Tesla has reduced the price of the Model Y starting price below $50,000, and it has updated the Performance version.
As a surprise move today, Tesla is reducing the price of the Model Y, the automaker’s latest vehicle by $3,000 — a significant price drop for a vehicle that came to market only a few months ago.
Since its launch, Model Y has only been offered in two versions: Long Range Dual Motor AWD and Performance.
However, the Performance version was available with or without a “Performance Package” that adds several features:
- Increased top speed from 145mph to 155mph
- 21’’ Überturbine Wheels
- Performance Brakes
- Lowered suspension
- Aluminum alloy pedals
With the update today, Tesla is now making the package standard on Model Y Performance orders — now starting just below $60,000:
This new configuration is in line with what Tesla did with the Model 3 Performance version.
For the base version, the Model Y Long Range Dual Motor, Tesla is reducing the price to $49,990.
It’s a $3,000 price drop from the $52,990 price that the base version of the electric SUV had since its launch in March.
Now the same version of the Model 3 is only $3,000 less expensive than the Model Y, which was originally supposed to be about $5,000 more expensive than the smaller Model 3 depending on the configuration.
Last quarter, Tesla also decreased Model 3 prices across the lineup.
The automaker didn’t explain why it was reducing the price of its new electric SUV today.
Again, this shows why as a consumer you shouldn’t buy the early production of a new Tesla vehicle.
Not only are you likely to have more quality issues early in the production ramp, but Tesla has also started a pattern of reducing the price after having worked through its backlog of pre-orders and starting to improve cost with higher volume production.
To be fair, you can see a similar pattern with other automakers using the dealer model.
Dealers will take advantage of a new vehicle launch to charge premiums. We saw some dealerships trying to do that with the Mustang Mach-E.
But Tesla is trying to be better than the dealer model and have more consistent prices by owning the entire distribution system.
At the end of the day, it’s good that the Model Y is cheaper since it’s going to be accessible to more people.
However, launching the RWD Standard Range Plus version would have a much greater impact than reducing the price of the Long Range AWD version.
Instead, this move just slashed the value of all early Model Y cars whose buyers have placed a deposit on for a year.
Tesla is going to have to increase the price of FSD by a lot more in order to stay true to Elon’s claim that Tesla vehicles are now appreciating assets.
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