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Tesla increases price of Model 3 as federal tax credit ends

Tesla has slightly increased the prices of Model 3’s two least expensive versions in the US — just weeks before the end of the tax credit on Tesla’s vehicles.

Over the last year, Tesla has been making a lot of price adjustments to the different Model 3 versions.

At first, Tesla reduced the price of Model 3 to compensate for the reduced federal tax credit in the US, but over the last few months, the automaker has reversed the trend, and it has been increasing the price of the Model 3.

Last month, Tesla announced a price increase for the Model 3 Dual Motor Long Range from $47,990 to $48,490.

Now Tesla is again increasing the price of this version of the Model 3 by $500, according to an updated of the online configurator today:

Tesla also increased the price of the Model 3 Standard Range Plus by $500.

Since the Model 3 Standard Range is not available on Tesla’s website and an “off-the-menu” item, the Model 3 Standard Range Plus is the cheapest Model 3 available to order.

These price increases are for new orders, which Tesla is not expected to deliver until next year.

We reported a few weeks ago about Tesla warning customers of the end of the federal tax credit, and that they would need to order now to get their new car by the end of the year.

The US federal government has a long-standing tax credit program for electric vehicle buyers to get up to $7,500 back when buying an EV.

Under the current structure, an automaker triggers a phase-out period after delivering its 200,000th electric vehicle in the US — resulting in the $7,500 tax credit being gradually reduced to nothing a little over a year.

Tesla was the first automaker to hit the 200,000th electric car delivery threshold in the US last year.

At the end of this year, the tax credit will disappear completely for Tesla buyers.

There are some efforts at the legislative level to change the tax credit structure, but they have been unsuccessful so far.

Electrek’s Take

That’s an interesting strategy.

The end of the federal tax credit means that all of Tesla’s vehicles are already going to be $1,875 more expensive, and now Tesla is adding $500 to that for the two most popular versions of its most popular car.

It appears to show that Tesla is not worried about demand in the US next year, despite the lack of the federal tax credit.

I can’t imagine that it won’t have an impact on demand, but it will be interesting to follow in the coming months.

For this quarter, it will not have an impact since Tesla is looking to deliver its inventory cars and previous orders at this point in the quarter.

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Avatar for Fred Lambert Fred Lambert

Fred is the Editor in Chief and Main Writer at Electrek.

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