In the ever-evolving landscape of the electric car market, Tesla has been known for frequently adjusting its prices. As we enter 2023, Tesla has already made its sixth price change, and this time it’s a price cut. This is quite the contrast from the past two years, where Tesla prices rose significantly. However, since late 2022, Tesla has been dropping prices by up to 25%. In this article, we’ll take a closer look at Tesla’s latest price adjustment and see just how much the prices have dropped this time around.
The Model 3 Receives Another Price Cut, But Long Range AWD Remains To Be Seen
Tesla has made another price adjustment to their popular Model 3, marking the sixth price change of 2023. This time, the Rear-Wheel Drive (RWD) Model 3 has dropped from $42,990 to $41,990, making the lowest-priced Tesla even more affordable. The Model 3 Long Range remains unavailable for the time being, while the Model 3 Performance has been reduced to $52,990. However, it is worth noting that Tesla now advertises that the RWD Model 3 will lose half of the EV tax credit due to new battery sourcing rules. The battery supplier for the LFP batteries, CATL, is almost certainly the reason for the Model 3 losing half of the credit.
Model Y Price Drops in 2023 – We’re Back to Where We Were
A brand new configuration is now available. The Standard Range AWD Model Y is now on the menu! The Standard Range Model Y is EPA-rated for 279 miles, and starts at $49,990. You can only order it in the 5-seater configuration. What makes the Standard Range Model Y so special? It is the first Tesla to include the new 4680 battery cells. These batteries are more energy dense, and are currently produced in Austin, Texas. The interior of the Standard Range Model Y is identical to the higher trim options.
The best-selling EV in America, the Model Y Long Range AWD, is back down to $52,990. In early 2023, Tesla had increased the price for this spec by $2,000, but has now eliminated that price hike. We’re back to where prices were several weeks ago.
The Model Y Performance received a price cut too, and is now down to $56,990.
The Model S sedan now starts at $84,990, a $5,000 cut from last month’s price. The Model S is rated for up to 396 miles of range. The Model S and X both feature the controversial yoke steering wheel.
Model X Price Drop
The Model X starts at $94,990, also a $5,000 drop. The Model X is rated for up to 333 miles of range. It’s the quickest SUV on the market (and third-row at that…), with a 0-60 mph time of just 2.5 seconds.
Tesla Prices as of Today
With and without the EV tax credit, here’s where Tesla prices stand after the latest price cuts.
Model 3 SR
Model 3 LR
Model 3 Perf.
Model Y SR
Model Y LR
Model Y Perf.
Price With Tax Credit
Why Is Tesla Dropping Prices?
The automaker delivered 422,875 vehicles globally in the first quarter. That’s a record for Q1 for Tesla, but it shows a slowed pace of growth. With the economy on shaky ground, many drivers are cutting back on discretionary spending. Yes, that includes your favorite Tesla. Throw in new federal guidance on the EV tax credit, and it starts to look like Tesla had more reasons to drop prices than not to.
We’ll stay on top of the latest. Check out these other reader favorites:
We recently shared the 2023 models with the biggest price hikes. Now, we’re back with the cars and trucks with the smallest price hikes for the 2023 model year. I must say, there are some surprises here. We’ll start off by taking a look at the price trends for the 25 best-selling models in 2022. Unfortunately, Honda grabs the attention with some of the most anti-consumer price changes in recent memory.
Let’s dive in.
The 25 Best-Selling Cars in 2022 + Pricing For 2023
The table below shows 2023 pricing for base models and mid-spec trim options in an effort to provide more useful price comparisons. We’ve included how much the 2023 pricing has changed as a percentage.
Notice that two of the top-selling models actually have price decreases for 2023. And after years of demand outpacing supply, Tesla prices are holding steady. Still, the vast majority have MSRP increases between 3% and 10%.
