Tesla Reduces Price of Model 3 and Model Y, Now Starting at $31,490 After Incentives

Tesla has reduced the price of the Model 3 and Model Y

Tesla

Tesla's Model Y has decreased its price by 25 percent in less than a year. This is after yet another round of price cuts for the most popular SUV EV of all time, the Model Y, and the most popular EV sedan, the Model 3.

Strategic or Sacrafice?

The latest cuts came days after Tesla missed earnings; however, the company had shut down some lines for retooling over the summer. Also, the new Model 3 is believed to have prevented a lot of would-be buyers. BYD, the Chinese car maker, is hot on Tesla's heels, delivering almost the same number of EVs in the last quarter.

This maneuver may be Tesla's commitment to lowering prices. Prices increased during the pandemic and for months after as the company experienced supplier bottlenecks. Now, that doesn't seem to be a problem. Combine that with Tesla's focus on more efficient production, and you can see that the company may be passing savings on to its customers.

Price Cuts: By the Numbers

The biggest headline is the Model 3 Performance's price, which now starts at $50,990, a reduction of $2,250. This variant, known for its zesty Track Mode, agile handling, and a jaw-dropping 0-60 mph sprint of 3.1 seconds, has become an even more compelling option for enthusiasts and EV adopters.

Similarly, the Model Y isn't lagging in the price war. The Model Y Long Range, which in December 2022 had a price tag of $65,990, has now been slashed to $48,490. Sawyer Merrit draws a comparison with other vehicles in the market. In a compelling post, he noted the Honda CR-V Sport Touring Hybrid is priced at $39,500 and the Toyota RAV4 Hybrid Limited at $39,530. However, with the Inflation Reduction Act's federal tax credit of $7,500 for eligible buyers, the Model Y Long Range's effective price plunges to $40,990, effectively undercutting its competition. Similarly, the Model 3 RWD, post-tax credit, could be snagged for a mere $31,490.

We are now into the fourth quarter; Tesla's objective appears clear: boost sales and amplify its market dominance in the United States. These cuts might be the precise catalyst needed to entice more consumers, especially considering the added allure of the federal tax credits.

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Tesla Reveals How It Tests FSD - A Series of Videos

Not a Tesla App

Tesla has published a 16-post series covering a wide range of unique scenarios against which the company tests each FSD release. Tesla’s VP of AI, Ashok Elluswamy, also provided some additional context, which we’ll cover below.

These scenarios could be difficult for a regular driver to respond to and are a good demonstration of FSD’s capabilities. Let’s take a look at all the different scenarios that Tesla regularly tests against. According to Ashok, these tests are only one of 10 ways Tesla validates their software. These tests were done against FSD v12.5.6.3, the HW4 build that’s on approximately 20% of the fleet.

We’ve embedded each video below and also provided some additional information.

1. Reverse Cut-in (Occluded)

This first test is for a car reversing out of a parking space, while occluded (vision blocked) by another car or obstacle. In the test, the Model Y notices the incoming car and then brakes with space left over.

2. Peeking (Occluded)

In this video, it's hard to even spot the car on the right that’s “peeking” forward—it's occluded by bushes on the side of the road. FSD notices and stops in time to let the other vehicle safely pass.

3. Left Turn Cut-in

An incoming vehicle that takes a left turn to enter the same lane of travel as FSD - spotted, stopped, and then continuing smoothly. In the second shot, you can see FSD left a considerable amount of space to let the vehicle cut in.

4. Parallel Cut-in (Occluded)

This is honestly one of the most common scenarios on a highway - someone cuts in while obscured into your lane of travel. Once again, FSD does its thing with plenty of space to spare.

5. Yield for Oncoming During Overtake

FSD’s path planner plans an overtake around a stationary vehicle here, sees the oncoming traffic, and politely waits its turn to continue. This is another everyday scenario, especially on urban and suburban streets.

6. Stop Sign Right-of-Way Violator

There are a surprising number of people who don’t know how stop signs work. However, FSD does know how they work and also knows what to do if others act unpredictably. This is one of the best demonstrations of FSD’s capability to react quickly and effectively to unpredictable behavior on the roads.

7. Door Opening During Overtake

Another overtake scenario, but this time the vehicle being overtaken throws open its door into traffic. Not necessarily the wisest of moves, but humans are unpredictable. Good to see Tesla working to save its vehicles from both hitting the door or having the door hit with its new Blind Spot Monitoring While Parked feature.

