Tesla showed off the Model Y in March of 2019 and started taking orders. Then in record time, deliveries started in March of 2020. Since its release, we’ve seen the Tesla Model Y price change many times. This history makes it hard to know what’s coming.
Will the Tesla Model Y price drop? Will it increase? How about tax credits? There are many moving pieces and thanks to my investing background, I have a unique take. I’ll share some predictions below. But first, let’s start by looking at the Tesla Model Y price history.
Tesla Model Y Price History Chart
Update New Tesla Referral Program: Tesla just reintroduced its referral program (Aug. 2024). For an extra $1,000 discount, you can use My Referral Link. You’ll see it applied directly when clicking that link. It’ll work for the first 10 people that order and buy a Tesla. Or if not using this link, please use one from a friend or family. It’s an extra $1,000 discount 🙂
It took me hours to track down and chart Tesla Model Y prices. I used the Wayback Machine to double check historical changes on the Tesla order page. If you reuse this chart, please link back to this page.
The chart shows purchase prices without cost savings such as tax credits. Also, if you’re looking to buy, don’t forget about sales taxes, registration fees, etc. The all-in cost varies largely based on the area you live in.
I shared a video with the exact costs to buy a Tesla Model Y. I placed my order on the day it dropped by $13,000 and since then, it increased and then came down a bit more. Either way, this breakdown can give you a better idea of the all-in costs to buy a new Tesla…
Why Did Tesla Model Y Price Increase?
During the pandemic, there was an initial pullback with driving. And even today, there still aren’t as many people commuting to work. However, driving picked up as an alternative to flying and more people wanted to explore the great outdoors. National parks hit a record number of visitors.
On top of that, the auto industry overreacted by projecting lower demand for longer. The auto supply chain was hit for many reasons. The chip shortage was a bottleneck that grabbed headlines. And the car supply shortage – paired with returning buyers – pushed up prices.
Before the pandemic, I shared a video on why car prices would crash. But the government had different plans. Stimulus checks and artificially low rates boosted new car sales. The Tesla Model Y price history factors in many of these changes.
The economy was firing on many cylinders, but inevitably inflation spiked. To cool things down, Uncle Sam started to reverse course…
Why Did Tesla Model Y Price Drop?
One big reason we’ve seen prices drop is interest rates. As the Fed has pushed up rates, new car loan monthly payments have climbed. This creates a roadblock for many potential buyers.
Interest rates have had a big impact on the Tesla Model Y price history. Both on the way up and down. However, there’s another big factor that’s hard to predict…
The Big Drop: At the start of 2023, Tesla cut the Model Y price by up to 20%. This huge drop was to meet new tax credit requirements. I’d been tracking the long-range model for more than a year and on that same day, I put in an order.
Tesla has also ramped up production and continues to build and expand factories. The EV company is on track to sell well over 2 million cars in 2024. Supply is increasing and on top of that, Tesla has created better economies of scale.
This growth, along with great engineering, gives Tesla the best operating margins in the industry. Unlike other EV companies, Tesla can drop prices further and remain profitable. Investors haven’t been too happy with the price cuts, but it’s necessary to sell more cars.
Will Tesla Model Y Price Drop Again?
I predict we’ll see some more price cuts for the Model Y. They won’t be as big as the past drop which was to meet tax credit requirements. Instead, we might see a few $500-$1,000 cuts. I’m seeing stress building in the economy and new car demand is under pressure.
We’re getting mixed signals and consumer spending has been stronger than expected. Unemployment is near all-time lows, but inflation and higher borrowing costs are taking a toll.
As Tesla continues to ramp up production, it’ll need to cut prices to reach more customers. Otherwise, there might be too many new Teslas collecting dust. On top of that, Tesla will continue to improve production costs. The batteries are a huge expense but there’s big innovation underway. Some material costs have also come back down to earth.
Take all this with a grain of salt. As mentioned before, the government can send shockwaves through the economy at any moment. If the Fed starts decreasing rates, this could make Tesla Model Y loan payments more affordable. This and many other factors could create new demand. That could prop up or push prices higher.
Buying a Better Tesla Model Y for Less
I’ve run into an owner who has more than 500,000 miles on his Tesla. If you don’t get a lemon and treat it well, your Tesla can last a long time. My Model Y has 34,000 miles (Aug. 2024) and I haven’t paid for any maintenance yet (other than a few dollars for window wiper fluid and just ordered air filters).
With the Tesla Model Y price history chart, you can see the price today is below when it launched. And over that time, there have been many hardware and software upgrades. For example, Hardware 4.0 comes with a new suite of sensors and self-driving computer.
On top of that, a dollar today is worth less than a few years ago. Inflation is a hidden tax that reduces the purchasing power of your savings. If you’re looking to buy a new Tesla Model Y, you’re getting a much better deal today.
To lower the cost further, you can also find free Tesla charging. I’ve traveled across the country and have gotten to know my Model Y well. If you have any questions, check out that link and comment on any of my videos. And please consider using my Tesla Referral Link for an extra $1,000 discount 🙂