2023 Ford F-150 Price Increase
America’s best-selling vehicle is now a lot more expensive. The 2023 F-150 Lariat, the popular mid-spec truck, is now $8,440 more expensive. The F-150 Limited sees a similarly huge price bump, and now tops out at $85,950. Apparently the F-150 now has Super Duty pricing. The F-150 Lightning went from a $40,000 electric truck, to a $60,000+ EV.
Tesla Prices in 2023 (UPDATE)
Update January 16th, 2023: Tesla has slashed their prices by up to 20% for some models.
What the heck is going on at Tesla? Overnight they dropped the price of the Model Y Long Range to $52,990, a full $13,000 less than its previous price of $65,990. 🤯 pic.twitter.com/EcZo6wXIiY
Tesla prices rose 25% from 2021 through early 2022. Now, prices haven’t changed since June 2022. In China, Tesla prices have actually fallen, leading to in-store protests from frustrated customers who bought a few days too soon. The Rear-Wheel Drive Model 3 does now qualify for up to $7,500 in federal tax credits. More on that here.
It’s a frustrating trend, one that we hope Honda fans will speak out against. Honda clearly wants you to spend more in 2023. As with the CR-V, they’ve dropped the base Civic LX, effectively raising the entry-level Civic to $26,145 in 2023. It’s happening to the 2023 CR-V too. Honda eliminated the base LX trim, forcing a nearly $5,000 price increase for the entry-level CR-V.
At least Honda is offering several more options for those wanting a hybrid powertrain in 2023. The Sport, EX-L, Sport-L and Touring trims all come as hybrids. The 2023 Touring Hybrid starts at $38,985, which is $600 LESS than the 2022 Accord Touring.
The Cars, SUVs and Trucks With the Smallest Price Increases
The Ford Escape Gets New Looks and Lower Pricing
The 2023 Ford Escape gets a complete makeover, and with it comes a new trim lineup. That makes price comparisons tricky, but like for like, the 2023 Escape’s pricing remains about the same. In fact, the 2023 Escape ST-Line is $1,000 cheaper than the outgoing 2022 Escape SEL, its closest analog. Higher trims of the 2023 Ford Explorer also see steady prices.
We can’t say the same about other Ford models. The F-150 is seeing prices go up by 7% to 17% in 2023, and the all-electric F-150 Lightning now costs about $20,000 more than it was originally priced.
Toyota Offers the Closest Thing to a Deal
Toyota Corolla prices have actually gone down in 2023 for the Hybrid LE as Toyota makes way for the new hatchback Corolla. The 2023 Corolla Hatchback SE starts at $24,060 with destination fees.The Camry and Highlander also saw very minor price increases, with prices going up by about 1% across trim levels.
The Nissan Altima Continues to Slip
Altima prices nudged up slightly, but that’s no surprise. Nissan’s Altima sales have been on the decline for years now. In 2019, Nissan sold 209,000 Altimas in the U.S. In 2022, Nissan sold 140,000 Altimas in the American market.
Where to Find the Deals in 2023
New car prices are trending ever higher, even as supply finally catches up to demand. So, where are the best car deals in 2023? Head on over to the used car market for lower prices. Used car prices have been falling for several months, and we expect this trend to continue. Here are some CarEdge resources to get you started on your journey:
January 2023 Update: Tesla slashed prices for new models by up to 20% overnight. The top-selling Long Range Model Y dropped from $65,990 to $52,990. This means that not only are all Teslas cheaper now, but most Model 3 and Model Y spec options are now eligible for the $7,500 EV tax credit in the U.S., at least until March when more detailed eligibility requirements are to be released by the government.
Lower new Tesla prices will immediately hit used Tesla prices hard. With these changes, in 2023, expect used Tesla prices to be at least 20% lower than they were in 2022.
Now, on to the original article.
