Tesla Model Y:Tesla just dropped the prices on its two best-selling cars and the move could shake up the EV market again.
On Tuesday, Tesla unveiled new versions of the Model Y and Model 3, both about $5,000 cheaper than before. The Model Y now starts at $40,000, while the Model 3 comes in at $37,000. The timing isn’t random the cuts come right after the federal $7,500 EV tax credit officially expired at the end of September, a perk that used to make electric cars more affordable.
This latest move shows how automakers might adjust pricing strategies now that President Trump and Republican lawmakers have ended the tax credit program. Tesla, which still dominates U.S. EV sales but has seen its market share slip below 50%, is setting the tone for how the industry adapts.
More electric cars are now landing in the $35,000–$40,000 range, bringing them closer to high-end gas cars from BMW or Mercedes-Benz — though they’re still pricier than hybrids or gasoline models from Toyota and Honda.
Still, EVs often win out over time: charging is cheaper than refueling, and maintenance costs are lower since there’s no engine to service. For many buyers, the long-term savings could make the switch to electric wo
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