Tesla has decreased the base price of the basic Model 3 by $1000 and the basic Model Y by $2000. The basic Model 3 now has a base price of $36,990 and the basic Model Y starts at $39,990. The price of the Performance versions of both models have increased, the Model 3 Performance to $55,990 and the Model Y Performance to $60,990.
Tesla has said very little about the pricing changes for the Model 3 and Model Y and hasn’t advertised them very much. Instead, it plugged its “dog mode,” a way for Tesla owners to keep pets from overheating or freezing while waiting for their people to return in its vehicles, in a tweet:
Perhaps the company hopes that the slightly cheaper price of the basic Model 3 and Model Y will be attractive to buyers who have considered buying an electric vehicle, but are simply looking around for a more affordable model.
At the current base prices, the basic versions of the Model 3 and Model Y are in a good position to compete on price with electric vehicles made by other auto manufacturers. The Nissan Leaf and Chevrolet Bolt both start at $44,000.
Tesla officials have pushed for increasing demand for its more profitable self-driving software. Its Enhanced Autopilot, which boasts most of the same features as Full Self-Driving (FSD), has recently returned to Europe and China. Tesla has plans to release a subscription plan for Full Self-Driving and has reportedly discussed offering licensing plans for Full Self-Driving to other auto manufacturers. If the company can make Enhanced Autopilot and Full Self-Driving more mainstream, that could become a bigger moneymaker for the company than simply selling more cars.
Not that it has any plans to stop making electric vehicles. It appears to have plans to build a factory in India, according to comments made by Indian government officials. Tariffs and regulations had previously been a concern for the company despite Indian Prime Minister Narendra Modi’s complimentary comments about the company during a tour of its California Gigafactory in 2015.
It might also build another factory in an as-yet-undisclosed location in the United States, according to filings with regulators from October 2020. Tesla is simply seen as the somewhat pricey “status symbol” even among electric vehicles even though the price changes for the Model 3 and Model Y do show that it is interested in staying competitive.
Tesla does have a $25,000 electric car in the works, but that is not expected to be released until 2023 at the earliest. Most recently, the president of Tesla’s operations in China, Tom Zhu, said that the laboratory in which Tesla plans to develop the $25,000 vehicle could be up and running as early as this year.