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All Tesla models at a Supercharger

How Much Is a Tesla? All Models Just Got Prices Cut

The right move at the right time?

  • Teslas just got a whole lot cheaper.
  • The company recently (and quietly) lowered the prices on all its cars.
  • Is this the right move at the right time or an act of desperation?

Tesla has just cut prices of its cars across the board. The move to lower prices on all of its models comes as a response to reports of waning demand and inventory pileups. Tesla has cut prices in a big way for its U.S. models, and that brings some versions of the Model 3 and Model Y underneath the new EV price limits set by the Inflation Reduction Act. That means some Teslas are eligible for a $7,500 federal tax credit once more.

Some of the price cuts are massive, but the most important cuts are the ones Tesla issued to the Model 3 and Model Y. Side note: All of the before and after prices listed here don't feature the destination charge or the $250 order fee. The Model 3 dips from $46,990 to $43,990, while the Model 3 Performance is now priced at $53,990, way down from its previous price of $62,990. The Model Y sees similarly large cuts. The base Model Y will now cost $52,990, down from $65,900, and the Model Y Performance dips from $69,990 to $56,990.

Tesla Model 3 and Model Y exterior group shot

Prices for Tesla's less popular offerings, the Model S and Model X, are also down. The Model S gets a $10,000 price cut from $104,990 to $94,990 and the Plaid model is now a whopping $21,000 cheaper — $114,990 at the new price. The Model X, Tesla's least popular offering, now costs $109,990 in base form and $119,990 for the Plaid. While these price cuts will likely bolster sales for the near future, the IRS's new guidance on battery components and assembly is expected in March and could affect some Tesla models' eligibility for the $7,500 tax credit.

Another concern, according to financial experts, is how the price cuts will affect Tesla's profit margin. According to Yahoo Finance, Tesla's gross margin was 27.9% in the third quarter of 2022. The move will likely dig into that margin, but slashing prices is likely the right move long term. Will the cuts help spur demand and ward off some of Tesla's competition? It's likely, but that's only as long as these new prices stay where they are. Tesla is notorious for its fluctuating prices, and these new prices likely won't stay this way for long.

Edmunds says

Right now is probably the best time to buy a Tesla in a long, long time.