Federal Tax Credit Rules - Will drive Model Y price down to $54,000

[MacO512]

I'm really surprised at this Tesla must be in a bad situation to make such a dramatic price decrease. They are obviously trying to appeal to the lower price points by making the seven seat option now. $4,000. They also switch back to only giving you white for free. Midnight silver metallic paint is now once again $1,000 extra

Strangely still no 7 seat option on the performance model. So the performance model does not qualify and has no way to qualify for the federal tax credit.

I don't think Tesla is in a bad situation now; any more than they were in a great situation during the insane temporarily 2021/2022 new car shortage bubble. Yes prices went up like crazy, but everyone knew that eventually would end.

Tesla still will have huge profit margins on cars and can easily afford to lower prices. Their supply chain costs and shortages appear to be vastly improved in the upcoming year.

Now the legacy ICE makers and United Auto workers? Those are the entities in real danger the next decade.

 

[Daekwan]

I'm really surprised at this Tesla must be in a bad situation to make such a dramatic price decrease. They are obviously trying to appeal to the lower price points by making the seven seat option now. $4,000. They also switch back to only giving you white for free. Midnight silver metallic paint is now once again $1,000 extra

Strangely still no 7 seat option on the performance model. So the performance model does not qualify and has no way to qualify for the federal tax credit.

Yep. And of course the Performance model is the only one I would trade my ‘21 MYSR for.

 

[Sunshine Speed]

Yep. And of course the Performance model is the only one I would trade my ‘21 MYSR for.

I think another round of price cuts is coming in 8 weeks, in mid-March, for end of quarter. Will likely include $3K price drop on Y Performance to qualify for tax credit, and $3K price drop on YLR so that any config with wheels/colors/tow will qualify. And price cut on Austin Y 4680 too, but will depend on how fast the ramp is.

 

[Daekwan]

I think another round of price cuts is coming in 8 weeks, in mid-March, for end of quarter. Will likely include $3K price drop on Y Performance to qualify for tax credit, and $3K price drop on YLR so that any config with wheels/colors/tow will qualify. And price cut on Austin Y 4680 too, but will depend on how fast the ramp is.

Would certainly be nice to get the MYP + tax credit. That said I’m in no rush to buy. I’m satisfied with my car.. and didn’t trade it when it was valued at $20K more than I paid for it. So you can imagine what type of deal it would take to move me off the fence.

Also what I’d really see before getting a new Y.. is an actual new Y!! The current design is now 4 years old and only available with the exact same paint, interior and wheel options. I honestly can’t tell a 2020MY from a 2023MY.. new ones look exactly the same as the old ones. While a lot has changed with the underlying structure and gigacast subframe.. everything that customer sees both inside & out still exactly the same. You would think at this point things like ventilated seats.. a color HUD.. or even 360 Birds Eye view would have been added. If anything Tesla has now removed more, than they’ve added. Atleast the new Europe/Asia versions get 2 new paint choices. At a minimum I would atleast wait for the HW4 before considering another Y.

Just seems wasteful to trade an old Y.. for a new Y. Or wait for the Cybertruck launch. Rather than buy a new Y.. If I really got the itch could sell my ‘21 MYSR privately.. and buy someone else’s ‘21 MYP w/FSD on fire sale. That way I atleast get battery, range, Performance & FSD software upgrade for a significantly lower price.. although still basically drive the same vehicle.

 

[David2023]

1) A federal tax credit of $7500 on Model Y is too juicy for Tesla to pass up. Will massively drive up sales if Model Y qualifies.
2) IRS has confirmed that the 5-seater Y does not qualify as SUV because the 5-seater version weighs under 6000 pounds and ground clearance is under 8 inches.
3) Therefore Tesla will now drop the price of Model Y to $54,000 to ensure that it's under $55,000 MSRP limit for non-SUV hatchbacks including paint color choice.
4) Don't believe me? Model Y Long-range was selling for $49,000 in early 2021. So they can DEFINITELY sell it for $54,000, with raw material prices decreasing now. Especially if they can sell the standard-range version instead.

Next steps : Austin Texas factory production ramps up, Model Y inventory keeps increasing, Tesla drops price of Y to $54,000 in March or June.

After the massive price cut news, I saw this prediction just now and shocked to see how accurate your thought was. You are a genius!

 

[Sunshine Speed]

After the massive price cut news, I saw this prediction just now and shocked to see how accurate your thought was. You are a genius!

I'm definitely no genius, just studying Tesla awhile then lucky on this prediction. With that said - my next predictions are interest rates staying high, housing and economy weakening, further $3K price drops for Model Y in March across the board for end of quarter, then introduction of HW4 cameras and radar, then Model X 5-seater drops from $110K to $80K at end of June to get access to federal tax credit.

 

[vickh]

I'm definitely no genius, just studying Tesla awhile then lucky on this prediction. With that said - my next predictions are interest rates staying high, housing and economy weakening, further $3K price drops for Model Y in March across the board for end of quarter, then introduction of HW4 cameras and radar, then Model X 5-seater drops from $110K to $80K at end of June to get access to federal tax credit.

Any predictions on used X. I'm seeing them around $50K?

