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Tesla’s Updated Model Y Base Version Is Now Available for as Low as $23,000

Tesla has re-introduced a variant of its popular Model Y SUV – the Rear-Wheel Drive (RWD) version. Launched in the United States, this new offering comes with a starting price of $43,990, making it $3,750 less expensive than the previous base Model Y All-Wheel Drive (AWD), which has now been discontinued. The introduction of the more affordable Tesla Model Y RWD aims to broaden Tesla’s customer base, offering a lower entry point without sacrificing the quality and innovation the brand is known for.

Tesla's Updated Model Y Base Version

Pricing and Federal EV Credit

One of the most compelling aspects of the Tesla Model Y RWD is its competitive pricing. With a base price of $43,990, this new variant offers a more budget-friendly option for those looking to join the Tesla family. But the financial incentives don’t stop there.

Federal EV Credit

The U.S. government offers a Federal tax credit of up to $7,500, which can be applied to the purchase of the Tesla Model Y. This effectively brings down the cost to an even more attractive $36,490, making it one of the most affordable options in Tesla’s lineup.

Special Case in Colorado

For residents of Colorado, the deal gets even sweeter. The state offers additional incentives that could potentially bring the cost of the Tesla Model Y down to as low as $23,000. While very few people will qualify for the maximum amount of incentives, the possibility exists for some, making it an unprecedented opportunity for those who do qualify.

The new Model Y RWD not only comes with a lower base price but also offers a range of financial incentives, including federal and state tax credits, that make it an exceptionally cost-effective choice for prospective EV buyers.

Tesla Updated Model Y Base Version

Best Deals in New Jersey

For prospective Tesla buyers in New Jersey, the financial landscape is particularly favorable. The state offers a range of incentives that, when combined, can significantly reduce the overall cost of the new Model Y RWD.

List of Incentives

  1. EV Below $45,000 Credit: New Jersey offers a $4,000 credit at the point of sale for electric vehicles priced below $45,000.
  2. No Sales Tax: The state waives the sales tax on electric vehicles, providing additional savings.
  3. Federal Tax Credit: Like the rest of the U.S., New Jersey residents can also avail of the $7,500 federal tax credit based on income limits.
  4. Referral Bonus: Tesla’s referral program offers a $500 bonus, adding to the list of financial incentives.

Price Calculation

Let’s break down how these incentives could affect the final price:

  • Base price of Model Y RWD: $43,990
  • Minus New Jersey EV credit: $4,000
  • Minus Federal Tax Credit: $7,500
  • Minus Referral Bonus: $500

Total Savings: $4,000 (NJ credit) + $7,500 (Federal credit) + $500 (Referral) = $12,000

Final Price: $43,990 (Base Price) – $12,000 (Total Savings) = $31,990

So, in New Jersey, you could potentially purchase the new Tesla Model Y RWD for as low as $31,990, making it an incredibly attractive offer.

Performance and Range

While the new Model Y comes with a more attractive price tag, it’s essential to examine how it stacks up in terms of performance and range, especially when compared to its now-discontinued AWD counterpart.

Range and Acceleration

The new Tesla Model Y RWD offers a range of 260 miles on a single charge and can accelerate from 0-60 mph in 6.6 seconds. While these figures are impressive in their own right, they do represent a slight step back when compared to the previous AWD version. The discontinued AWD model boasted a range of 279 miles and could accelerate from 0-60 mph in just 5 seconds.

Comparison with Previous Tesla Model Y AWD

When we put the numbers side by side, the new RWD version loses 19 miles of range and takes an additional 1.6 seconds to reach 60 mph from a standstill. These differences, although not drastic, are worth noting for potential buyers who prioritize range and speed.

Possible Reasons for Reduced Range

One plausible explanation for the reduced range could be Tesla’s switch to Lithium Iron Phosphate (LFP) batteries. While LFP batteries are generally more cost-effective and safer, they typically offer slightly lower energy density compared to other types of lithium-ion batteries, which could account for the reduced range.


The introduction of the new Model Y Rear-Wheel Drive (RWD) marks another significant milestone for Tesla in its quest to make electric vehicles more accessible to the general public. With a lower base price of $43,990 and the availability of various federal and state incentives, the Model Y RWD offers a compelling package for those looking to make the switch to electric mobility.

The lower price point, combined with the $7,500 Federal EV credit and additional state-specific incentives, significantly lowers the financial barrier to entry. This is particularly true in states like Colorado and New Jersey, where multiple incentives can be stacked to bring the price down to unprecedented lows. In doing so, Tesla is not just expanding its customer base but also contributing to the broader adoption of electric vehicles.

Saurav Revankar
Saurav Revankar
Saurav is a distinguished expert in the electric vehicle (EV) industry, known for his in-depth knowledge and passion for sustainable technology. With a particular focus on Tesla, he provides insightful analysis and comprehensive reviews that make complex EV topics accessible and engaging.


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