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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What’s Coming Next in Tesla FSD V14

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With FSD V13.2.6 continuing to make its way to AI4 vehicles, Tesla has been on a streak with minor FSD improvements since the launch of FSD V13 just a little over two months ago. 

FSD V13 brought a new slate of features, including Start FSD from Park, Reverse, and Park at Destination. It also introduced full-resolution video input using the AI4 cameras at 36hz and made use of the new Cortex supercomputer to get faster and more accurate decision-making.

So, what’s next with FSD V14? Tesla gave us a sneak peek at what’s next for FSD.

FSD V14

The standout feature of FSD V14 will be auto-regressive transformers. While that’s a complex term for those unfamiliar with AI or machine learning, we’ll break it down.

Auto-Regressive

An auto-regressive transformer processes sequential data in time, using that information to predict future elements based on previous ones. Imagine completing a sentence: You use the words already written to guess what comes next. This process isn't just about filling in the blank; it's about understanding the flow of the sentence and anticipating the speaker's intent.

FSD could analyze a sequence of camera images to identify pedestrians and predict their likely path based on their current movement and surrounding context. The system's auto-regressive nature allows it to learn from past sequences and improve its predictions over time, adapting to different driving scenarios.

Today, FSD reacts to what it sees, but soon it’ll be able to anticipate what will help, much like humans.

Transformers

The second part of that term is transformer, which is a component used to understand the relationships of elements inside a time sequence. It identifies which parts of the input are most crucial for making accurate predictions, allowing the system to prioritize information much like a human would. Think of it as weighing different pieces of evidence to arrive at a conclusion. For example, a transformer might recognize that a blinking turn signal is more important than the color of the car when predicting a lane change.

Putting It Together

Putting all that together, Tesla’s use of auto-regressive transformers means they’ll be working on how FSD can predict the plans and paths of the world around it. This will improve FSD’s already powerful perception and allow it to predict how other vehicles and vulnerable road users (VRUs) will behave.

What it all comes down to is that FSD will be able to make better decisions and plan its paths by making more informed, human-like decisions. That will be a big step towards improving V13 - which already has some very effective decision-making.

Larger Model and Audio Input

Tesla stated that FSD V14 will see larger model and context sizes, which coincidentally are listed in the upcoming improvements section of FSD V13.2.6.

Interestingly, Tesla says that context size is restricted by AI4’s memory, so it’ll need to be optimized. Tesla is already gathering audio data, and FSD V14 will be the first version to take advantage of it.

FSD V14 Release Date

We haven’t heard from Elon Musk or Ashok Elluswamy (Tesla’s VP of AI) about when FSD V14 will arrive. Ashok previously stated that FSD V13.4 would see audio inputs being used, but at Tesla’s earnings call, Musk said that audio input would become relevant in V14. It seems like Tesla may have scrapped V13.4 for V14.

Since Tesla is planning to launch their Robotaxi network in Texas this June, FSD V14 may be the version used for their autonomous taxi fleet.

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Want to See the New Tesla Model Y? Here's Where It’s on Display

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Tesla’s refreshed Model Y has started hitting display and Tesla showrooms across North America and Europe, where you can now get up close and personal with the new Model Y and all of its improvements, including the smallest of details.

The refreshed Model Y surprised all of us by sporting its own unique look instead of just being a stretched-out Model 3. While it’s available to order now through the Launch Edition, which includes FSD and Acceleration Boost, deliveries won’t start for another couple of months.

The new front light bar and rear indirect lights make the vehicle unique and worth checking out. There are plenty of new items to check out in the updated interior as well, including new door panels, powered rear seats, and more.

Here’s where you can check out the new Model Y in North America and Europe:

North America

In North America, the updated Model Y can be seen in 19 showrooms across the United States and Canada. The photo below shows the 17 locations in the U.S. and two in Canada. We expect this list to grow as Tesla produces more vehicles and we get closer to the official launch.

New Model Y Displays in North America

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Europe

In Europe, the Model Y is already on permanent display at two locations - the Mall of Berlin in Germany, and at Tesla’s Amsterdam Europe Headquarters - both publically accessible. If you’re in the area, definitely drop by and take a look.

Tesla is also holding special events throughout Europe where they’ll be showing the new Model Y through select dates. place to check if you’re far away from the ones above is on Tesla’s Events List.

We recommend checking Tesla’s page to confirm any dates, as Tesla will be adding new locations until each showroom receives its permanent display vehicles.

Tesla will also be visiting major auto shows, including the Toronto and New York International Auto Shows with the new Model Y - so keep an eye out for those events as well.

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