Tesla has introduced a cheaper Model Y RWD, making it potentially the most affordable Model Y ever available in the US. With a base price of $43,990, after incentives, the new model replaces the discontinued Model Y AWD. The RWD version uses a single motor instead of two, resulting in cost savings for those who don’t require AWD. It is believed to be equipped with Tesla’s cheaper Lithium-Iron-Phosphate (LFP) battery, which is more affordable and durable but offers less range compared to the Nickel-Manganese-Cobalt (NMC) cells used in other models. The new Model Y RWD qualifies for the $7,500 US Federal EV Tax Credit, bringing the post-credit base price down to $36,490.
The introduction of the cheaper Model Y RWD brings the price of a Tesla Model Y in the US to its lowest point yet. While Tesla had previously offered the Standard Range for as low as $39,990, those models did not qualify for the federal tax credit as Tesla’s credits had run out. The new Model Y offers the potential for buyers to acquire the vehicle for as little as under $30,000, especially when factoring in state or regional incentives along with the federal tax credit. However, this may be short-lived as the Inflation Reduction Act specifies that the new EV tax credit requires batteries to be manufactured outside of China, whereas Tesla’s LFP batteries are currently produced in China. Therefore, the Model Y RWD could lose access to the federal tax credit or see a reduction in the credit by the end of the year.
Deliveries of the new Model Y RWD are scheduled to begin in October or November 2023, with a potential lead time of up to eight weeks for orders placed now.