Tesla Model 3 Price Slashed to $37,020 in Latest Round of Discounts
If you’ve been looking to buy a Tesla, now might be a good time.
If you've been toying around with the idea of buying a Tesla Model 3, it may finally be time to pull the trigger. Seemingly overnight, the automaker introduced heavy discounts to its existing inventory, allowing customers to pick up a brand-new Tesla and save several thousand bucks along the way.
A brand new 2023 Tesla Model 3 Rear-Wheel Drive in Tesla's U.S. inventory can be had for as low as $37,020 at the time of writing. Long Range models, which have a sticker price of around $48,740 and above, are discounted to as low as $43,870. The Performance trim, which retails for upwards of $53,000 gets an even steeper discount, allowing new owners to hop in the seat for as little as $47,920.
Tesla has been heavily discounting its vehicles over the last several months. Custom-order vehicles have dropped significantly in price since April when Tesla held its pricing steady in anticipation that the Federal EV tax credit could be lost from cars equipped with its LFP battery packs. The automaker has since received confirmation that its cars would, in fact, qualify for the revised EV tax credit and its prices have been falling since.
Interest rates have been rising since that time too. The Federal Funds Effective Rate has been hiked from 4.83% in April to 5.12% in July, up from just 0.33% in April 2022. As a result, loans for vehicles are now significantly more expensive, which has forced Tesla's hand in reducing vehicle prices to steady demand.
"As interest rates rise, the affordability of anything bought with that decreases, so effectively increasing the price of the car," said CEO Elon Musk during the company's last quarterly earnings call. "So, when interest rates rise dramatically, we actually have to reduce the price of the car because the interest payments increase the price of the car."
When Tesla first unveiled the Model 3 in 2016, it promised a $35,000 version that was meant to be affordable to the masses. Tesla technically delivered on its promise, though the model was short-lived and was axed shortly after it became available to purchase.
Now, $37,020 isn't quite at Tesla's goal, however, when accounting for inflation between 2016 and 2023, it would seem that Tesla not only met its goal but surpassed it. $44,717 has the same buying power as $35,000 in 2016, meaning that Tesla effectively smashed its goal by an additional 17% if buying from inventory, or slightly less if custom ordering a new Model 3.
The reason for the price cut isn't exactly clear, though it's believed that it could be due to the inevitable upcoming refresh of the Model 3, dubbed "Project Highland." Car spotters around the world have reported sightings of Model 3s under camo, all of which are believed to be examples of the reworked variant. The vehicle is believed to have a refreshed front and rear fascia, as well as a refreshed interior without turn signal or gear selector stalks.
One overseas publication noted that the refreshed model could be revealed as soon as Friday. While this report hasn't been substantiated by the manufacturer, Tesla's Gigafactory in Shanghai is believed to already have produced examples of the refreshed car and is storing them under cover at the facility. Though this, again, is unconfirmed.
Tesla's Fremont facility is also currently undergoing a refresh on the Model 3 production line. Musk warned during an earnings call earlier this year that Quarter 3 production of the Model 3 would be slowed due to "global factory upgrades."
Buying a Model 3 today means potentially missing out on the refresh. But for the price, it's hard to turn down if you're looking to pick up a new EV.
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