Tesla cuts Model Y, X and S prices in the US and says it’s ending the referral program

Another round of price cuts has shaved $2,000 off the starting prices of Tesla’s Model Y, Model X and Model S for buyers in the United States. The company’s North America branch posted on X about the change to the Model Y on Friday night, at the same time announcing that the company is ditching its referral program benefits in all markets. The current referral program benefits will end after April 30, 2024.

Tesla’s Model Y now starts at $42,990 for the rear-wheel drive base model, $47,990 for the Model Y Long Range, or $51,490 for the Model Y Performance. The base Model S has dropped to $72,990 while the Model S Plaid now starts at $87,990. The Model X starts at $77,990 (base) or $92,990 (Plaid). The changes come during a rocky few weeks for the company, which just issued a recall for Cybertrucks over possible issues with the accelerator pedal, reportedly laid off 10 percent of its employees and reported a decline in deliveries for the first quarter.

Prices for the locally produced Model 3 and Model Y were cut by around 4-6 percent, while the imported Model S and Model X were reduced by as much as 22 percent. The Model S and Model X are not produced in China and are sold in the United States through imports. The Model 3 is offered in two trims in China, the Model Y in three, and all of them see a price drop of RMB 14,000.

Tesla has a factory in Shanghai that produces the Model 3 and Model Y.

The entry-level, rear-wheel-drive Model 3’s latest starting price is RMB 231,900 ($32,030), down RMB 14,000, or 5.69 percent, from the previous price of RMB 245,900. The latest starting price for the dual-motor Model 3 Long Range is RMB 271,900, down RMB 14,000, or 4.9 percent, from RMB 285,900. The entry-level rear-wheel drive Model Y has a new starting price of RMB 249,900, a decrease of RMB 14,000, or 5.31 percent, from RMB 263,900.

The Model Y Long Range has a new starting price of RMB 290,900, down RMB 14,000, or 4.59 percent, from RMB 304,900. The Model Y Performance has a new starting price of RMB 354,900, a decrease of RMB 14,000, or 3.8 percent, from RMB 368,900. In terms of delivery wait times, both variants of the Model 3 have gone from 2-6 weeks previously to 3-6 weeks, and all three variants of the Model Y have remained unchanged at 2-6 weeks.

Both the Model S and Model X are available in China in regular versions and the more expensive and powerful Plaid version. The latest starting price for the regular Model S is RMB 684,900, a decrease of RMB 124,000, or 15.33 percent, from RMB 808,900. The Model S Plaid’s latest starting price is RMB 814,900, down RMB 214,000, or 20.8 percent, from RMB 1,028,900.

The regular Model X starts at RMB 724,900, down RMB 174,000, or 19.36 percent, from RMB 898,900.

The Model X Plaid’s latest starting price is RMB 824,900, down RMB 234,000, or 22.1 percent, from RMB 1,058,900 previously. The current estimated delivery dates in China for all variants of the Model S and Model X are the third quarter of 2024, and they were previously the second quarter. Notably, Tesla recently lowered the prices of the Model Y, Model S, and Model X by $2,000 in the US, but there were no changes to the Model 3 or Cybertruck.

Tesla delivered 386,810 vehicles globally in the first quarter, down 8.53 percent year-on-year and down 20.16 percent from the fourth quarter of 2023. That is the first time since the second quarter of 2020 that the company’s global deliveries have seen a year-on-year decline, and well below analysts’ estimates of 449,080 vehicles. The company sold 132,420 units in China, its second-largest market after the United States, in the first quarter, contributing 34.23 percent of global deliveries.

That is a 3.64 percent decrease year-on-year and a 22.08 percent decrease from the fourth quarter of 2023. In March, Tesla sold 62,398 vehicles in China, up 107.02 percent from 30,141 in February, though down 18.61 percent from 76,663 a year earlier. Its Shanghai plant exported 26,666 vehicles in March, down 11.77 percent from 30,224 in February while up 118.47 percent from 12,206 in the same month last year.

The first model produced at Tesla’s Shanghai plant is the Model 3, with deliveries beginning in January 2020.

Deliveries of the locally produced Model Y start a year later, in January 2021. The Model Y is one of the best-selling models in China, with monthly sales exceeding even many traditional gasoline cars. And after deliveries of the locally-produced Model Y begin, deliveries of the Model 3 drop significantly. For the full year of 2023, the Model Y sold 456,394 units in China, contributing 75.6 percent of Tesla’s full-year sales of 603,664 units in China.

The Model 3 sold 147,270 units in China in 2023, contributing 24.4 percent of Tesla’s annual sales in China. With the rapid development of the electric vehicle (EV) industry in China over the past few years, both the Model 3 and Model Y are facing an increasing number of competitors. Smartphone giant Xiaomi officially launched its first EV model, the SU7, on March 28, the latest in a slew of Model 3 rivals at a lower price.

The Model Y is still selling well in China, but the arrival of more and more competition is threatening its dominance of the crossover segment. Nio’s sub-brand Onvo, codenamed Alps, will launch its first model later this year. Onvo’s first model will compete directly with the Model Y, with bill of materials (BOM) costs about 10 percent cheaper. Tesla began a 10 percent global layoff earlier this month, and the China team has been affected.