Tesla has made changes to its Model Y lineup by eliminating the Model Y Rear-Wheel Drive variant and replacing it with the Long Range RWD variant. Just two weeks ago, the EV giant reduced the price of the Model Y RWD by $2,000 to $42,990, making it the lowest list price ever. The Long Range RWD will now start at $44,990.
The Long Range RWD offers a range of 320 miles compared to the RWD’s 260 miles, making it a significant range boost for an additional $2,000 cost. The Model Y LR All-Wheel Drive, starting at $47,990, has a range of 310 miles but provides faster acceleration. Elon Musk mentioned on social media that many recent RWD Model Ys have an additional 40-60 miles of range that can be unlocked for $1,500-$2,000.
Tesla’s decision to eliminate the Model Y Rear-Wheel Drive variant and replace it with the Long Range RWD model is expected to have a positive impact on sales and revenue for the company. The Long Range RWD model is eligible for $7,500 IRA tax credits, bringing the effective price down to $37,490. This makes it considerably cheaper than other EV models in its class and makes Tesla more competitive in this market segment.
In addition to this change in pricing strategy, Tesla recently removed discounts on new U.S. Model Y inventory due to high demand from customers. This has caused the effective price of the Model Y in the U.S. to be higher than it was several weeks ago but is still competitive compared to other EV models in its class.
Tesla stock rose 7.7% last week to 181.19 after increasing by 14.4% the week prior due to strong demand for electric vehicles and rising consumer awareness about climate change.
On April 27th, Tesla saw an increase of 15% in shares as it cleared key obstacles for launching Full Self-Driving in China after an Elon Musk visit to Berlin earlier that month.
However, TSLA stock saw a reduction in weekly gains after Musk made changes to supercharger networks and new vehicle teams earlier this month raised concerns about company strategy and long-term growth prospects.
Overall Tesla’s recent changes reflect their commitment towards providing customers with high quality products while keeping their prices competitive in this rapidly growing market segment
