Gary Zhou 
As per recent updates on the vehicles’ online configurator, Tesla’s entry-level Model 3 and Model Y have received a price reduction. The Model 3 Standard Range Plus price has been decreased by $1,000 from $37,990 to $36,990. The Model Y Standard Range has been decreased by $2,000 from $41,990 to $39,990.
The price changes for Model Y and Model 3 only impact the base models of the vehicles, with the price remaining the same for the Long Range Dual Motor AWD versions of both EVs. Interestingly enough, the price actually increased for Model 3 Performance and Model Y Performance, with the former now costing $55,990 from $54,990, and the latter now beginning at $60,990, up $1,000 from its previous price of $59,990.
The price changes for the base Model 3 and Model Y would make the two vehicles available to a greater number of potential buyers. At less than $37,000 to start, with California’s $1,500 Clean Fuel Incentive, the Model 3 Standard Range Plus will cost just above $35,000. The Model 3 Standard Range Plus would effectively cost below $30,000 if one were to consider the potential $7,000 tax credit planned by the Biden administration.
For the Model Y Standard Range, the same is true. The entry-level version of the all-electric crossover has effectively matched the price of key rivals on the market at $39,990, such as the Volkswagen ID.4, which has a starting MSRP of $39,995, or even some common ICE crossovers such as the Toyota RAV4, which costs $42,600 for the Prime XSE trim. Coupled with the upcoming $7,000 tax credit from the Biden administration, one of the best bang-for-your-buck crossovers on the market may very well be the base Model Y.
With the new price changes in place, Tesla has taken yet another step towards achieving its initial Model 3 and Model Y starting price target forecasts. After all, the Model 3 was supposed to start at $35,000, and a starting price of $39,000 was revealed for the Model Y. The Model 3 and Model Y could very well break through the mass market at their current prices, enabling Tesla to attract budget-conscious buyers even before the launch of its highly anticipated $25K vehicle.
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