Used car prices have fallen over 25% in 2022, and have a lot further to fall. Generally, used electric car prices have been reluctant to drop, at least compared to the steep declines seen in other vehicle classes such as luxury SUVs, crossovers and compact cars. The picture is different for used Tesla prices heading into 2023. Long the best-selling EVs by raw numbers and market share (more on that here), Tesla became the darling of auto market speculation in 2022. Thousands of Tesla buyers flipped their new cars for a profit on the used car market just weeks to months after taking delivery.
In 2023, used electric car prices are in for a rude awakening. Here’s where things stand today, and where prices are headed in the near future.
Used Tesla Prices Plummet
According to Edmunds data shared with Reuters, used Tesla prices were down 17% in December for the July peak. In July, the average price of a used Tesla was $67,297, but six months later the average price had fallen to $55,754. It’s all about perspective here: the overall used car market dropped 4% at the retail level during the same period, and wholesale prices dropped much more, as you can see here.
Used Teslas are sitting on dealer lots for much longer these days. In November, used Teslas sat on dealer lots for 50 days before selling on average, compared with 38 days for all used cars.
Who would’ve guessed it? Tesla cars couldn’t remain appreciating assets forever. “You can’t sell your current Tesla for more money than you paid for it, which was true for a lot of the past two years,” said Karl Brauer, executive analyst at car sales website iSeeCars.com.
Tesla Inventory and Days to Sell Rising
As we approach the new year, there are 1,085 used 2022 model year Teslas for sale on CarEdge Car Search. A third of these nationwide listings have less than 5,000 miles on the odometer. In fact, roughly one third of ALL used Tesla listings are 2022 models. More noteworthy is how long used Teslas are remaining on the market.
As recently as July 2022, analysts at iSeeCars found that the Tesla Model Y was the fastest-selling used car in the United States. The Model 3 and Model X were #5 and #6 on the list, right behind the Toyota Prius hybrid and the all-electric Ford Mustang Mach-E. It was a time of record gas prices, and electric mobility was very appealing.
Fast forward to the last days of 2022, and 69 percent of the 5,800 used Teslas on the market nationwide have been listed for greater than 38 days, the overall industry average. Nearly 40 percent have been listed for sale for over 90 days.
Tesla Flippers Out of Luck
And then there were the flippers. Tesla flippers made good money for a while. Wait times were between two and six months for factory-ordered Tesla EVs. Flippers would order a brand-new Tesla from the factory (often paying cash), with the intention of selling for a premium to an impatient buyer weeks if not days after taking delivery. The LA Times featured once successful Tesla flippers in this fascinating story.
The Tesla flippers flooded the market with gently used Teslas, the buyers vanished, and we’re left with plummeting prices for used Teslas.
Used Tesla Prices in 2023
These are the biggest factors that will influence used Tesla prices in 2023:
EV tax credits
The competition (quality AND quantity)
We recently took a deep dive into why our auto experts think used car prices will continue to decline in 2023. Historically, Tesla has bucked the mainstream trends, but that era may have come to a close. Here’s a summary of what our team expects in 2023:
Why are used car prices so likely to drop further?
New car inventory is now the highest it has been since 2020. More buyers are considering new models, reducing demand for used cars.
Interest rates for auto loans have doubled since 2021. The average used car loan APR is now close to 10%, while used car loan APRs average under 5%.
We expect used Tesla prices to soften in 2023, especially when considering yet another factor, revised EV tax credits. More on that below.
Tesla Tax Credits Return, With a Catch
The Inflation Reduction Act of 2022 replaced the original EV tax credit in place since 2009 with new rules and eligibility requirements. These are the biggest changes taking effect in 2023 for new EVs:
The 200,000 sale cap is replaced with an expiration date of December 31, 2032.
The tax credit is back for Tesla, GM, Toyota and all other EV automakers, but only if strict requirements are met.
New vans, SUVs, and trucks with MSRPs up to $80,000 qualify. Sedans priced up to $55,000 MSRP qualify.
The tax credit will remain at $7,500, however it is now divided into $3,750 for battery mineral sourcing and $3,750 for battery component sourcing.
