Tesla raises Model 3 prices by $400, including the base-price version

Tesla has increased the prices of all Model 3 vehicles by $400.

Electrek reported the change Tuesday, noting that the price increase also applies to variants that aren’t available on Tesla’s website, including the base price, $35,000 model (which shall henceforth be called the $35,400 model). 

It hasn’t been easy to keep track of Tesla’s erratic price changes recently, but at least this latest change is straightforward: All Model 3 cars now cost $400 more than before. So, if you go to Tesla’s website and click on Model 3, the cheapest one on offer (in the U.S.) will be listed at $39,900. 

Tesla confirmed the changes to Electrek, saying that it “periodically” adjusts pricing and available options. And a Tesla letter to employees, obtained by Electrek, confirmed that the change applies to off-the-menu versions of the car as well. 

The company struggled hard to finally launch the Model 3 at the $35,000 price point in February, which was promised by Tesla CEO Elon Musk four years ago. However, it all but killed that model by removing it from the online menu in April and making it arguably less desirable (the Standard trim, which was promised for the base-price model, was never really available; instead, the cheapest Model 3 comes in Standard Plus trim but with several features software-disabled).   

This latest price hike is another indication that Tesla needs every dollar it can get to stay profitable. To be able to sell the Model 3 at the $35,000 price point, Tesla announced it would be closing down the majority of its physical stores (though it later backtracked on that decision and raised car prices instead). Musk also said that Tesla’s FSD (Full Self-Driving) option would get “substantially” pricier over time. And after the dismal Q1 earnings report the company raised $2 billion in debt and equity.