Tesla Model Y Prices Return To Previous Level In March

Tesla Model Y and Universal Wall Connector

Elon Musk explains that the price changes aim to mitigate the seasonality of car buying.

The prices of the Tesla Model Y’s RWD and Long Range AWD versions increased by $1,000, returning to their previous level after a few weeks of a temporary reduction (between February 11 and February 29).

Since March 1, the U.S.’ most popular all-electric car model starts at $43,990 (RWD version) and $48,490 (Long Range AWD version), before obligatory fees and a $7,500 federal tax credit. When the fees and the incentive are deducted, the effective minimum cost is respectively $38,130 and $43,130.

The new Tesla Model Y prices:

• RWD: $43,990 (up $1,000 or 2.3% from $42,990)
• Long Range AWD: $48,490 (up $1,000 or 2.1% from $47,490)
• Performance: $52,490 (no change)

The $1,000 reduction on two out of three Tesla Model Y versions was temporary, as Tesla announced that the price would increase by $1,000 “or more” on March 1.

According to Tesla CEO Elon Musk, such a time-limited change was applied to attract more customers in a period when demand is lower because the factory is the most efficient at producing a constant volume of cars: “Since most people don’t love to buy cars in the middle of winter, Tesla is offering a $1000 incentive to do so. This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal.”

For us, it’s another direct sign that the company is actively changing prices to achieve an optimum balance between supply and demand.

Let’s recall that the estimated delivery of new Model Ys (all three versions) is March, which means that custom orders in the U.S. will be ready within weeks.

Additionally, we know that Tesla does not expect a high rate of growth in 2024. If there is any weakening in demand, we might even expect some new price reductions.

Tesla Model Y prices:

* Tesla adds a Destination fee (DST) of $1,390 and an Order Fee of $250 to all its models ($1,640 total).