Final assembly must be in the United States, Canada or Mexico as soon as the bill is signed into law.
The EV tax credit is income-limited to individual tax filers with adjusted gross incomes of $150,000 or less, and joint filers with incomes of $300,000 or less.
There’s now a used EV tax credit, but before you get too excited, the used EV tax credit has the following eligibility requirements in 2023:
Used EVs would now be eligible for a $4,000 federal tax credit, with a price cap of $25,000. Used EVs must be at least two years old, and the used credit can only be claimed once in the life of the vehicle.
Tax filers can claim only one used EV tax credit every three years.
Used Tesla prices have fallen, but they’ll have to fall a whole lot more to approach the $25,000 price cap. Barring an astonishingly severe downturn, used Teslas won’t qualify for the used EV tax credit in 2023.
New Tesla Models Again Eligible
In addition to higher interest rates, rising competition, a flooded market and general economic worries, consumer demand for used Tesla cars will decline further simply because brand new Teslas will again qualify for EV tax credits, for the first time since 2019. Of course, they’ll have to fall under the strict price caps of the new law. Few buyers will want to pay over $50,000 for a used Tesla Model 3 when a brand-new one could be had for less with the new tax credit. This continues in 2024, when the EV tax credit becomes a point-of-sale rebate.
Tesla Depreciation Data
CarEdge provides depreciation forecasts for Tesla models using real market data. The graph below shows expected depreciation for the Tesla Model Y over the next decade.
Now more than ever, you CAN negotiate used Tesla prices. Floorplanning costs are high, meaning that car dealers are paying more each day that a used Tesla sits on their lot. With CarEdge Car Search, you can see exactly how long a car has sat on the lot, and then use that information as leverage to negotiate lower prices.
We love free stuff as much as the next guy. Check out these 100% free, no-strings-attached car buying guides.
One third of American drivers are seriously considering going electric as generous tax credits, fuel savings and reduced emissions lure the masses towards EVs. My own household made the switch in early 2022, and we’re never going back to ICE. In hopes of adding clarity to the current EV market, we’ve created this resource to share what we think are the BEST electric cars, trucks and SUVs in 2023. We’ve also shared what we think are the worst.
The Best Electric Cars in 2023
These models are stand-outs for their value. Range, charging speed and available features are given priority over performance in our analysis.
2023 Tesla Model 3 Rear-Wheel Drive
Range: 272 miles
Fast charging (adding 200 miles in 20-30 minutes)
Why it’s great: The Tesla Supercharger network makes cross country travel hassle-free. Tesla charges are very reliable, and with 1,500 locations in all 50 states, finding one is rarely an issue.
Plus, the price you see on Tesla’s online configurator is the price you pay (before taxes and required fees, of course). While legacy automakers continue to struggle with out-of-control dealer markups, Tesla and other direct-to-consumer EV makers have the upperhand on pricing.
Why it’s great: The Model Y is the larger, more family-oriented version of the Model 3. Last year, the Model Y overtook the 3 as the best-selling EV in America. Although it is the most expensive model on this list, if you can afford it, the ease of public charging, great range, spacious interior and exhilarating performance all make this the sweet spot for many buyers. Plus, there are no dealer markups.
But wait, there’s more. Both the Model Y and Model 3 are available for delivery soon after placing an order. Tesla wait times are between one and three months as of late 2022. That’s about as good as it gets in today’s EV market.
Should you ever decide to sell, both of these Teslas have amazing resale value.
Fast charging: Add 200 miles of range in 20 minutes
Why it’s great: The 2023 IONIQ 5, Kia EV6, and Genesis GV60 are the first models powered by Hyundai Motor Group’s Electric Global Modular Platform. This is next-gen 800-Volt architecture at (relatively) affordable prices, and that’s awesome.
