The Tesla Model 3 was the company’s first mass market car. Compared to the Model S and X, it was much more affordable. Since its release, we’ve seen the Tesla Model 3 price change many times. And with this history, we can make better predictions…
Will the Tesla Model 3 price increase? Will it drop? Should you wait to buy a Tesla? I bought a Tesla over a year ago and there are many moving pieces. With my experience and investing background, I have some good insight to share. I’ll share predictions below but first, let’s start by looking at the Tesla Model 3 price history.
Tesla Model 3 Price History Chart

It took me a few days to track down and chart Tesla Model 3 prices. With the Wayback Machine I double checked historical changes on the Tesla order page. If you reuse my chart, please link back to this page. Because that helps motivate me to share more research.
This chart shows you the purchase prices without tax credits and other cost savings. If you’re close to buying, don’t forget about sales taxes, registration fees, etc. The all-in cost changes based on the area you live in.
Also, to compare to the Tesla Model Y Price History, check out that article. I’ve also included a price history chart. You’ll see that it costs a little more, but you get more space with the Model Y. That’s the car I chose for my adventures.
Why Did Tesla Model 3 Price Increase?
Towards the start of the pandemic, people were staying at home and not driving as much. Even today, not as many people are commuting to work. However, driving increased as an alternative to flying. More people started exploring the great outdoors, and national parks reached a record number of visitors.
The auto industry overreacted by forecasting lower driving demand for longer. Many factors hit the auto supply chain. For example, the chip shortage grabbed headlines. It was a huge bottleneck. As a result, the limited car supply – paired with returning buyers – drove prices higher.
On top of that, the government continued to manipulate the market. It indirectly boosted new car sales with stimulus checks and keeping rates low. These are just a few key factors that have led to a bumpy Tesla Model 3 price history.
The economy was running hot on many levels, but as a result, inflation spiked. To avoid spinning out of control, the government started to reverse course…
Why Did Tesla Model 3 Price Drop?
Higher interest rates are a big reason we’ve seen prices drop. As the Fed has increased rates, new car loan monthly payments have moved up. This creates a roadblock for many people wanting to buy a Tesla.
Interest rates have had a huge impact on the Tesla Model 3 price history. That’s on both the way up and down. However, there’s another factor that makes it hard to predict prices…
The Big Drop: At the start of 2023, Tesla cut the Model 3 price by up to 14%. That was for the performance model in a single day. The long range wasn’t available then. You can see part of that line missing in the chart. And the standard didn’t drop as much. Although, Tesla continued to cut prices the rest of the year.
Tesla has also increased production and continues to build and expand factories. The EV company will likely sell over 2 million cars in 2024. Supply is moving higher and on top of that, Tesla is creating better economies of scale.
This growth, along with leading engineering, gives Tesla the best operating margins in the EV industry. Unlike other companies, Tesla can cut prices further and remain profitable. These price cuts aren’t great for investors in the short term, but it’s necessary to sell more cars.
Will Tesla Model 3 Price Drop Again?
As you can see in the chart, Tesla Model 3 prices have bumped up a little in 2024. But will this continue? Or will we see more price cuts?
I predict we’ll see more price cuts for the Model 3. Although, they won’t be as big as the past drops. Instead, we might see a few $500-$1,000 cuts. You can see these are more common in the chart.
There’s more stress in the economy and new car demand is still dampened with higher interest rates. Although, we’re getting mixed signals from the economy.
Consumer spending has been stronger than expected. Unemployment is at low levels, but higher borrowing costs are taking a toll. However, recent inflation numbers are a bit lower, and could lead to the Fed cutting rates. If the Fed drops rates, this could drive new demand and prices higher.
Nonetheless, Fed decisions and rates are hard to predict. That’s why this next factor carries more weight in my price predictions…
As Tesla keeps ramping up production, it’ll need to cut prices to reach more customers. Without lower prices, too many new Teslas might collect dust in parking lots. To help counter this, Tesla has positioned itself well…
Tesla continues to improve production costs. The batteries are expensive but there’s innovation underway. Many EV material costs have also come back down to earth. This gives Tesla more wiggle room to cut prices.
Please take my predictions with a grain of salt. The government can send shockwaves throughout markets at any moment. If the Fed decreases rates, this could make Tesla Model 3 loan payments cheaper. This and other factors could create new buying demand to push prices higher.
Should You Wait to Buy a Tesla Model 3?
This is a tough question to answer. It depends on your situation. Although, here’s some general advice…
If you do long road trips and want to move fast, I don’t recommend buying a Tesla. A gas car will save you time without having to charge. But if you’re just using it for daily commuting, a low-cost Tesla could save you both time and money.
Imagine never having to stop at a gas station again. Instead, just plug in at home each night. I often use a standard 12-volt wall outlet and that’s more than enough juice for an hour or two of driving each day. There are many benefits to owning an electric car and they keep improving.
As you can see in the Tesla Model 3 price history chart, the price has come down a lot. On top of that, there have been many upgrades to both the hardware and software. For example, the new cars come with Hardware 4.0. That includes new sensors and a self-driving computer.
You can get a much better Tesla today than a year ago. Inflation-adjusted, the cost is even lower. To answer a few more questions, check out my insight after my first 15,000 miles…
I’ve traveled across the country and have gotten to know my Tesla well. If you have any questions, feel free to comment on any of my videos. And as a small creator, I’d love it if you’d like and subscribe. Because that motivates me to share more research.
Going one step further, you can also find places to charge your Tesla for free. Check out that article to learn how.