 

[240vPlug]

I don't think Tesla is in a bad situation now; any more than they were in a great situation during the insane temporarily 2021/2022 new car shortage bubble. Yes prices went up like crazy, but everyone knew that eventually would end.

Tesla still will have huge profit margins on cars and can easily afford to lower prices. Their supply chain costs and shortages appear to be vastly improved in the upcoming year.

Now the legacy ICE makers and United Auto workers? Those are the entities in real danger the next decade.

Will be interesting to watch. I'm getting my popcorn

 

[zambono]

good hypothesis, they need to go down to $45k

 

[SageBrush]

It has been a crazy two years.
I started out with a 2018 Model LR and a 70 mile range Nissan LEAF

I'll end up now with a 2023 Model Y LR/AWD and $3,500 in my pocket

 

[vickh]

It has been a crazy two years.
I started out with a 2018 Model LR and a 70 mile range Nissan LEAF

I'll end up now with a 2023 Model Y LR/AWD and $3,500 in my pocket

How so? Looks like you gained from all the craziness in the used market?

 

[SageBrush]

Looks like you gained from all the craziness in the used market?

Indeed.

It's over, and I don't expect a repeat in my lifetime.

 

[vickh]

Getting ready to pull the trigger on a Y option. Can I no longer self refer? I only see solar:

Order Tesla Products with Vick's Referral

Use my referral link to purchase a Tesla product and get Credits you can redeem for exclusive awards like Supercharging miles, merchandise, and accessories.

www.tesla.com

If not any + incentives to order thru store?

 

[sairambabloooo]

I'm definitely no genius, just studying Tesla awhile then lucky on this prediction. With that said - my next predictions are interest rates staying high, housing and economy weakening, further $3K price drops for Model Y in March across the board for end of quarter, then introduction of HW4 cameras and radar, then Model X 5-seater drops from $110K to $80K at end of June to get access to federal tax credit.

Can you let us know your stock portfolio
Excellent prediction and reasoning. Hoping your March prediction would come true, although I would like to see radar included by that time and will be ready to hit the buy button

 

[Daekwan]

I think the writing is on the wall for March. And it's not necessarily due to battery language in the new IRA.. but the fact that Model Y's priced over the $55K mark still aren't moving. Its crazy to think just a month ago.. $65K was the starting price but now nobody wants one even a $55,490 because it no longer qualifies for the additional $7,500 tax credit.

Just seems like at this point Tesla has already gone 90% with the pain. Might as well go the full 100% and drop the price on options so that every 5 seater LR qualifies for the full $7,500 credit. In reality, paint is nothing but mark up anyways. And the optional 20" Induction wheels or tow hitch can always be sold after the initial purchase.

 

[Suns_PSD]

1) A federal tax credit of $7500 on Model Y is too juicy for Tesla to pass up. Will massively drive up sales if Model Y qualifies.
2) IRS has confirmed that the 5-seater Y does not qualify as SUV because the 5-seater version weighs under 6000 pounds and ground clearance is under 8 inches.
3) Therefore Tesla will now drop the price of Model Y to $54,000 to ensure that it's under $55,000 MSRP limit for non-SUV hatchbacks including paint color choice.
4) Don't believe me? Model Y Long-range was selling for $49,000 in early 2021. So they can DEFINITELY sell it for $54,000, with raw material prices decreasing now. Especially if they can sell the standard-range version instead.

Next steps : Austin Texas factory production ramps up, Model Y inventory keeps increasing, Tesla drops price of Y to $54,000 in March or June.

Could I get your lottery ticket picks?

Thanks in advance for making me a millionaire.

 

[patmurphey]

...Just seems like at this point Tesla has already gone 90% with the pain. Might as well go the full 100% and drop the price on options so that every 5 seater LR qualifies for the full $7,500 credit. In reality, paint is nothing but mark up anyways. And the optional 20" Induction wheels or tow hitch can always be sold after the initial purchase.

I think they've gone as far as they needed to for the short time it's $7,500, allowing just a few options for the credit. the difference won't be so important for options or for the YP after the credit drops to $3,750. The new prices are low enough to be pretty good with lower or no credits.

The price drop was for two reasons, meeting the BS/SUV rule and protecting sales volume and expansion during an upcoming recession.

Pressure to fix the SUV definition problem will have to come from Ford, Tesla has dealt with it and VWs were already cheap enough anyway.

 

[patmurphey]

I guess the price drops affect others, too. The discount on the Model S Plaid most have influenced my local Audi dealer. they just offered $8.500 off MSRP on an in stock eTron GT RS.

 

[TomServo]

Just when the other guys thought they had Tesla in their sights, Tesla pulled the rug out from under them. Tesla has even gotten around the IRS slight. Bravo Elon

 

[vickh]

I guess the price drops affect others, too. The discount on the Model S Plaid most have influenced my local Audi dealer. they just offered $8.500 off MSRP on an in stock eTron GT RS.

wow and so it begins. Execute order 66!

I'm going to try my Audi dealer too I wonder if they'll do it on base MSRP and few/no options though ( if I I can wait and custom build eTron or was that an inflated price in stock eTron GT?