On January 12, 2022, Tesla reduced prices on Model 3 and Y along with S, X on the US order form at tesla.com. The Model 3 RWD Standard Range dropped from $46,990 to $43,990. The 5-seat Model Y Long Range, was $65,990 and is reduced to $52,990. On top of this discount, if customer’s income is within the EV Credit limit, both of these cars qualifies for $7,500 Federal Tax credit until March 2023. Applying the $7,500 credit, the 5-seat Model Y costs $45,490 and the Model 3 RWD Standard Range costs $36,490 for customers within the income limit. From tesla.com website, the income guidelines for EV Credit is listed below and is subject to change after March.
Adjusted Gross Income Limitations
- $300,000 for married couples filing jointly
- $225,000 for heads of households
- $150,000 for all other filers
The price changes will make Tesla Model 3 and Y very competitively price and affordable. It helps offset higher costs resulting from higher interest rates.
According to Kelly Blue Book’s website kbb.com, The average new car sold luxury and non-luxury in November costs $48,681 and that is a record. With Tesla’s price reductions and if $7500 applies, Tesla Model 3 and Model Y at $36,490 and $45,490 are both priced below that average vehicle price gas or electric. Kelly Blue Book’s average price for luxury car is $67,050 also a record and for non-luxury, the average is $44,584. Kelly Blue Book cites shortage of available new cars as a reason for the record prices. As availability and supply chain ease, average prices should decline. Tesla’s Austin factory is ramping up and supply should not be an issue for Tesla. Raw material price may also be dropping and help enable the price reduction. Tesla may also be reducing their profit margin with the price cut. Elon Musk had said he prefer to increase unit sold and sacrifice profits rather than keep prices high at a recent Twitter Space meetup in December.
https://www.kbb.com/car-news/average-new-car-price-sets-record/