Tesla Cutting Prices Even More: How Much Lower Are They Going To Go?

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Tesla has initiated another round of price cuts and this isn't the end of it.

Tesla Price Cuts

Tesla has initiated another round of price cuts as it seeks to increase demand and put pressure on competitor EVs. The price drops are getting the Model 3 RWD ever so close to being below $40,000, which is an important milestone to reach to really ramp up the demand.

Model Y vehicles dropped in price by $2,000 each and Model S and Model X vehicles were reduced in price by $5,000 for each variant. This puts the Model S AWD at a point to almost qualify for the U.S. $7,500 tax credit.

The price cuts are as follows:

Model 3

* Model 3 RWD: Now $41,990 (from $42,990)
* Model 3 Performance: Now $52,990 (from $53,990)

Model Y

* Model Y Long Range: $52,990 (from $54,990)
* Model Y Performance: $56,990 (from $58,990)

Model S/X

* Model S AWD: Now $84,990 (from $89,990)
* Model S Plaid: Now $104,990 (from $109,990)
* Model X AWD: Now $94,990 (from $99,990)
* Model X Plaid: Now $104,990 (from $109,990)

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Future Tesla Prices

Tesla is not done lowering prices, by the way. If I were to predict a floor for these price cuts over the next 3 years, I think it is this:

* Model 3 RWD: $37,000
* Model 3 Performance: $48,990

* Model Y AWD Standard Range: $43,990
* Model Y Long Range: $49,990
* Model Y Performance: $53,990

* Model S AWD: $79,990
* Model S Plaid: $94,990
* Model X AWD: $89,990
* Model X Plaid: $94,990

EVs (electric vehicles) are naturally going to come down in price over time, with the more high end and expensive versions still costing more. It's like the phone and laptop. You can get a pretty good phone for a couple of hundred dollars, or a pretty good laptop for a couple of hundred dollars. The high-end versions will cost near $1,000 or more, though.

It will be the same with EVs. You will be able to buy a pretty good EV for under $40,000 from Tesla in the Model 3 RWD in the future. When the compact comes out, you will get a smaller, but very good EV for around $25,000.

And even further in the future, toward the end of the decade, Tesla will release a compact of the compact and that will sell for around $18,000.

Unfortunately, for the next few years, there will be pressure on car prices as the ramp of EV production and batteries continues. At some point, batteries will mostly be recycled and the materials won't need to be mined as much. This will significantly lower prices.

For now, though, Tesla is cutting prices to do whatever it takes to get cars on the road gathering data for its FSD software. That is Tesla's end game with the auto business. Everything is being done to get hundreds of millions of Robotaxis on the road.

Do you think Tesla will continue to cut prices?

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.

Image Credit, Tesla, Screenshot