Tesla’s Recent US Price Cuts Bring Model 3 Below $40,000.

(CTN News) – Tesla has, for the second time this month, lowered the price of its Model 3 and Model Y electric vehicles in the US, bringing the starting price of Tesla’s most affordable EV below $40,000 (before incentives are applied).

Tesla’s adjusted pricing was rolled out a short time before it is expected to release its quarterly earnings report later today, so the timing is perfect.

The standard range RWD price of the Model 3 has been reduced from $41,990 to $39,990. We have seen better prices for the EV than that, but it is not the lowest price we have seen for the EV – Tesla had previously offered the Standard Range model for $35,000 in 2019 before it updated its model in 2021.

In a report by Electrek, Tesla’s only vehicle that has been affected by a cut to its federal tax credit has been the Model 3 which, due to new guidance provided by the US Treasury regarding battery sourcing requirements, has seen its federal credit reduced from $7,500 to $3,750.

At the time of writing, the price for the Model 3 Performance has remained unchanged.

A Model Y AWD is also now available for $46,990, a price that Tesla says has been slashed by $3,000 off everything in the Model Y lineup.

This model was reduced from $52,990 to $49,990 for the Long Range model, and from $56,990 to $53,990 for the Performance model.

Since the EV producer has made several price changes across its entire range between 2021 and 2022, it has been regularly adjusting the price of its vehicles in recent years.

As a result of a weakening economy and increased competition from competing vehicle manufacturers, the company has repeatedly lowered its prices in an effort to boost sales over the past year.

It is worth mentioning that Tesla has reduced the pricing of its Model Y and Model 3 vehicles in the US in January and again in February, and has reduced the pricing of its Model S and Model X vehicles in March.

According to the company, the reduced pricing seems to have worked – it announced earlier this month that it had delivered over 422,000 vehicles in its first quarter, which exceeded Wall Street’s expectation of 420,000 units in that period.

As Tesla has accumulated price reductions over time, other electric vehicle makers, such as Renault, have also been forced to reevaluate their own vehicle pricing in order to remain competitive in the EV market.

As a result, analysts have warned that Tesla’s increasing sales and lower pricing may have negatively impacted the company’s overall profit margins, as they expect a 20 percent decline in the company’s earnings year-on-year as a result of higher sales and lower prices.

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