

Pricing for the Model 3 Long Range AWD stayed flat at $49,990. Similarly, the cheapest Model Y is now $2,000 more expensive and the performance model got a $1,000 bump.

New grant could help soften price hike

While Tesla cars purchased after December 31, 2019, are no longer eligible for government tax credits, a new federal EV incentive is expected by year's end. 

If that happens, buyers would be able to take advantage of up to $8,000 in credits or discounts, greatly softening the price of a new Tesla.

Price increases aside, Tesla delivered more cars than expected in the third quarter of 2021, putting it on pace to crush expectations for the year. 

That growth is driven by sales of the Model 3 and Model Y, so it's possible that the company recognizes popular models and wants to capitalize on the interest. 

Demand hasn't been Tesla's problem, so it's in the automaker's court to meet demand and continue to deliver vehicles.

For Tesla hopefuls, price increases can be discouraging, but it's important to look at the industry as a whole. Prices are climbing, and that's assuming you don't have to wait a year to get your new car. 

The Model Y is still cheaper than a comparable Ford Mustang Mach-E at this point, and while some versions of the car won't deliver until April 2022, some can be scheduled for as soon as next month.

Chris Teague
Freelance Contributor

After working in the technology and software industry for several years, Chris began writing as a way to help people outside of that world understand the sometimes very technical work that goes on behind the scenes. With a lifelong love of all things automotive, Chris turned his attention to writing new vehicle reviews, detailing industry trends, and breaking news. Along the way, he earned an MBA with a focus on data analysis that has helped him gain a strong understanding of why the auto industry’s biggest companies make the decisions they do.