In what is likely not a surprise, Tesla has once again increased the prices for the Model 3 and the Model Y. Known for cars that are on the pricier side, both for the initial purchase, and if you have to have any repairs done, Tesla is still the leader in the EV market. It’s also famous for coming up with ‘Easter Egg’ features. Unfortunately, it has also recently become famous for increasing prices and not necessarily adding anything of value to the car. And the Tesla Model 3 and the Tesla Model Y have had the most price jumps.
The Tesla Model 3 and Model Y prices jump . . . again
According to Electrek, Tesla increased the prices of both models for the fourth time in as many months. This particular price increase did come with some slight upgrades to the interior, but only in the Tesla Model 3. All trims of both models had an increase of $500, which is less than the $10,000 increase the Model S Plaid+ had in March, according to Electrek.
Even though Tesla has complete control over pricing, which many see as a positive, the automaker changes prices frequently, which is frustrating to some.
Chip shortage and slower delivery times
A possible reason for the recent price increases could be due to a global semiconductor chip shortage, and as CNET reports, this is not a problem unique to Tesla, Apple and Microsoft are among many companies facing this shortage.
The chip shortage has also produced other problems, with the production of the Tesla Model 3 briefly going offline, though this is not confirmed to be due to the shortage. One area that has definitely been impacted by the shortage is delivery times, with the Tesla Model 3 and the Tesla Model Y both extending to up to 12 weeks.
History of the Tesla Model 3’s pricing
Car and Driver reported on, in their own words, the “Model 3 pricing saga” with a detailed timeline that does actually read like a saga. Starting way back in 2016, Elon Musk promised the Model 3 would only be $35,000; however, the first Model 3 was released in 2017 with only the most expensive trim, the Long Range AWD with a Premium Interior option, being available and starting at a price of $50,000.
It was not until February 2019 that the cheapest trim, the Standard Range, was released, which was priced at $35,000, plus a $1,200 destination charge. Two months later, in April, the Model 3 Standard Range was removed from online ordering and would only be available at a physical Tesla store as a special order. In May of the same year, the price jumped to $36,600 only to be lowered again in July, still 2019, to $36,200, the original price including the destination charge.
Since July 2019, the price of the Standard Range has increased to $38,490, and the highest trim, the Model 3 Performance, going up to $56,990. The Long Range AWD is now priced at $47,490, though this does not include the Premium Interior option.
As Tesla does not operate a public relations department, they do not field any questions on price increases, so much of what is reported, as far as reasons, is speculation unless Musk announces something specifically.
While it’s still the leader in the EV market, Tesla’s constant price fluctuation, without any information or transparency, can become frustrating. The frequent changes are also difficult to follow. But in all honesty, does any of this come as a big surprise?