Cheapest Model Y ever? Tesla starts selling the Model Y RWD in the US for $44,000

Tesla has updated its US website to add a cheaper Model Y RWD with a base price of $43,990, which, after incentives, could make it the cheapest Model Y ever available in the US.

The new model “replaces” the Model Y AWD, previously the cheapest model with a base price of $47,740, which was discontinued last month in a surprise move.

But this model is rear-wheel drive, not all-wheel drive, so cutting down on one engine saves money for those who don’t need two engines. It also appears to use a cheaper battery.

As a result, the new Model Y RWD starts at $43,990, $3,750 cheaper than the version that was discontinued last month. Additionally, the model still qualifies for the US federal EV tax credit of $7,500, which means a base price after the credit of $36,490.

The new model appears to use Tesla’s cheaper lithium-iron-phosphate (LFP) battery.

LFP batteries are cheaper and more durable than the more common nickel-manganese-cobalt (NMC) cells, but they have a lower energy density and thus a lower range for a given weight/volume of battery. They also have the advantage of not using cobalt, a conflict mineral.

The new Model Y “standard range” is listed as having a range of 260 miles, as opposed to the previous all-wheel drive “standard range” of 279 miles, which we believe is due to the switch to LFP batteries.

However, due to the LFP’s greater durability, it is recommended that you be able to charge the battery to 100% every night, as opposed to the recommended 90% daily charge for NMC sales. So the range is kind of a wash except for occasional road trip purposes when the NMC car is charged to 100% (although that’s the only time the big range numbers matter in the first place). Or, in cold climates, where LFP tends to perform worse than NMC.

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Additionally, the new model has a 0-60 acceleration time of 6.6 seconds, versus 5.0 seconds for the outgoing Model Y AWD. Another difference: You can’t get a 7-seat configuration on the Model Y RWD.

The standard Model Y range with an LFP battery has been available in China since 2021, and Tesla updated it yesterday so that the base model will have a 0-62 mph time of 5.9 seconds versus the previous 0-62 mph time of 6.9 seconds (which will roughly coincide with 0-60 time is 6.6 seconds).

So it is a bit strange that the “new” American model looks similar to the “old” Chinese model, at least for now.

Tesla has also been selling the LFP Model Y in Canada since earlier this year.

Cheapest American Model Y ever?

That’s $36,490 Post-motivation The price is likely the cheapest for a Tesla Model Y in the US to date.

Previously, Tesla had progress The standard range goes for $39,990, but at the time it wasn’t eligible for the tax credit because Tesla’s credits under the previous law had run out. Additionally, it was only on the site for orders for two weeks, appearing in early January 2021, then received a price cut in February before being removed from the configurator a week later. It was supposedly still available “off menu” as a custom order for a while.

Needless to say, the situation with this car was confusing.

Now — assuming those cars are built and delivered this time — we may see some new Model Ys purchased for less than $30,000, if the right buyer can take advantage of the right state or provincial incentives in addition to the federal tax credit.

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But this may not last for long, as the inflation-reducing law stipulates that the new tax break for electric vehicles requires that the batteries be manufactured outside of China – and Tesla’s LFP batteries are currently manufactured in China. So, by the end of the year, we may see them lose access to the federal tax credit, or see that credit decline.

Deliveries are scheduled to begin in “October-November 2023” according to Tesla’s website, so there may be a lead time of up to 8 weeks for orders happening now.

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