Discussion: Large price reduction Across Tesla vehicle family 1.12.2023

Tesla has reduced Model Y and Model 3 prices DRASTICALLY. Now several models will qualify for the $7,500 tax incentive until at least March.

Here is a picture of the price reductions.

It is important to note which cars will now qualify for the tax credits and which won’t.

Model 3 RWD qualifies for the Tax credit until March. The effective price for a no option Model 3 RWD should now be about $36,500 after the tax credit.

Model 3 LR should qualify for the tax credit. However, you can’t configure it on the site. You will have to find one already built but not sold to get one.

Model 3 Performance is under the $55k cap now. However, it is not listed on the government website as being eligible. The Tesla website explicitly says it qualifies right now but this may be incorrect. You might find that when you file your tax return in 2024 they deny it because it is not listed as being eligible with the government.

Manufacturers and Models for New Qualified Clean Vehicles Purchased in 2023 or After | Internal Revenue Service

List of vehicles that are eligible for a 30D clean vehicle tax credit and the amount of the qualifying credit, if purchased between 2023 and 2032.

www.irs.gov

Model Y LR now qualifies. The effective price for it is now about $45,490 after tax credits.😳😭

Resell values have been OBLITERATED! These cars are essentially worthless on the resell market now.

This really is a monumental shift in pricing for Tesla. They were already dominating the market and this can only strengthen their lead.

None of the Model Y Performance cars will qualify for the tax credits but that price is now less than I paid for my 2022 Model 3 Performance($59k).

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(moderator note: In model 3 subforum this will be THE thread on this topic. All discussion on this price cut in this subforum will be moved in to this thread, so there will not be multiples of this topic in this subforum)

 

[ay221]

You should of bought something like a Taycan if you wanted to keep value somewhat reasonable and have it electric. I heard they keep their values well.

 

[T4M3]

Thanks for the replies, I wouldn’t be selling because I have to quite the opposite, I’d sell it simply because I despair at losing such a large sum of money in such a short period of time, for me it’s time to ‘cash out’ as the saying goes. And even with prices being as low as they are I wouldn’t buy again just yet.
Thanks again, anybody want an absolute bargain of a car Lol 😂

I understand the urge to 'cash out' and everybody's situation is different but I would just like to re-iterate my previous suggestion to hold on to the car.

The tax incentive on the Tesla's seems to be expiring at the end of March 2023 (per their own website if I am not mistaken). So I would hold on to the car at least until the end of April and see where the prices will be heading after the tax credit has expired.

 

[enemji]

Ok basically long story short, I have a model3p full fsd the usual generic Tesla car, I have owned luxury mid range cars for over 30 years, in that time I’ve had new E classes, BMW’s, Porsche etc etc you get the picture. I Bought this car used about nine months ago as we have the solar panels and battery set up at home so it seemed like a good idea. I have never lost so much value on a car in such a short period of time, and that includes around ten new cars over my driving lifetime, I bought it at a good price and if I was to sell today I’d lose around 16k. The car doesn’t cost anything as I bought outright but after doing a bit of web research it appears not only are they going to stay low there likely to carry on falling like a brick.
I like the car, well it’s ok, there’s a lot of party trick features to it that simply is a waste of time apart from demonstrating to others what it can do, kids seem to think it’s cool, I could also pull it apart after coming from an S class but that’s another topic.
So do I sell and take the hit, maybe buy one again after a year once the ev market stabilises, or stick with it hope for the best and put my blindfold back on.
No abuse please, this is just a general question as nearly everyone on here is in the same boat if you own your Tesla.
Thanks.
Ps, sorry not so short after all.

Loss in Valuation is a sunk cost. Nothing you can do. Keep it if you need the car or sell it at the loss if you want some money back.

Almost like finding a spouse who does not do all that you thought s/he would. Do you dump and find another one and shell out alimony??

 

[Niroc]

I under the discouragement. Regardless of what it is called, it is money lost.

I sold my M3 last year because they were offering me more than what I paid for it. Due to working from home I had no interest of buying another expensive EV. But with current rebate and price reduction I decided to order a M3 RWD. The concern for devaluation will be lessened due to fed/state rebates and price reduction.

 

[stesta5074]

I bought 3 Teslas in 2022 that got rocked by this. Being in the car biz most of my life, I can't understand the thinking that your used car somehow retains value. Yeah, nice while it lasted before Tesla scaled up... but we all knew the scale up was coming.

 

[stesta5074]

Imagine selling your Tesla because "mad at Elon" and going back to $600 a month in gas and insurance. Ya showed him!

 

[tlr1000]

Selling it only makes sense if you know the prices will drop again drastically soon. Sell and rebuy after the drop. Unfortunately no one ever know about these price drops so it's really impossible to plan this way. But after it's dropped in price and unlikely to drop again by any significant amount it doesn't make much sense to sell even though you've taken a hit on asset value.

I find that when it comes to this brand of car people can get very emotional and sometimes decisions are overwhelmed and logic is gone.

 

[Kevy Baby]

I have a model3p full fsd the usual generic Tesla car...

So, you classify the top end of the Model 3 a "generic" Tesla?

I have owned luxury mid range cars for over 30 years, in that time I’ve had new E classes, BMW’s, Porsche etc etc you get the picture.

Yes, I get the picture: you like to brag

I Bought this car used about nine months ago as we have the solar panels and battery set up at home so it seemed like a good idea. I have never lost so much value on a car in such a short period of time, and that includes around ten new cars over my driving lifetime, I bought it at a good price and if I was to sell today I’d lose around 16k.

