February 23, 2024

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Tesla is cutting Model Y prices for a limited time — at least for now

Tesla is cutting Model Y prices for a limited time — at least for now

Tesla (TSLA) will offer reduced prices in the United States for two variants of the Model Y, but only through February, the electric car giant announced on Saturday.




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The base Real Wheel Drive Model Y gets a $1,000 discount to $42,990. The all-wheel-drive Model Y is also reduced by $1,000 to $47,990. Model Y performance remains unchanged at $52,490. This is before the $7,500 federal tax credit.

While the Tesla Model Y sale officially ends after February 29, it is possible that it will be extended or made permanent. Tesla typically ramps up incentives at the end of the quarter. Model Y inventories are also relatively high in the US, where Tesla has already reduced Model Y inventory by more than the temporarily reduced list price. Meanwhile, Tesla's Austin factory is operating well below its official capacity.

In January, Tesla modestly reduced its prices in China for some Model Y models as well as the Model 3, followed by larger Model Y price cuts in Europe.

Demand for electric vehicles is generally slowing. Friday, Rivian (Raven) reduced the prices of its base model, the R1T pickup and R1S SUV, by $3,100, to $71,700 and $76,700, respectively.

Tesla has not cut prices for the new Model 3 in the US, with production limited at its Fremont factory. In fact, Tesla raised the price of its Model 3 Long Range by $1,000 to $56,990 on February 4.

The Model 3 is no longer eligible for the $7,500 tax credit, due to stricter guidelines on battery sourcing. This means that it is often much cheaper to buy a Model Y than a Model 3.

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Tesla shares

Tesla stock rose 3% to 193.57 last week, retreating from its worst levels in nearly nine months. Rivian stock jumped 6.9% to 16.68, rebounding from nearly recent lows.

Please follow Ed Carson on topics at @edcarson1971 And X/Twitter at @IBD_ECarson For stock market updates and more.

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