Tesla Applies Massive Discounts in the U.S. and Canada, Model Y Now $13,000 Cheaper

Tesla’s U.S. and Canadian prospective customers can now rejoice – the manufacturer’s cars are back to 2021 price levels. The company applied a couple of very generous discounts. The Model Y crossover SUV received the biggest price drop.
Updated Tesla Model Y U.S. Pricing 10 photos
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“I’ll have to pretend I’m not seeing this. I’m just moving on with my life,” says a Tesla customer who took delivery of a brand-new Model Y in December of last year. That’s when the automaker started the month with a $3,750 discount for inventory models.

Then, just three weeks later and three days before Christmas, the price cut reached the $7,500 level and the company doubled down with 10,000 miles of Supercharging. The latter added around $1,700 to the discounted price, considering it redeems at a rate of approximately 2.5 miles per kWh. This also tells us that buyers receive 400 kWh of free fast charging for every 1,000 miles.

But on Thursday, the EV maker changed everything for North American and European markets. It introduced a new pricing policy. At the time of writing, Tesla has the following discounts set in place for the U.S. market:
  • $3,000 for the Model 3 Rear-Wheel Drive (was $46,990, now is $43,990);
  • $9,000 for the Model 3 Performance (was $62,990, now is $53,990);
  • $13,000 for the Model Y Long Range (was $65,990, now is $52,990);
  • $13,000 for the Model Y Performance (was $69,000, now is $56,990);
  • $10,000 for the Model S Dual Motor (was $104,990, now is $94,990);
  • $21,000 for the Model S Plaid (was $135,990, now is $114,990);
  • $11,000 for the Model X Dual Motor (was $120,990, now is $109,990);
  • $19,000 for the Model X Plaid (was $138,990, now is $119,990).

The good news about all these new discounts available right now in the U.S. is that the five-seater Model Y Long Range qualifies for the updated EV tax credit since it has a purchase price of less than $55,000. Customers can even pick an optional paintjob and the tow hitch without worrying about losing the federal incentive.

At the same time, one of the fastest production vehicles in the world – the tri-motor Model S Plaid – is now at a very attractive price point.

Unfortunately, the Model X Dual Motor is still very expensive and cannot qualify for the updated EV tax credit which sets the MSRP limit for clean SUVs, vans, and pickup trucks at $80,000.

Tesla’s price cuts make the company’s vehicles very attractive, but might upset existing customers who do not get to enjoy these updated price reductions and federal subsidies. This combination, for example, can bring a total discount of over 30% for eligible buyers.

But the situation differs for those who bought a Tesla thinking it will go up in value even if it adds miles on the odometer. The anomaly that plagued the used car market last summer has now ended after major names like Carvana have reported major losses as things started to slow down. With the recently introduced discounts available for brand-new cars, used Tesla vehicles will also have to have their prices lowered. So, this move will have a ripple effect very soon.

Before giving U.S. and Canadian customers the new discounted pricing, Tesla applied price cuts in China, Australia, and other Asian nations like Japan or South Korea. Some thought the carmaker won’t do the same in North America, but the new pricing policy proves Tesla does want to remain competitive.

The automaker has also applied new discounts in Canada and Europe where thousands of dollars or euros have been shaved off from the purchase prices bringing them back to early 2021 levels. For example, a Model Y Long Range now costs CAD69,990 (USD52,520) in Canada, while in Germany it has a starting price of €54,990 (USD59,713, CAD79,596). European customers get the short end of the stick but they might not care that much. They also received 10,000 km (6,213 mi) of free Supercharging back in December and not many people complained.

Finally, even though Tesla decided to make its next wave of customers very happy in both U.S. and Canada, the base-spec rear-wheel-drive Mustang Mach-E is still cheaper than a Model Y Long Range. The Ford’s price starts from $46,895 (without dealer hikes and presuming availability), while the Tesla now costs $52,990. However, the $6,095 difference does work in favor of the Model Y Long Range. The Tesla includes a slightly bigger usable battery (75 kWh) and all-wheel drive.

We’ll have to wait and see if this pricing policy will be kept by Tesla for the long term. But, right now, the automaker surely made a lot of people think about upgrading to a better version of their preferred vehicle. Investors might also have a thing or two to say after they see how existing and prospective buyers react.
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About the author: Florin Amariei
Florin Amariei profile photo

Car shows on TV and his father's Fiat Tempra may have been Florin's early influences, but nowadays he favors different things, like the power of an F-150 Raptor. He'll never be able to ignore the shape of a Ferrari though, especially a yellow one.
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