Tesla has cut prices on its electric vehicles for the sixth time this year, ahead of its next earnings report. It has quietly lowered the price of the Model 3, so that the rear-drive variant now starts at $39,990, or $2,000 less than buyers would pay for it as recently as earlier this month. If you’ll recall, the automaker already cut $1,000 off its price and started selling it for $41,990 the last time it implemented price cuts just a couple of weeks ago. And earlier this year, Tesla slashed its prices pretty drastically across its entire lineup, with some models getting as much as a 20 percent price drop.
However, as Tesla points out on its website, the rear-wheel-drive model now only qualifies for $3,750 in tax credits after the government’s change in guidelines went into effect on April 18. The new rules are related to the fact that the US excludes China as an approved trading partner, which would lead to electric vehicles using Chinese-made batteries losing tax credits as a result. To note, Tesla’s other cars are still eligible for the full $7,500 tax credits, including Model Y vehicles that also got a price cut.
Base, Long Range and Performance Model Y vehicles are now $3,000 less than before. The base Model Y will now cost buyers $46,990, while the Range and Performance vehicles now cost $49,990 and $53,990, respectively. When Tesla reported its 2022 earnings in January this year, Elon Musk said the company was receiving orders “almost double the production rate.” According BloombergHowever, Tesla was unable to maintain that demand rate and made the fewest deliveries in the first quarter of this year since 2021. Since the company reportedly produced thousands more vehicles than it delivered to customers, these price cuts were probably implemented to sell existing inventory and increase demand in the future.