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More Tesla Price Drops In October

By
Laurance Yap
October 20, 2023
3
min
Hot on the heels of introducing a new entry-level Model Y with rear-wheel drive, Tesla has dropped prices across the board for the Model 3 sedan and Model Y SUV. Eligible for the $7,500 federal tax rebate, they are even better value than before.
Back view of Tesla Model Y driving on the road
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Reductions of Up to $2,250 on Tesla

In the last year or two, Tesla, the dominant player in the electric car space, has become infamous for adjusting prices for its vehicles, seemingly at random. When demand was high, prices went up; but as the EV market slowed earlier this year, Tesla rapidly dropped prices to keep the metal moving and hit its quarterly delivery targets. This October, after introducing a new entry-level Model Y RWD, the company has once again dropped prices of its mainstream models, the Model 3 sedan and Model Y SUV.

Red tesla model 3

Tesla Model 3: Price Reductions

The Model 3 sedan, Tesla’s least expensive model, has gotten more affordable by about 3 percent. Starting MSRP for the rear-wheel drive entry-level model is now $38,990, while the Model 3 Long Range AWD model is now $45,990. That’s a reduction of $1,250. The Model 3 Performance, which features more powerful motors and all-wheel drive, now has a starting MSRP of $50,990 – a $2,250 drop.

The full Tesla Model 3 lineup is as follows:

  • 2023 Tesla Model 3 RWD with 18-inch wheels: $38,990 starting MSRP
  • 2023 Tesla Model 3 RWD with 19-inch wheels: $40,990 starting MSRP
  • 2023 Tesla Model 3 Long Range AWD with 18-inch wheels: $45,990 starting MSRP
  • 2023 Tesla Model 3 Long Range AWD with 19-inch wheels: $47,490 starting MSRP
  • 2023 Tesla Model 3 Performance AWD with 20-inch wheels: $50,990 starting MSRP

All current versions of the Model 3 are eligible for the $7,500 federal tax credit, but keep in mind that there is a obligatory $1,640 to pay in destination and ordering fees. It’s also worth noting that these lowered prices are for the current-generation Model 3, which is still being made in the U.S. – and not the refreshed model that has been introduced in Europe and Asia. The updated Model 3 has sleeker looks as well as even better efficiency and range.

The 2023 Model 3 has an EPA-estimated range of 272 miles for the rear-wheel drive model with 18-inch wheels; 333 miles for the Long Range model with 18-inch wheels; and 315 miles for the performance model with 20-inch wheels.

Tesla Model Y in a forest

Tesla Model Y Lineup

Currently the best-selling car in the entire world, prices for the Tesla Model Y have also been adjusted. The recently-introduced rear-wheel drive model is unchanged at a starting MSRP of $43,990, while the Long Range AWD model has dropped by $2,000, to a starting MSRP of $48,490. The Performance model has also been reduced by $2,000, to $54,290 MSRP.

  • 2023 Tesla Model Y RWD with 19-inch wheels: $43,990 starting MSRP
  • 2023 Tesla Model Y RWD with 20-inch wheels: $45,990 starting MSRP
  • 2023 Tesla Model Y Long Range AWD with 19-inch wheels: $48,490 starting MSRP
  • 2023 Tesla Model Y Long Range AWD with 20-inch wheels: $50,490 starting MSRP
  • 2023 Tesla Model Y Performance AWD with 21-inch wheels: $52,490 starting MSRP

The 2023 Model Y has an EPA-estimated range of 260 miles for the rear-wheel drive model with 19-inch wheels; 330 miles for the Long Range model with 19-inch wheels; and 303 miles for the performance model with 21-inch wheels.

With the latest round of price drops, we expect that Tesla will continue to be the dominant electric vehicle seller in the U.S.; with the tax incentive factored in, a Model 3 or Model Y is now well under $40,000 – and far less than the average transition price of a new vehicle in the U.S. It will be interesting to see when 2023 model year inventory is exhausted and the refreshed Model 3 is introduced.

Front view of a Tesla Model 3 driving through canyon roads

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