Plus, the IONIQ 5 is spacious, and looks really cool. Sadly, Hyundai has had a very difficult time scaling up production due to supply chain constraints, so expect to either wait for at least six months, or battle outrageous dealer markups to get your hands on a rare allocation.
Fast charging: Add 200 miles of range in 20 minutes
Why it’s great: Kia’s version of the IONIQ 5 looks completely different, with very similar specs. That’s because both models share the e-GMP platform with great range and even better charging.
The 2023 EV6 has slightly more availability than the IONIQ 5 right now. For the 2023 model year, Kia decided to drop the “Light” base model, kicking the entry-level price all the way up to nearly $50,000.
As always, I recommend everyone take a test drive before dismissing EVs. They’re quiet, efficient and fun. The EV6 would be a great one to take for a spin.
Fast charging: Add 190 miles of range in 28 minutes
Why it’s great: The VW ID.4 is now made in America at Volswagen’s Chattanooga, Tennessee factory. That means it will qualify for the revised EV tax credit (up to $7,500), as long as your VIN confirms that it is an American-made ID.4. I was impressed during my test drive of the ID.4. It rides like a luxury crossover, and has plenty of acceleration when you need it. However, it’s definitely the least sporty of this bunch, but it’s also the least expensive.
Now made in America, there is also a new cheaper option starting at $37,495. However, with public charging infrastructure slow to build out, the expected 208 miles of range is not enough for us to confidently recommend it to anyone but those who expect to stick around urban areas 95% of the time. The ID.4 Pro, on the other hand, is exceptional value with the EV tax credit.
Price: $90,000-120,000 (before markups of up to $100,000)
Range: 329 miles
Why it’s horrible: Where do we start? The Hummer EV costs $100 to charge (because it has a MASSIVE 212 kilowatt-hour battery pack), weighs 9000 pounds (that’s 2x the weight of the typical F-150), and is horrible for the environment. If you’re looking to go green with your EV purchase, this isn’t it. It’s also very expensive, but that’s less surprising these days.
At auction, we’ve seen many Hummer EVs selling for over $200,000. No thanks.
2023 Mazda MX30
Range: 100 miles
Why it’s horrible: If you’re considering the Mazda MX-30, send me an email at justin@CarEdge.com. I’d like to talk you out of it. I have nothing against Mazda as a brand (they make some awesome cars), but I am very against anyone buying an electric car with just 100 miles of range in 2022. Sure, maybe it’s just for around town. Have you thought about resale value? With barely 100 miles on a charge and slow charge times of around one hour, I’m afraid Mazda’s first EV won’t be worth its scrap metal value in a decade.
Other options to consider at this price point? The Nissan LEAF, base Volkswagen ID.4, Chevrolet Bolt, and soon-to-come Chevrolet Equinox EV are all far more capable for under $40,000.
2023 MINI Hardtop
Range: 110 miles
Why it’s horrible: I sure hope CarEdge’s own Ray Shefska forgives me for bashing the electric MINI, but with 110 miles of range and slow charging, I don’t see a single reason why anyone should consider this EV. It’s one of the last ‘compliance cars’ in the EV market.
2024 Cadillac Celesiq
Price: $300,000+ (yes, count those zeroes)
Range: 300+ miles
Why it’s horrible: Would you pay Rolls Royce money for a Cadillacl? GM seems to think you would. I’m all for going all-out on EV design and innovation, but when Cadillacs cost more than houses, I can’t help but shutter. But hey, it will be hand-built.
September 2023Update: The average transaction price for an EV dropped last month. Check out the details below.
Car buying is the second biggest expense most consumers will ever make, and more drivers are getting squeezed into $1,000/month car payments. With an EV, you can save hundreds of dollars per month in fuel costs, but the upfront cost of getting into an electric car is substantial. Here’s the average price of an electric car today, and how much prices have increased over the past three years.
Wondering when EVs will get cheaper? We’ll dive into that too.
