Tesla's new base Model Y trim cuts price by $3,750 from previous base

Tesla Inc. introduced a new base trim of the Model Y, pushing down the price of admission for the popular crossover by $3,750 to $45,630 with shipping, according to the automaker's U.S. website.

The new Model Y variant appeared on Tesla's online configurator after the EV maker reported third-quarter global deliveries Monday that came in lower than the preceding quarter. Tesla blamed factory downtime.

The entry-level Model Y has a single motor driving the rear wheels and 260 miles of range — a relatively low number for a Tesla vehicle. The previous base Model Y had two motors, all-wheel drive and 279 miles of range before it disappeared from Tesla's website last month.

Tesla said the new base Model Y qualifies for the federal tax credit of $7,500 for EV buyers who qualify. The EV incentive comes with income limits and other restrictions.

The new variant may be using a more inexpensive lithium ion battery, similar to the one used in the base Model 3 sedan, which starts at $41,880 with shipping and has 272 miles of range. The base Model Y accelerates to 60 mph in 6.6 seconds, Tesla said, which is relatively slow for a Tesla vehicle.

"This is positive since good for volume," said Gary Black, managing partner at The Future Fund, in a social media post Monday night. "Not a price cut since many Y buyers won't want rwd or 0-60 in 6.6 seconds. Value for the money," Black said on X, formerly Twitter. Black is bullish on Tesla's stock price.

For Model Y buyers who are able to take advantage of the full federal EV credit, the base Model Y's price could effectively fall to $38,130 with shipping, a huge discount compared with the least expensive Model Y a year ago. State EV incentives could further lower the effective price.

In mid-January this year, Tesla slashed the starting price of the Model Y Long Range trim, the most inexpensive at the time, from $67,440 with shipping to $54,630 with shipping. The automaker also became newly eligible for the $7,500 EV incentive on Jan. 1 after losing access to it in 2020 after reaching its quota.

Tesla has repeatedly cut prices across its lineup this year. The current Model Y Long Range, with 330 miles of range, starts at $52,130 with shipping, according to Tesla's website.

The automaker's price cuts have been effective at maintaining strong sales growth in the U.S.

In a third-quarter sales forecast last week, Cox Automotive estimated that Tesla deliveries grew 30 percent in the January-September period compared with the same period last year to 509,694 vehicles. That was good for 4.4 percent of the U.S. light-vehicle market and about 60 percent of the EV market, Cox said.

Tesla does not break out sales by country or region.

Tesla CEO Elon Musk said during an earnings call in July that the automaker was willing to sacrifice profits for volume. Tesla's growth target is a 50 percent increase in sales every year for the foreseeable future.

The automaker's sales goal for this year, globally, is 1.8 million.

On Monday, Tesla said it delivered 435,059 vehicles in the third quarter, down 7 percent from the prior quarter but up 27 percent compared with third-quarter 2022.

In the January-September period, Tesla reported deliveries of just over 1.3 million, leaving about 475,000 to deliver in the fourth quarter to meet its 2023 sales goal.

The automaker attributed its weaker third-quarter sales performance to factory downtime for plant upgrades, which constrained vehicle supply. Tesla has auto factories in California, Texas, China and Germany.

Tesla's China plant introduced an updated version of the Model 3 in August. Tesla's Texas plant is preparing for the launch of the Cybertruck pickup in the fourth quarter.

"A sequential decline in volumes was caused by planned downtimes for factory upgrades, as discussed on the most recent earnings call," Telsa said in a press release Monday.