Cheapest Model Y ever? Tesla starts selling Model Y RWD in US for $44k

Tesla has updated its US website to add a cheaper Model Y RWD with a base price of $43,990 which, after incentives, might make it the cheapest Model Y ever available in the US.

The new model “replaces” the Model Y AWD, previously the cheapest trim at a base price of $47,740, which was discontinued last month in a surprise move.

But this model is rear-wheel drive rather than all-wheel drive, so one fewer motor is a money-saver for those who don’t need two. It also seems to use a cheaper battery.

As a result, the new Model Y RWD starts at $43,990, $3,750 cheaper than the version discontinued last month. Plus, the model still qualifies for the $7,500 US Federal EV Tax Credit, which means a post-credit base price of $36,490.

The new model seems like it may be using Tesla’s cheaper Lithium-Iron-Phosphate (LFP) battery.

LFP batteries are cheaper and more durable than the more common Nickel-Manganese-Cobalt (NMC) cells, but have lower energy density and therefore less range for a given weight/volume of battery. They also have the benefit of using no cobalt, which is a conflict mineral.

The new “standard range” Model Y is listed as having a range of 260 miles, as opposed to the previous AWD “standard range” with a 279 mile range, which we think could be because of the switch to LFP batteries.

However, due to LFP’s greater durability, it is recommended that you can charge the battery to 100% every night, as opposed to the recommended 90% daily charge for NMC sells. So the range is sort of a wash except for occasional roadtrip purposes when the NMC car is charged to 100% (though thats really the only time large range numbers matter in the first place). Or, in cold climates, where LFP tends to do worse than NMC.

In addition, the new model has a 0-60 time of 6.6 seconds, as opposed to the 5.0 seconds of the previous Model Y AWD, and a 170kW peak charge rate, as compared to the 250kW charge rate of other Model Y trims. And one other difference: you can’t get the 7-seat configuration on the Model Y RWD.

The Model Y standard range with LFP battery has been available in China since 2021, and Tesla just updated it yesterday so that the base model has a 0-62mph time of 5.9 seconds as opposed to the previous 0-62mph time of 6.9 seconds (which would just about coincide with a 0-60 time of 6.6s).

So it’s a little strange that the “new” US model seems to be similar to the “old” China model, at least for the time being.

Tesla has also been selling an LFP Model Y in Canada since earlier this year.

Cheapest US Model Y ever?

This $36,490 post-incentive price is likely the cheapest price for the Tesla Model Y in the US yet.

Previously, Tesla had offered the Standard Range as low as $39,990, but at the time it did not qualify for the tax credit as Tesla’s credits under the previous law had run out. Plus, it only appeared on the site for orders for a couple weeks, showing up in early January 2021, then getting a price cut in February before being removed from the configurator a week later. It was supposedly still available “off menu” as a custom order for a while.

Needless to say, the situation with this car has been confusing.

So now – assuming these cars actually get made and delivered this time around – we might see some new Model Ys being bought for even under $30k, if the right buyer can take advantage of the right state or regional incentives on top of the federal tax credit.

But that might not last for long, as the Inflation Reduction Act specifies that the new EV tax credit requires that batteries be built outside of China – and Tesla’s LFP batteries currently are manufactured in China. So by the end of the year, we might see it lose access to the federal tax credit, or see that credit reduced, but we may not know that until the time comes.

Deliveries are set to begin in “Oct-Nov 2023” according to Tesla’s site, so there could be a lead time of up to 8 weeks for orders happening now.