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Tesla raises Model Y, Model 3 prices yet again

Are American buyers helping subsidize Tesla's overseas growth?

Tesla raised the price of its two most affordable models in what is being described as a quiet overnight website update. The Model 3's base price is now $44,690 (including $1,200 for destination) and the Model Y now starts at $56,190 – an increase of roughly $2,000 for the Model 3 and $1,000 for the Model Y. Higher-trim variants of both models saw their prices raised by $1,000 as well. 

The Model 3 Long Range model was immune from the adjustment; it still starts at $52,690. The Performance ticked up a grand, now starting at $59,190. The Model Y Performance (there's nothing beneath its Long Range variant, unlike the cheaper Model 3) now starts at $63,190.

And this is far from the first time Tesla has raised prices on its U.S. models in 2021. In fact, since Elon infamously announced that the Model S base price would drop to $69,420 late last year, and allowed the base Model 3 and Y prices to drop into the upper $30,000 range, the company has been incrementally raising MSRPs across its U.S. lineup. The price hikes have even prompted some analysts to speculate that Tesla is effectively subsidizing cheaper models overseas by hiking prices here at home. 

While cost, parts availability and labor issues have likely impacted Tesla much the same way they have the rest of the auto industry, that alone cannot explain the steady drum beat of price increases. In all likelihood, Tesla expects the Biden administration to continue its push for expanded electric vehicle subsidies, which would take some of the pricing burden off of the company itself. 

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