8. Right Turn Harsh Braking

This scenario is another common one - someone is taking a right turn, and you expect them to complete the turn, but they go ahead and slam on the brakes. Here, FSD brakes in time - using Automatic Emergency Braking - and then continues safely. Tesla has been working to improve AEB and the scenarios it can react to - and these are all a part and parcel of FSD’s real-time and active safety features.

9. Left Turn Across Path

This one is pretty clean-cut - someone takes a left turn even though you’re on your way through the intersection. This particular accident is one of the most common - 53% of cross-path accidents involve a left turn through an intersection where a side impact will be lethal. FSD can make a big difference - over 8,000 people die in North America alone in this particular scenario.

10. Cut-Out to Static Cone

Here, FSD smoothly reacts to an object on the road as the vehicle ahead dodges it. We’d love to see this scenario done with different types of objects or debris, as this is another common item - especially with roadkill on country roads. A good demo of FSD’s collision avoidance maneuvers too!

11. Dynamic Debris (Dropped Cone)

Taking it one step further, FSD successfully notices, slows down, stops itself from hitting the bouncing cone, and then makes it around safely. If you’ve ever seen someone strap something down in the bed of a pickup and forget to say “This ain’t going anywhere” - this is that exact scenario.

12. U-Turn Cut-in (Occluded)

Another high-speed occluded cut-in, this time for a vehicle making a U-Turn from an oddly shaped intersection. FSD started braking the moment the first couple pixels of the Model Y were beyond the bush occluding vision. With a human’s reaction time, this would have resulted in a T-bone.

Ashok Elluswamy, Tesla’s Director of AI - mentioned that this is possible because of low latency and high intelligence - combined together, it enables FSD to make a threat assessment and decide what to do, very quickly. It also considers the potential of a rear-end collision - and there is collision avoidance baked into that decision-making.

13. High-Speed Cut-out to Stationary Vehicle

Similar to the cone cut-out, this one happens at 73mph (117km/h)! FSD sees the car dodging, notices there’s an obstacle, and moves out of the way without dropping speed.

14. High-Speed Harsh Braking

Another common scenario - in fact, the number one reason why pileups occur on highways is the harsh, sudden braking of vehicles in front. FSD once again notices and comes to a safe stop here.

15. High-Speed Stationary Child

Tesla has been previously greatly criticized for its ability to come to a safe stop for children playing on the road. Here, Tesla is demonstrating its capability of doing so - once again with highway speeds of 73mph. 

16. High-Speed Crossing Child

And to really make the point - it can do it with a crossing child too. Tesla has made a strong commitment to safety for vulnerable road users, and this is a good way to show how it works.

That’s a lot of unique scenarios that Tesla tests against - and each and every build has to be vetted against this huge list of different safety tests in order to ensure that the build that ends up in customer hands is as safe as possible. With FSD v13 looking like it's coming soon, we’re excited to see where this takes Tesla next. 

With Musk announcing that FSD v13 is coming soon, it really is starting to feel like Unsupervised FSD and Robotaxi could be pushed out sometime next year.

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Musk Confirms FSD V13 is Coming Soon

Not a Tesla App

Tesla announced an updated roadmap for FSD in late October. With it, they announced that FSD v13, the one that’s expected to make Unsupervised FSD feature complete (although not 100% reliable), would start being sent to employees by the end of the week.

We have yet to see any hints or sightings of employees testing FSD v13, but Elon Musk has now stated that FSD v13 is coming soon.

It sounds like Musk is talking about the employee release as it usually does, but it’s not immediately clear. Tesla originally predicted that select owners would receive FSD v13.3 around Thanksgiving.

Musk also mentioned that FSD v13 is trending to be about 500% better than the current build of v12.5.5.3 on the Cybertruck. If that’s true, Unsupervised FSD is just a regulatory leap away, rather than a technical or training challenge. However, let’s remember that Musk has often thrown out these vast improvement numbers that don’t appear to materialize when the update rolls out to customers. There’s no doubt that FSD v13 will be a big milestone and have several new features, such as Autopark at destination_, Unpark and more, but the much lower miles per intervention will likely come in later revisions.

Tesla has already seen drastic improvements this year, moving from V11.4.9 to v12.3.6, and then more recently to V12.5.4.2. Each successive build has had major improvements in how FSD is able to react and respond in real-time while also becoming smoother and safer.

We’re in for some exciting times as an even better FSD version makes its way to customers soon. And in order to really make the point, Tesla has also shown off how they conduct FSD Safety Testing in a series of videos, which we’ll include below.

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