Looking to buy a Tesla? Company cuts prices as much as 20% to boost sales

Tesla just got a lot cheaper, after the Austin-based electric automaker slashed prices by as much as 20% likely in an effort to increase demand.

The price cuts apply to vehicles sold in the United States and range from 6% to 20% reductions for Model 3 and Model Y SUVs and some higher-end models. Tesla made similar reductions in Europe and dropped prices on its cars in China last week.

For U.S. buyers, the drop means that certain Model 3 sedans and Model Y SUVs are now below the cap needed to qualify for electric vehicle tax credits under changes set in motion by the federal Inflation Reduction Act, which was signed into law last year. Tesla also said on its website that some customers are now eligible for the tax credit on cars delivered through March.

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Tesla Model Y sees 20% decrease in price

Tesla did not saw how long the lower prices would remain in place. The Tesla website shows the Model Y with the largest drop in sticker price, from $65,990 to $53,990, a 20% decrease. The lowest-priced Model 3 dropped to $43,990 from $46,990, a 6.4% drop. The most expensive vehicles on the market dropped as much as $21,000, including the company’s Model S Plaid, which had a 15% price drop.

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Tesla grappled with COVID-19 shutdowns in China last year that cut into production at its Shanghai factory, while also working to continue scaling up production at its Berlin and Austin facilities. Investors have also been worried that Musk has been distracted by his $44 billion purchase of social media platform Twitter, rather than focusing on Tesla’s operations. 

Tesla shares were down more than 65% in 2022, outpacing broader market declines. The drop also meant Musk, whose wealth is largely tied up in Tesla stock, is no longer the world’s richest person.

move its headquarters to Austin, and now operates out of the same site as the manufacturing facility. It also is expected to eventually produce Model 3 vehicles and batteries.

Tesla is also planning more than $700 million in new construction at its Austin site, according to filings from December and January with the state of Texas and the city of Austin.

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