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Tesla cuts EV prices again following production and delivery downturn

The big picture: Tesla has slashed prices on its Model 3 and Model Y electric vehicles after revealing third quarter delivery numbers that failed to impress. The starting price for a new Model 3 has fallen to $38,990 for a rear-wheel drive model, which is down from the previous base price of $40,240. A similar $1,250 discount is also in effect for the long range model, bringing it down to $45,990.

The Model 3 performance variant now starts at $50,990, down from $53,240 previously – a savings of $2,250.

Tesla’s Model Y long range, meanwhile, is down to $48,490 and the Model Y performance is priced at $52,490 after $2,000 price cuts to both models.

It is not uncommon for Tesla to tweak pricing, but the latest cuts coincide with declining numbers. In its most recent vehicle production and delivery report, Tesla noted it produced 430,488 vehicles and delivered 435,059 examples in the third quarter. Those figures are down from the 479,700 EVs produced and 466,140 Teslas delivered in the second quarter.

Tesla said the decline in volumes was caused by planned downtimes for production facility upgrades. As such, the company’s volume target of roughly 1.8 million vehicles in 2023 remains unchanged. Despite the slowdown, Tesla’s stock value has increased in the days since the latest numbers were released and is up more than 135 percent year to date.

Back in August, Tesla started selling Model S and Model X variants for $10,000 less than before, albeit with shorter ranges and slower acceleration. Today, a dual-motor all-wheel drive Model S starts at $74,990 while the Plaid variant commands $89,990. A Tesla Plaid is the quickest accelerating production car available today.

Tesla CEO Elon Musk said in July that he believes it does make sense to sacrifice margins to drive volume growth. Doing so also puts the pressure on rival EV makers that simply may not have the ability to match Tesla blow for blow when it comes to price cuts.

Image credit: Makara Heng, Soly Moses

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