Tesla drops prices again, with Model 3 and Model Y now discounted in the US

Tesla Model 3
(Image credit: Tesla)

We reported earlier this week that Tesla was busy dropping the prices of its Model Y in the USA, introducing a cheaper RWD model that would replace the dual-motor AWD model, scrimping on an electric motor to save you around $3,750.

However, Tesla is continuing its price cuts to both the Model Y and Model 3, leaving the latter at its lowest ticket price to date. 

Again, an update to the online configurator reveals that the Model Y Long Range and Model Y Performance are both now listed for $2,000 less than they were earlier this week.

Unfortunately, the slashing of the price hasn't effected the Model Y RWD we reported on earlier in the week, as this remains at $43,990. Still, it remains a veritable bargain in Tesla terms.

The Model 3 has also been discounted and now enters the fray as arguably the cheapest Tesla ever, as Musk continues to slash prices and reduce barrier to entry for new converts. 

The Model 3 Rear-wheel drive (RWD) and Long Range versions have both had $1,250 knocked off the price, and the Performance model boasts an enticing $2,250 off its original price tag.

This means customers can now buy membership to the Tesla club for as little as $38,990 for the RWD version of the Model 3. But if you add in state, local, or regional tax credits, as well as the $7,500 federal credit offered to potential EV customers, some buyers could pick up a Model 3 for under $30,000.

This isn’t the first time Tesla has dropped its prices to 'all-time' lows, as the Model 3 was briefly available for $35,000 in the now defunct Standard Range guise in 2018. But Tesla killed it off, citing the fact that more people were buying its Standard Plus model anyway. 

Analysis: Price cuts aren't always good news

Tesla Model 3

(Image credit: Tesla)

Call us old-fashioned (and we're bracing ourselves for a barrage of abuse), but Tesla's propensity for chopping and changing its pricing is at best confusing, and at worst bad for customer relations with the brand, especially when you consider the knock-on effect it can have on residual values. 

Wiping thousands of dollars off the list price on a whim not only annoys those who recently paid full price, but it also immediately devalues recently purchased vehicles on the second-hand market, especially for those who have opted for private ownership, as opposed to company car or fleet customers.

Speaking of annoyingly elusive, rumors picked up by Notebookcheck suggest that the long-awaited Model 3 Highland Performance model could be announced imminently and available sometime in mid-2024.

The rumors circulated when European customers who had placed orders for the outgoing Model 3 Performance model noticed their order estimates had been pushed back from November 2023 to June 2024, all the way to March 2024 to June 2024.

Of course, it shouldn’t be too late to update their orders to the refreshed, face-lifted Model 3 Highland, but surely anyone who receives delivery of the outdoing Model 3 Performance just before the refreshed version drops will feel more than a pang of jealousy?

There is still no word when the Performance version of the refreshed Model 3 – codenamed Highland – will arrive in the US, but could these price reductions be a preamble to an announcement? We'll have to wait and see.

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