9 months ago (circa May 2022) was the height of the over-priced cars trend. You literally bought at the top of the bubble and are surprised that it has lost so much value?

...but after doing a bit of web research it appears not only are they going to stay low there likely to carry on falling like a brick.

I'm sure there is no confirmation bias going on here...

I could also pull it apart after coming from an S class but that’s another topic.

You are comparing two vastly different cars: the S Class starts at $114,500 and the M3P starts at $54,000

So do I sell and take the hit

Yes, please do

No abuse please, this is just a general question as nearly everyone on here is in the same boat if you own your Tesla.

Very presumptive to assume everyone is in the same boat as you. I have no intention of selling my M3 SR+ any time soon: I hope to get 200,000+ miles out of it (currently at 67,000+).

 

[Ital]

I could be wrong, but I think a Model 3 is a great opportunity for new owners as of now.
I think with tax and all with the incentives if you qualify the actual cost of the car would be around $33k.
MSRP 43k, minus the $7,500 federal tax credit and minus another $2,500 from most local state programs
I think in 3 years from now most should be able to get that back, so it's like driving a car free for 3 years...

 

[aparan]

It is going to be two months since Tesla slashed prices in January. There was further $500 reduction in Feb also. Model 3 (Even Model Y) used car prices are still holding up good and are even higher than than buying new. With Tax rebates, a RWD Tesla is $37K ($42.9 + Destination etc - $7.5K Tax rebate). Waiting times are much lower also.
Agree that high income folks ( Single $150K, married couples filing jointly $300k etc) will not quality for tax rebates. Also, there will always be someone who wants the car the very next day. By and far, I assume this number should be low.

While I don't know the actual sales price of these cars, listing prices seem to suggest that owners are expecting higher dollars than the new ones. What is going on Tesla used car market?

 

[Npate2]

It is going to be two months since Tesla slashed prices in January. There was further $500 reduction in Feb also. Model 3 (Even Model Y) used car prices are still holding up good and are even higher than than buying new. With Tax rebates, a RWD Tesla is $37K ($42.9 + Destination etc - $7.5K Tax rebate). Waiting times are much lower also.
Agree that high income folks ( Single $150K, married couples filing jointly $300k etc) will not quality for tax rebates. Also, there will always be someone who wants the car the very next day. By and far, I assume this number should be low.

While I don't know the actual sales price of these cars, listing prices seem to suggest that owners are expecting higher dollars than the new ones. What is going on Tesla used car market?

Two things I would say! Seems like owners can’t swallow the “overnight” depreciation on their cars as they are too high for many owners who purchased in 2021/2022. This means they will try to get as much for their car as they can so I would assume that is keeping the pricing high. Second, usually around this time in the year used car prices are strong due to tax refunds coming through, and people having “extra” money to spend on items like a car. This is why I think the prices haven’t decreased as quickly as they should have but at some point they will. Especially with subprime borrowers having the highest delinquencies in the last 20? Years or so.

 

[aparan]

It is understandable that current owners will find it difficult to swallow the price reduction on their cars. What I am surprised is about the asking price people demand when you can get a Model 3 for $37K.

Without someone willing to pay prices in that higher range, why would people put those kind of prices? I have to assume that there is a market out there willing to pay higher prices?

 

[Npate2]

It is understandable that current owners will find it difficult to swallow the price reduction on their cars. What I am surprised is about the asking price people demand when you can get a Model 3 for $37K.

Without someone willing to pay prices in that higher range, why would people put those kind of prices? I have to assume that there is a market out there willing to pay higher prices?

Likely because some people can’t wait for delivery times or are not fully informed about the tax incentives (or don’t qualify). Also just because you can get one for 37K brand new doesn’t mean it will have the exterior/interior color and packages people desire (these will drive the cost for a new vehicle up if you add these items in). You also still have to pay sales tax on the new vehicle.

On the other hand though, many states require sales tax on used vehicles. Also most people do not pay cash for a purchase this large and will likely finance. New cars have better financing terms which can cost less over time. Plus you get a brand new car and full warranty on the vehicle.

Personally for me, I would buy new and use the tax credit since I qualify compared to purchasing a used vehicle (with some battery degradation, less warranty, etc.) for 20% off.

 

[aparan]

Not sure when Tesla will start taking orders for Long Range AWD. What is the price difference between RWD and Long Range AWD versions? Based on some old price comparisons, I see close to $9K difference. Can anyone comment. Thanks

 

[Npate2]

Not sure when Tesla will start taking orders for Long Range AWD. What is the price difference between RWD and Long Range AWD versions? Based on some old price comparisons, I see close to $9K difference. Can anyone comment. Thanks

There is a google document that goes through pricing histories for Tesla cars that can be found here:

Tesla Car Price History - Google Drive

docs.google.com

If I were to put an estimate at how much the LR AWD M3 would cost in the future it would probably be right around 49K. That would sit slightly under performance but above SR+, which would make it an attractive price for people to upgrade.

 

[aparan]

There is a google document that goes through pricing histories for Tesla cars that can be found here:

Tesla Car Price History - Google Drive

docs.google.com

If I were to put an estimate at how much the LR AWD M3 would cost in the future it would probably be right around 49K. That would sit slightly under performance but above SR+, which would make it an attractive price for people to upgrade.

Thanks. This is really useful. As I see it, from approx $11k difference in 2022, it is $6K difference now between RWD and LR AWD