Tesla Price Cuts for Model 3 and Y As Musk Pushes to Meet Delivery Goal

Key takeaways

• Tesla has cut prices for its Model 3 and Y — again
• The company is looking to top its 1.8 million deliveries goal for the year
• Tesla stock closed flat after the announcement

EV maker Tesla has introduced yet more price cuts on its most popular models in a bid to boost deliveries for the final quarter. We’re taking bets that the Tesla customers who bought just 12 months ago aren’t too happy right now.

The move comes just days after the company announced it had fallen short of delivery expectations, disappointing Wall Street despite the warnings from Tesla that factory shutdowns would hamper production.

Here’s the latest on the Tesla price cuts and why they’re needed for Tesla to stay on track with its delivery target.

What are the new Tesla price cuts?

Tesla has been the king of price cuts this year in a bid to draw new customers in and keep production levels steady. Here’s a quick rundown of what’s changed:

• The Model 3 starting price is now $38,990, down from $40,240
• The long-range Model 3 starting price is now $45,990 from $47,240
• The Model 3 Performance is now $50,990, down from $53,240
• The Model Y Performance now starts at $52,490, down from $54,490

The EV company decided to take a gamble and slash the price of its popular Tesla models in the U.S., China and Europe to both take on the competition and sweeten the deal for customers unsure about spending in an economic downturn.

Tesla’s stock price finished Thursday flat after the news and fell slightly in after-hours trading. It’s currently priced at $260 a share.

Why is Tesla slashing prices again?

It’s fair to say that Tesla’s deliveries in Q3 were a flop, even though the EV maker pre-warned Wall Street about a slowdown from factory refurbs in the quarter. Tesla shipped 435,059 EVs in the quarter, which was down nearly 7% from the consecutive period and missed expectations of 459,949 vehicles from Wall Street.

But Tesla reiterated its full-year deliveries guidance and still plans to ship 1.8 million vehicles this year. That’s a shortfall of 476,000 EVs that Tesla has to deliver before it can call the job done — hence the big push with more price cuts.

It might be a hard goal for the company to reach. New data from the China Passenger Car Association (CPCA) on Sunday showed Tesla’s China-made EV sales were down 10.9% in September from the same time last year, while sales of the Model 3 and Y were down 12% from the month before.

Tesla’s price cuts might not be enough to stop Chinese brand BYD from overtaking Tesla as the world’s biggest EV maker. For the third quarter, BYD produced 440,000 new battery EVs, a 67% boost from 2022; Tesla, on the other hand, said it had made 430,488 EVs.

The bottom line

Factory shutdowns have hampered Tesla’s ambitious delivery goal, but sticking to its full-year guidance is a sign the company is confident about its prospects. Given Tesla recorded record sales in Q2 after the price cuts were first announced, they’re clearly having their intended effect.