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Published on August 17th, 2019 | by Paul Fosse

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Tesla Cuts Model Y Prices To Reflect Last Few Model 3 Price Cuts — Detailed Look

August 17th, 2019 by  


From Tesla Design Studio

Tesla had made several pricing changes to the Model 3 since the Model Y was unveiled, and the company hadn’t updated the pricing and configurations in the Model Y Design Studio to reflect that until yesterday. Tesla raised base prices on the Model 3 when it started including Autopilot by default, but more on the low-end models like the Standard Range Plus (SR+).

Tesla then dropped prices on the Model 3 after the tax credit was reduced (again), but more for the high-end models like the Performance and All Wheel Drive. The company changed the color prices to charge $750 for black (which was free) and offer pearl white for free instead (it was previously $1,500).

My Model Y Order from April 2019

My order from April.

I didn’t order the Model Y at the unveiling on March 14th, because I really like my Model 3 and am not “suffering” waiting for the car like I felt I was waiting for the Model 3 (1st world problem to be sure). But when Elon started to talk about the cars being appreciating assets and how he will be raising prices as Tesla releases more Full Self-Driving (FSD) capabilities, I figured that I should put down a deposit. Since then, the overall prices have gone down, not up, for my fully loaded configuration.

Same configuration today in the Design Studio

Since I happened to order a white car and also ordered the performance model that has gone down the most in the Model 3, that’s a $4,000 drop. This isn’t reflected yet on my Tesla account, but I’m sure they will update it as the car gets closer to delivery.

Price Changes Since Model Y Launch

Original prices from unveiling.

Below, I’ve tried to show how the various models have changed prices since the unveiling and how the prices compare to the Model 3.

You can see all of the Model Y prices went down $2,000 since the unveiling. I can’t make any comparisons of the new Standard Range price because the price is no longer in the design studio. Don’t fear that it has been discontinued, though, it is still mentioned on the first page. Assuming Tesla honors the $39,000 price from the unveiling, it will be only $10 more than the Model 3, but it is likely that the Model 3 will change in price many times between now and 2021. I can’t compare the Long Range RWD to the Model 3 because that configuration is no longer available. The AWD Model Y is a reasonable $4,010 more than the Model 3 and the Performance Model Y is $5,010 more than the comparable Model 3. The pricing is reasonable, but not overly aggressive. I think Tesla is anti-selling the Model Y a bit to avoid hurting Model 3 sales.

Toyota Crossover Pricing Comparison

Captured from Cars.com

I’m not planning to do a full comparison of the Model Y to the RAV4 for a while, but I  thought I would see how Toyota prices the RAV4 in comparison to Tesla prices. I noticed several differences.

First, Toyota only charges $1,400 extra for all-wheel drive vs $4,000 that Tesla charges. That makes sense because Tesla’s AWD includes the reliability and performance advantages of a second motor taking your 5.5 seconds 0-60 mph time to 4.8 seconds. The RAV4 time is almost double at 8.0 seconds. Even the Highlander with the V6 engine with 45% more horsepower is only a little less slow at 7.2 seconds.

The other difference is Toyota’s crossover is only $1,050 more than a comparable Camry. The Highlander is $9,280 more than the comparable Camry. It isn’t a perfect comparison because the RAV4 at 181 inches is 11 inches shorter than the Camry at 192 inches, while the Highlander in also 192 inches long. I expect the Model Y to be a couple of inches longer (maybe 187) than the Model 3, which is 185 inches long, but it should have comparable room to the Highlander, not the RAV4, since those cars use several inches of length for their gas engines. Tesla is putting a 3rd row option in the car to allow one model to compete with both smaller crossovers like the RAV4 and bigger crossovers like the Highlander.


Conclusion

It’s good that Tesla updated the pricing of the Model Y to be more consistent with the Model 3. I think it gets confusing if they are not fairly comparable. I’m reasonably sure that Tesla is still anti-selling the Model Y to avoid hurting its second half Model 3 sales. An optimistic take on this price adjustment is that Tesla is getting ready to start production early in 2020 and needs to have the prices updated so it can build the configurations with the most demand. I’m confident that the Model Y will have very high demand because of 2 simple facts: First, consumers around the world like crossovers more than sedans. Second, there are no crossovers available today that can match Tesla’s performance until you get to about double Tesla’s cost of ownership (think Porsche Cayenne or Mercedes GLE).

If you plan to get a Tesla with Full Self-Driving, today is a great day to order the Model 3, Model S, or Model X with Full Self-Driving because the price was supposed go up a $1,000 yesterday, but hasn’t yet!

Use my Tesla referral link to get 1,000 miles of free Supercharging on a Tesla Model S, Model X, or Model 3 (you can’t use it on the Model Y yet), here’s the link: https://ts.la/paul92237 (but if someone else helped you, please use their link). 
 

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About the Author

A Software engineer for over 30 years, first developing EDI software, then developing data warehouse systems. Along the way, I've also had the chance to help start a software consulting firm and do portfolio management. In 2010, I took an interest in electric cars because gas was getting expensive. In 2015, I started reading CleanTechnica and took an interest in solar, mainly because it was a threat to my oil and gas investments. Follow me on Twitter @atj721 Tesla investor. Tesla referral code: https://ts.la/paul92237



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