Tesla has bumped up the prices of its least-expensive cars for at least the seventh time this year. This round of increases applies to the Model 3 Long Range and the Model Y Long Range. Each gets a $1,000 increase.
- Model 3 Long Range AWD: now $49,990
- Model Y Long Range AWD: now $53,990
Mid-Year Price Increases are Normal for Tesla
Price increases during a model’s run are unusual, but Tesla goes its own way in many aspects of its business.
For one, it eschews model years. More conventional automakers tend to raise prices when they introduce a new model year. But Tesla never introduces a new model year. It makes changes to its cars during a production run. It changes prices the same way.
Lack of Dealerships a Factor
For another, Tesla sells cars directly, not working through dealerships as third parties. This summer, most cars have seen their actual sale price increase (dozens are selling routinely above sticker price). In essence, prices are going up for almost every car. Other automakers are benefitting from increased transaction prices without raising the sticker price on their vehicles. Tesla is simply posting it on the door.
Tesla Faces Increasing Competition
Can shoppers expect the price changes to stop anytime soon? Probably not. Demand for almost all cars is sky-high right now, and prices are naturally higher.
Tesla faces increasing competition in every market segment. Last year, nearly 80% of the electric vehicles (EVs) sold in America were Tesla products. Electric car sales are growing five times as fast as sales of gasoline-powered cars.
But nearly every automaker has introduced at least one new EV in 2021. So, as the pie grows, Tesla’s share is shrinking. We expect to see continued price fluctuation as Tesla adjusts to the new competition.
