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Better Move Fast if You Want a Tesla Model Y — Prices Are Going Up

by | March 19, 2024

After spending much of last year cutting prices on its EV lineup, Tesla has reversed course, announcing a $1,000 increase in the U.S. sticker price for its best-selling Model Y. In Europe, meanwhile, buyers will pay as much as 2,000 euros, or $2,177 more for the electric SUV. While that might not be good news for buyers, Tesla stockholders hailed the price hike, giving shares traded under the Nasdaq ticker TSLA their first big gain in a month.

Tesla Model Y at Supercharger

The Model Y’s price increase follows several cuts in its MSRP in 2023.

Whether you cheer or complain about the news out of Tesla today depends upon your perspective.

The automaker announced it will raise U.S. prices on all versions of the Model Y crossover by $1,000 starting April 1. In Europe, prices will rise as much as 2,000 euros, or $2,177, depending upon the country and trim package. For potential customers that gives them less than two weeks to purchase the Model Y at its current price — which starts at around $43,990 before buyers apply a $7,500 federal tax credit.

After the big price cuts Tesla announced last year, however, Wall Street hailed the news, especially considering that some analysts had expected further discounting in light of the slowdown in growth of the U.S. EV market.

Stocks surge

Tesla Model Y - front 3-4 mountains

Tesla isn’t expected to update the Model Y for at least another year.

Tesla shares closed Monday at $173.88, a $10.31-a-share increase from the opening bell.

That marked a substantial turnaround considering Tesla shares had fallen sharply since the beginning of the year, investors worried about the market slowdown and the fact that Tesla’s full-year deliveries missed the mark CEO Elon Musk had set for the year.

Worse, the automaker fell behind rival BYD during the fourth-quarter of the year as the Chinese EV maker gained traction in Europe. Tesla’s operating profit margin also fell from 16 to 8% for the final quarter of 2023.

And even after Monday’s 6.3% gain, Tesla stock is down 30.01% since the beginning of the year, equal to a loss of $270 billion in market capitalization. It’s down about 40% from its 52-week high of $299.29.

More Tesla News

The “essential quandry”

Tesla Model Y - with surfboard

The Model Y will jump to a base price of $44,990 come April 1.

Operating out of its own dealer showrooms, Tesla has long eschewed the sort of discounting that “legacy” manufacturers traditionally rely on to prop up sales.

But last year’s price cuts suggested to many analysts that the automaker wasn’t immune to market ups-and-downs. And it came at a time when the EV market was seeing a flood of new product from both start-ups like Rivian, Lucid and VinFast, as well as established brands such as Ford, General Motors and Volkswagen.

“This is the essential quandary of manufacturing: factories need continuous production for efficiency, but consumer demand is seasonal,” CEO Elon Musk said during an earnings call last month.

The timing of the new price hike does raise some questions. Not only are dozens more new EVs set to come to market this year but sales growth in the battery-electric segment has slowed significantly over the past 12 months. Musk himself warned in January of “notably slower” growth in 2024.

It remains to be seen if Tesla can maintain its current momentum even after raising the price of its most popular product line.


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