After huge cuts, Tesla raises Model Y price… but not by much
Tesla has increased prices on new Model Ys, in a slight reversal after drastic cuts just two weeks ago.
The changes went live on Tesla’s website tonight, and only seem to affect the Model Y, Tesla’s most popular vehicle. However, in contrast to the massive price cuts of up to $13K, the Model Y has been bumped in price by just $500.
This brings it to a base price of $53,490, as opposed to $52,990 prior to this bump. The Model 3, X, and S all maintain the same post-cut prices as before.
The recent price cuts came after weeks of signals from Tesla that demand might not have been keeping up supply, with Tesla offering discounts and incentives in various regions as inventory started to pile up. Tesla had hiked prices significantly over the course of 2021-2022 as EV demand far outstripped supply, and had little trouble selling out of vehicles until the end of the year.
We here at Electrek noted that the result of these massive cuts could lead to an EV price war, which Tesla seems poised to do well in. Though this will cut into Tesla’s high margins, its margins are higher than other companies in the space, which gives it leeway to cut prices when supply gets to the point that it can keep up with demand.
And in the weeks since that price drop, Tesla has seen “unprecedented demand” on these vehicles. Not only was the Model Y price dropped by $13K, but this also put it into range to qualify for the US EV tax credit, meaning a $20K price drop for many customers, as long as they take delivery before March when tax credits are expected to change once again.
Notably, today’s price bump does again make a difference for EV tax credit eligibility. At the previous base MSRP of $52,990, up to $2,000 in options could be added before the 5-seat Model Y reached the government’s $55,000 MSRP limit to be eligible for tax credits. This meant that buyers could choose any paint color (which cost up to $2,000) or could choose the $2,000 20-inch wheels and just skate in under the limit.
Now, adding the most-expensive red multi-coat paint color or the 20-inch wheel option take the MSRP above $55,000, which means Model Ys with those options will not qualify. At this point, the only options a 5-seat Model Y can choose to still qualify for tax credits are silver, blue, or black paint or a tow hitch (though the hitch can be added after purchase, which we’d recommend if you’re getting any other options).
Tesla also made another change tonight – it now quotes the actual MSRP of the vehicle upfront, instead of including “potential savings” from gas and incentives:
Tesla has gone back and forth on this over the years. The previous method has been criticized for being potentially misleading, quoting a price far lower than a customer would pay. But Tesla, somewhat correctly, argues that it’s a more realistic comparison in terms of lifecycle vehicle costs. Tesla does offer a calculator so you can figure out your own gas savings based on annual vehicle miles, electricity rate, and gasoline costs, but would previously include average estimates of those upfront, while now they’re behind a “learn more” link:
Electrek’s Take
We’ve received a lot of angry emails recently from Model Y buyers about the price cut, feeling aggrieved that they purchased a vehicle that they could have gotten for cheaper had they just waited a little longer.
But, such is the case with purchases – sometimes the price changes, and sometimes you don’t get the best price. C’est la vie.
That said, this price change was sudden and massive, so the complaints are more reasonable this time around. Usually pricing doesn’t change so much so quickly, and usually those price changes aren’t done by a company that has repeatedly stated that “the price is the price” and that it wants to buck the dealership model and stick with transparent, predictable pricing.
Price bumps like these are a little more reasonable, as a 1% difference in price of a vehicle isn’t going to break most people’s bank. But it still violates Tesla’s “we don’t want to jerk prices around like a dealership” model, given that this happened just under two weeks after a huge price cut. There was one point long ago where it was easy to keep up with Tesla pricing, but that hasn’t been the case for a while now.
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The US announced two proposals for offshore wind sales that could generate more than 18 gigawatts (GW) of clean energy – enough to power more than 6 million homes.
New US offshore wind auction areas
The offshore wind auction areas announced by the US Department of the Interior and the Bureau of Ocean Energy Management (BOEM) are off the Oregon coast and in the Gulf of Maine. It’s the first in a five-year lease schedule that could see up to 12 separate offshore wind auctions.
The US has already held four offshore wind lease auctions in the New York–New Jersey region, off the Carolinas, and off the Pacific and Gulf of Mexico coasts.
Gulf of Maine
The first-ever offshore wind energy auction in the Gulf of Maine would include eight lease areas off the Maine, Massachusetts, and New Hampshire coasts. The nearly 1 million acres have the potential to generate approximately 15 GW of renewable energy and power more than 5 million homes.
This auction is exciting because BOEM wants to conduct simultaneous auctions for each of the eight lease areas using multiple-factor bidding.
In July 2023, Governor Janet Mills (D-ME) signed legislation to procure up to 3 GW of offshore wind energy in the Gulf of Maine by 2040. Offshore wind is banned in Maine state waters to protect the commercial lobster harvesting industry.
Oregon
The proposed lease sale in Oregon includes two lease areas totaling 194,995 acres – one in the Coos Bay Wind Energy Area and the other in the Brookings Wind Energy Area – which have the potential to power more than 1 million homes with renewable energy. The areas were finalized by BOEM in February.
The Coos Bay WEA is 61,204 acres and located approximately 32 miles from shore. The Brookings WEA is 133,808 acres and approximately 18 miles off the coast.
The state of Oregon has set a goal of achieving 3 GW of offshore wind by 2030.
Due to deep waters, any offshore wind farms in the Gulf of Maine and offshore Oregon will consist of floating wind turbines.
Read more: California exceeds 100% of energy demand with renewables over a record 30 days
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Tesla’s next-gen Dojo AI training tile is in production, according to supplier Taiwan Semiconductor Manufacturing Company Limited (TSMC).
Tesla has been heavily investing in AI training compute power both through buying NVIDIA hardware and building its own under its Dojo program.
The first generation of its Dojo super computing platform went into operation last summer.
Shortly after, it was reported that Tesla had expanded its partnership with TSMC, a large semiconductor company that manufactures the Dojo chip for the automaker.
Now, TSMC has confirmed that Tesla’s next-generation Dojo chip has entered production and they are working on tech that could deliver much greater power to Dojo in 2027 (via IEEE Spectrum):
At TSMC’s North American Technology Symposium on Wednesday, the company detailed both its semiconductor technology and chip-packaging technology road maps. While the former is key to keeping the traditional part of Moore’s Law going, the latter could accelerate a trend toward processors made from more and more silicon, leading quickly to systems the size of a full silicon wafer. Such a system, Tesla’s next generation Dojo training tile is already in production, TSMC says. And in 2027 the foundry plans to offer technology for more complex wafer-scale systems than Tesla’s that could deliver 40 times as much computing power as today’s systems.
This new tile is likely going to be used for Tesla’s new planned $500 million Dojo cluster in New York.
Sperately, Tesla is building a new 100 MW data center to train its self-driving AI at Gigafactory Texas, but we were told that this system is going to use NVIDIA hardware.
Tesla’s Dojo program hasn’t been all smooth sailing. In December, we reported that two of the top executive engineers behind the program left the company.
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