Tesla Model Y, Model 3 Price Cuts Continue: Feel The Pain

Tesla Model Y and Model 3 prices are at historically low levels. If you wanted to pick an opportune time to buy or lease a Tesla it might be now.

Pain: It’s easy to test this hypothesis. Ask a Model Y owner who bought their car a year or more ago and listen to the pain. (Check out a Reddit thread on this topic.) My neighbor who owns a 2021 Model Y said he loves his Model Y but doesn’t love the steep depreciation — more on that below.

Model Y: For new inventory vehicles, the Model Y rear-wheel drive, or RWD, now starts at about $34,400, which includes the $7,500 federal tax credit. That’s before taxes and fees. That’s less than a buyer once paid for a base Model 3. Opt for the Model Y Long Range AWD version, and the price starts at about $37,500, including the $7,500 credit, before taxes and fees. How much cheaper is this than previous years? My neighbor got his Model Y in August 2021 for $54,290 before taxes and fees. “Now the same spec’d Y is $51,990 but after tax credit is $44,490 almost 10k less than what I paid,” he told me.

Model 3: the key to an inexpensive Model 3 is to opt for a lease, which includes the $7,500 incentive distributed over the term of the lease. Going the lease route can also protect you from the hit you may get from depreciation. (Only Performance models get the $7,500 on purchase.) Leases on a Model 3 RWD start at $294 a month with $3,444 down, 36 months, and 10,000 miles/year before taxes and fees. Go with zero down and the lease comes to about $400. Again, that includes the $7,500 incentive distributed over the term of the lease.

What EV consumers want — much cheaper EVs: Among survey respondents who said they were considering an EV for their next vehicle purchase, 47% say they are seeking an EV purchase below $40,000, and 22% are interested in EVs priced below the $30,000 threshold, according to an Edmunds’ survey released at the end of March. This buyer sentiment is driving EV price-cutting across the U.S. And it’s not only Tesla. Cars such as Ford’s Mach-E and the Chevy Blazer EV have gotten the price slashing treatment.