Tesla has upped discounts on the Model 3 and Model Y to $7,500, following a $3,750 discount earlier this month.

A recent check of Tesla’s website showed lowered prices for both models, along with an offer of 10,000 miles of free Supercharging. The Model 3 now has an effective base price of $40,690, while the Model Y starts at $59,690.

Tesla $7,500 discount on Model 3 - December 22, 2022Tesla $7,500 discount on Model 3 – December 22, 2022

Before you pronounce these models a deal, you should consider that this comes after a series of painful price hikes on Teslas, including one in June that pushed the starting price of the Model Y past $67,000. A price hike in March had already left the Model 3 costing about a third more than a year earlier.

It’s also worth noting that $7,500 is potentially the maximum amount Tesla buyers might be able to claim as a federal EV tax credit next year—although there is no reason to believe that will be the amount that can be claimed for vehicles purchased or leased after January. That’s when revised tax credit guidelines are expected to render Tesla vehicles eligible for the American assembly and component portion of the credit but ineligible for the full amount.

Tesla charging (Courtesy of Tesla, Inc.)Tesla charging (Courtesy of Tesla, Inc.)

Despite supply-chain struggles, Tesla has managed to make and deliver a record number of vehicles this year. Company CEO drama aside, lagging demand, reportedly high inventory, and the need to maintain sales momentum might explain these discounts.

Tesla CEO Elon Musk has confirmed that a future smaller Tesla could cost half as much to make. But Tesla already is maintaining a profit margin from the sale of its EVs that leaves other automakers envious. Perhaps there is more room for Tesla to share the wealth?

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