BUSINESS

Tesla Raises Price on Model Y

January 24, 2023

Just days after dramatically slashing prices and sending resale values into a tailspin, Tesla has quietly raised prices on its Model Y.

According to the brand’s website, Tesla has issued a relatively minor-seeming, $500 price increase for the Model Y Dual Motor AWD, putting the starting price of the MYDM at $53,490 — a number that’s still significantly more affordable than the $65,990 price point that Tesla would have cost you just last month. It’s a small shift, sure, but it begs the question: does Tesla have any idea what it’s doing?

$500 Tesla Price Hike

Even at the new new price, which is $500 higher than the old new price, the Tesla Model Y Dual Motor AWD still qualifies for the full $7,500 EV tax credit outlined the Inflation Reduction Act of 2022 (IRA). With that incentive in place, the Model Y Dual Motor AWD nets out at “just” $45,990, which represents a $20,000 savings from the car’s recent highs. As such, demand is likely to remain unaffected by the relatively small price bump.

We have to ask, though, why raise the price at all? Surely a company as advanced and intelligent and Tesla knows what it needs to get out of each vehicle and priced its products accordingly to help boost demand, and this wasn’t some kind of ill-conceived, knee-jerk reaction to boost deliveries and cut back on inventory ahead of an earnings call … right?

The move certainly boosted demand, and pushed used car values low enough that outlets like CarMax sold more than 50% of its Tesla inventory in just 24 hours after the prices bottomed out …

UPDATE: Carmax sold 57% of its ENTIRE Tesla inventory in the past 24 hours 🤯 https://t.co/msjHMjJADi
— CarDealershipGuy (@GuyDealership) January 15, 2023

… but, as for whether or not this is exactly what was supposed to happen and not some kind of weird side effect that’s going to damage the long term value of the “premium” Tesla brand is probably above our pay grades.

What do you guys think? Is this more brilliant, ten-dimensional chess from Tesla’s genius CEO, Elon Musk, or is this sort of think just what happens when you let the engineers make accounting decisions? Let us know what you think of Tesla’s recent back and forth on Model Y pricing in the comments section at the bottom of the page.