A sign with the Tesla logo on the facade of the brand's dealership, on June 8, 2023, in Valencia, Valencian Community, Spain. The multinational that plans to manufacture electric cars in Valencia is Tesla. The company's goal is to open its second gigafactory in Europe in the metropolitan area of Valencia. Tesla has just managed to place its Tesla Y model as the best-selling car in Europe and is increasing its sales exponentially. JORGE GIL/BENZINGA
EV giant Tesla Inc (NASDAQ:TSLA) has updated its official U.S. website to show the starting prices of its Model 3 and Y vehicles after federal tax credits, in an apparent effort to educate potential buyers about how affordable these cars have become.
The Tesla logo on the facade of the brand’s dealership, on June 8, 2023, in Valencia, Valencian Community, Spain. JORGE GIL/BENZINGA
The U.S. website now shows that the Model 3 starts at $32,740 and Model Y at $39,990, with a footnote specifying that it was only after federal tax credits.
Tesla investor and entrepreneur Sawyer Merritt spotted this change and shared it on Twitter late on Wednesday.
“NEWS: To better educate potential buyers about how affordable the Model 3 and Model Y have become, Tesla now displays the starting price after federal tax credits directly on the ordering pages,” said Sawyer Merritt, co-founder of Twin Birch USA.
Starting prices for Tesla’s best-selling models after fed tax credit are $32,740 for the Model 3 and $39,990 for the Model Y.
At the time of writing, Tesla’s websites in Canada, China and the UK did not display similar information on the Model 3 and Y pages.
After the U.S. treasury department issued fresh guidance on battery sourcing in March, Model 3’s Rear-Wheel Drive (RWD) and Long Range versions were qualified only for a tax credit of $3,750 given that its batteries come from China. The Performance range, however, was eligible for a full tax credit.
On Tuesday, the U.S. Department of Energy changed this and confirmed that all versions of the Tesla Model 3 are now eligible for a full tax credit.
Versions of the Tesla Model 3 and Model Y are now among the 22 battery electric vehicles eligible for a full tax credit of $7,500 in the U.S.
“One major purpose of the big picture Tesla plan when cutting prices was making sure most models were eligible for tax credits,” said Danielle Shay on Twitter, a VP of Options for Simpler Trading.
With the starting price of the Model 3 RWD now at $34,130 including the destination fee, Tesla is beginning to fill the gap in the market for affordable vehicles vacated by the Detroit 3, said Morgan Stanley analyst Adam Jonas.
As the Model 3 and Model Y continue to slash prices, this now puts a great amount of pressure on its competitors to compete with Tesla’s prices.
Tesla has been a game changer in the automotive industry since entering the market.
The Model 3 has been a flagship for Tesla as it has become more affordable to its customers.
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