We track Tesla’s prices for one specific model during the American market vehicle shortage to see if Tesla took advantage of buyers during the period by dramatically raising prices. Here is what the data says.
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Over the period from 2020 until the middle of 2023, the American market was short of new vehicles for sale. During this time of shortage, automobile brand dealerships took advantage of the shortage and added price increases. Manufacturers also did quite well on a per-vehicle-sold basis since incentives went from robust prior to the shortage to non-existent during.
Tesla doesn’t use the traditional dealer model and instead sells directly to the public through its own network of self-owned retail outlets and online ordering. We tracked pricing data on Tesla’s most popular model to see how Tesla changed its prices during the run-up to the shortage, during the shortage,and now that the shortage has ended, present-day market conditions. The data we have shows that Tesla followed the same pricing practices that cast traditional dealerships in a negative light.
We will use the five-passenger Tesla Model Y LR AWD (Long-Range All-Wheel Drive) as our example model. This is one of Tesla’s most popular models, and it has wide appeal outside of just Tesla’s strongest market, California, due to its all-wheel drive system that helps owners navigate winter conditions. The prices we show are the base version of that model with no options other than Tesla’s standard configuration on its built tool. That means no special colors, added seating, FSD, or other options.
Our pricing of the Tesla Model Y begins in 2019 after its introduction. In our pricing, we attempt to use the full cost to the owner, including the Destination and Delivery fee that Tesla charges. We’ve done our best using data from many published sources. We provide a list of links that help to detail pricing changes for this model. Torque News also reached out to Tesla’s public relations group and asked if Tesla would like to provide the price data and offer any comments. We have not heard back since Tesla’s PR department has been mothballed.
Our list does not include every price change over the period. Rather, we have selected price events that create a notable change. If you look at our source links, you will notice that our price point may not be the one highlighted in the story. However, the story may contain a screenshot of the Tesla build tool. It is the screenshots we are showing pricing for in such cases. Note that the displayed prices may include “potential incentives and gas savings” which we add back to the price where appropriate.
Price Shown By Tesla At Pre-Sale Event = $”51,000” (Not sure if Delivery is included)
Introductory Price, March 2019 = $54,000
Price As Inventory Began to Be Delivered Early 2020 = $54,290
January 2021 Price = $54,290
Feb 2021 = $52,000
April 2021 = $52,790
November 2021 = $59,290
March 2022 = $64,190
June 2022 = $67,000
January 2023 = $54,290
April 2023 = $54,290
May 2023 = $51,540
October 2023 = $49,790
February 10, 2024 = $49,380 (Verified Ourselves Using Tesla Build Tool)
Based on the best available data we could mine, the price of the Tesla Model Y LR AWD was promised by Tesla to start at “$51,000.” By the height of the vehicle shortage in 2022, the price had risen to $67,000 (Including Delivery. Source linked above). As the vehicle shortage abated, the price has now returned to the same as the promised price in 2019, to just over $50K.
Our observation is that the vehicle shortage resulted in Tesla adding roughly $10K to $15K to the consumer cost of the Model Y. Typical of what dealers from other brands had done during the same period. None of the price points we chose included any short-term promotions or discounts on inventoried vehicles. You can read more about Tesla discounting inventoried vehicles here.
What conclusion can be drawn from the best data we could dig up? We will not comment, but we will let Tesla advocacy publication Elektrek offer its opinions. In a 2021 story related to Tesla price increases the author, Fred Lambert, concludes, “Tesla could simply be seeing strong demand and capitalizing on it.”
In a story titled “Tesla (TSLA) significantly increases its electric car prices across its lineup,” which was published in June of 2022, Fred Lambert concludes the story by writing, “...Tesla could just be looking to increase its gross margins. While the company was complaining about increasing costs during its price increases last year, its gross margins on vehicles have consistently increased over the last year.”
If Tesla takes us up on our offer to clarify the price history of the Model Y, we will correct any errors in this story. Also, should Tesla wish to offer any comments, we will add them and note the change for readers.
Image of Tesla retail outlet by John Goreham.
This story was updated on February 10th, 2024, following another Model Y LR AWD price reduction.
John Goreham is an experienced New England Motor Press Association member and expert vehicle tester. John completed an engineering program with a focus on electric vehicles, followed by two decades of work in high-tech, biopharma, and the automotive supply chain before becoming a news contributor. In addition to his eleven years of work at Torque News, John has published thousands of articles and reviews at American news outlets. He is known for offering unfiltered opinions on vehicle topics. You can follow John on Twitter, and connect with him at Linkedin.
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