The Model Y’s attraction grew instantly when it became apparent that even the recently redesigned Model 3 Highland would not be eligible for the government’s tax credit windfall due to its Chinese phosphate batteries. Ultimately, the RWD Model Y costs $36,490 after the tax credit, which is now applied directly at the time of sale, whereas the new Model 3 Highland starts at $38,990 in the US.
Tesla recently lowered the price of the Model Y in Canada in addition to China, where price reductions for the model reached as high as 9%. Not insignificantly, the Model Y now costs CA$4,000 less than before, and it is eligible for an additional CA$5,000 federal rebate.
The most recent price reduction for the Model Y lowers its beginning price below the qualifying threshold for the province’s Roulez vert programme if you live in Quebec. As a result, it instantly qualifies for an additional CA$7,000 in rebates, for an incredible total of CA$12,000 in incentives. This lowers the base Model Y price to the equivalent of US$31,300, an incredible price that the US is unable to match—not even with the tax credit.
The fact that the official selling prices of the Model Y and Model 3 are now exactly the same in Canada is even more intriguing. The starting price of both Tesla automobiles is CA$53,990 (US$40,230), even before any applicable state or federal tax credits or other incentives.
It may seem ridiculous to introduce the Model 3 and Model Y at the same base price, but since Tesla intends to give the Model Y a makeover in the summer, it may go through with another round of price cuts, possibly including one in the US, in order to clear out out-of-date inventory before the Juniper launch.