The Average Price of an Electric Car Is 10% Higher
As of the most recent data from August 2023, the average transaction price for a new car (of any powertrain) was $48,451 according to Kelley Blue Book. That’s a 0.6% increase since the month prior. In August 2023, the average electric car price was $53,376 (for new cars).
In 2023, electric cars cost 10% more than the overall market average. Last year, EV prices averaged more than 15% higher than the overall market.
Looking at historical data, it’s clear that EVs are getting cheaper, despite the luxury leanings of most new models. Over the past year, the average price paid for a new EV has declined by 16%. According to KBB, new EV pricing peaked in June 2022 and has fallen more than $6,000 so far in 2023.
Why Are EV Prices Dropping?
Why did the average price of an EV dropping so quickly? Tesla keeps slashing prices, in turn launching an all-out price war with the competition. $55,000 is not cheap, of course. An abundance of luxury options continues to keep the average price of an electric car well above gas counterparts.
On top of that, Ford and GM have been steadily increasing prices for their electric trucks. E-truck prices are generally expensive (see ALL electric truck prices here). The new Chevrolet Silverado EV is not going to be as affordable as originally claimed. Most electric trucks cost over $70,000 once trim and spec availability is considered.
Although the average EV sells for 10% more than gas-powered models, here’s a breakdown of the starting MSRP for the top 10 electric car models on sale right now. As you can see, not all EVs are quite this expensive:
The average starting price for the top 10 best-selling electric cars in America is $48,899, which is 10% lower than six months prior.
EV Price Trends
In January 2020, the average electric car price was $54,668, or 42% higher than the overall market average. In 2023, the average cost of a new EV is $53,376 or about 10% higher than the overall new car market. That’s a lot better than where the EV marker was in early 2022, when EV prices averaged north of $65,000. Here’s how the average cost of an electric car has changed monthly since January 2020.
Simply put, EV prices are most likely to go down once they become truly mainstream. The great news is that many analysts agree that we’ve reached that point in early 2023. With EV market share climbing to a new record of 7.2% of all new vehicle sales in America in Q1 2023, there’s new support for the theory that once the auto market surpassed 5% EV market share, rapid adoption will follow.
However, there’s a big, expensive elephant in the room that’s blocking the path to much higher EV adoption: high prices. Lithium prices have dropped quickly in 2023 following a big spike last year. Generous EV tax credits have returned for Tesla models – the best selling EVs in the nation. Why aren’t prices dropping right now? Demand for new EVs remains very high. Dealers sell their electric inventory much faster than ICE models, and are rarely compelled to cut prices.
In order to change that, automakers will need to make more EVs, so that we can finally get some sitting on the lot for more than a few days. That could finally happen later this year with the arrival of many new mainstream electric models.
However, there’s another possibility that I suspect we’ll be hearing more about. Automakers and their supply chain partners (not to mention governments) have invested nearly $1 trillion dollars in electrifying global transportation. It’s been called the second industrial revolution, and one that will largely determine the world’s ability to combat man-made climate change. Automakers don’t want the EV revolution to fail.
But with rising production costs forcing EV prices higher, what could they do to return affordability to the consumer? I expect automakers to begin announcing lower range, more affordable electric vehicles. Less range might leave you skeptical, but remember that $7.5 billion was allocated to creating a national charging network in America.
Aside from federal money, Tesla, Electrify America, EVgo and even automakers themselves are also quickly installing fast chargers throughout the country. In 5 years’ time, range won’t matter nearly as much because chargers will be commonplace.
How might this play out? We’re already starting to see it happen. Volkswagen announced a new version of the ID.4 electric crossover that starts at just $37,495 with 208 miles of range. Plus, it’s made in America and qualifies for the new EV tax credits! That’s well below the longer-range option with 275 miles of range, but it costs at least $4,000 less. Hyundai says it will soon offer a standard range version of the IONIQ 5 with less range at a lower price. I expect General Motors and Ford will soon do the same, especially with future electric crossovers like the impressive Equinox EV.
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