Tesla has updated its US website to add a cheaper Model Y RWD with a base price of $43,990, which after incentives could make it the cheapest Model Y ever available in the US.
The new model “replaces” the Model Y AWD, the previously cheapest trim level with a base price of $47,740, which was unexpectedly discontinued last month.
However, since this model is rear-wheel drive rather than all-wheel drive, one less engine is a money saver for those who don’t need two. It also appears to use a cheaper battery.
As a result, the new Model Y RWD starts at $43,990, making it $3,750 cheaper than the version discontinued last month. Additionally, the model still qualifies for the US Electric Vehicle Tax Credit of $7,500, making the base price after the credit $36,490.
The new model appears to use Tesla’s cheaper lithium iron phosphate (LFP) battery.
LFP batteries are cheaper and longer lasting than the more common nickel-manganese-cobalt (NMC) cells, but have a lower energy density and therefore a shorter range for a given weight/volume of the battery. They also have the advantage of not using cobalt, which is a conflict mineral.
The new ‘Standard Range’ Model Y is quoted as having a range of 260 miles, as opposed to the previous AWD ‘Standard Range’ which had a range of 279 miles, which we believe is due to the switch to LFP batteries.
However, due to LFP’s longer shelf life, it is recommended to charge the battery to 100% every night, as opposed to the recommended daily charge of 90% for NMC sales. So except for occasional road trip purposes when the NMC car is 100% charged, range is kind of a wipe (although that’s the only time big range numbers even matter). Or in cold climates, where LFP tends to perform worse than NMC.
In addition, the new model achieves a 0-60 second acceleration of 6.6 seconds, compared to 5.0 seconds for the previous Y AWD model. And another difference: the 7-seater configuration is not available on the Model Y RWD.
The standard LFP battery Model Y range has been available in China since 2021, and Tesla just updated it yesterday, giving the base model a 0-100km/h time of 5.9 seconds, up from the previous time 0 to 100 km/h in 6.9 seconds (what). would almost match a 0-60 time of 6.6 seconds.
So it’s a little strange that the “new” US model seems to resemble the “old” China model, at least for now.
Tesla has also been selling an LFP Model Y in Canada since the beginning of the year.
Cheapest US Model Y ever?
This post-incentive price of $36,490 is likely the cheapest price for the Tesla Model Y in the US to date.
Tesla had previously offered the Standard Range for $39,990, but did not qualify for the tax credit at the time because Tesla’s credits had expired under the previous law. Additionally, it was only available for orders on the site for a few weeks, then popped up in early January 2021, then received a price cut in February before being removed from the configurator a week later. Apparently it was still available as a special order “off the menu” for a while.
Needless to say, the situation with this car was confusing.
Assuming these cars are actually manufactured and delivered this time, some new Model Ys could now even be purchased for less than $30,000 if the right buyer can take advantage of the right state or local incentives in addition to the federal tax credit.
But that might not last long, as the Inflation Reduction Act stipulates that the new electric vehicle tax credit will require batteries to be manufactured outside of China – and Tesla’s LFP batteries are currently manufactured in China. So by the end of the year, the state could lose access to the federal tax credit or that credit could be reduced.
Deliveries are scheduled to begin in “October-November 2023,” according to Tesla’s website, so orders placed now could see a lead time of up to 8 weeks.
FTC: We use income generating auto affiliate links. More.