Highland Model 3’s are not worth buying right now

I know many will disagree and downvote me. But I want to share my perspective as an owner of two Model 3’s for the past five years, as well as being a TSLA shareholder.

Tesla has a huge surplus of inventory right now, primarily with the Model Y. That has created a unique window where you can buy a Model Y for substantially less than the HIghland Model 3. The combination of the available $7,500 instant tax credit along with significant inventory discounts make the Model Y a steal right now.

Contrast that with the Model 3 where you have to choose between the lackluster RWD model, or pay an extra $8,750 to upgrade to the LR AWD model. Neither model is eligible for the tax credit and neither one can be purchased from inventory at a discount. The RWD model is slower, lacks AWD, has shorter range and a lower end audio system.

A LR MY can be purchased after tax credit for $37,490. Compare that with the LR M3 at $47,740 and you will pay an extra $10K+ for a smaller car with similar performance and range. Even more compelling is the Performance Model Y, which can be purchased for $40K. We don’t know the price of the Model 3 ludicrous but we can assume it will be thousands of dollars above the price of the LR model. I would guess the spread between MY Performance and M3 Ludicrous will be close to $15K. And the M3 is the smaller car. 0-60 on the MYP is 3.5 vs 2.9 on M3 Ludicrous. Both are very fast.

There is a lot of pent up demand for Highland right now. It’s a very nice upgrade with a lot of nice touches. But even with the improvements it cannot justify the price premium over the Model Y. I predict in six months Highland models will be plentiful and inventory discounts will begin to materialize. However, unless they change the battery components it will still not qualify for the tax credit.

So why am I posting this? Because I predict there will be substantial discounts on Highland models once the initial orders are met. Soon to be followed by a wave of people posting how they can’t believe that Tesla lowered the price so shortly after launch and now they have lost thousands of dollars in equity on their cars. And then this will be followed by people responding that cars depreciate in value so live with it. The cycle keeps repeating itself. But it doesn’t need to. You can be a well informed buyer and wait until it’s actually a buyers market for the car.

It’s clearly a buyer’s market for the Model Y and a seller’s market for the Model 3. So take advantage of the incredible deals on the MY right now or sit tight and wait for prices to drop on the M3’s. It will happen. History has a way of repeating itself with Tesla. It’s only a matter of time.

EDIT:

I honestly wasn’t expecting so much attention to my post. I appreciate all the feedback and certainly don’t expect everyone to agree with me. I wanted to follow up on a couple of things that people have brought to my attention.

I should have mentioned that the pricing and tax incentives are specific to the US. Other countries have different pricing and incentives which could easily change the logic here.

It was not my intent to suggest that anyone who bought a Highland M3 made a bad decision. My goal was simply to point out to people who are new to the Tesla world that prices of Tesla vehicles can change very fast. We still hear about how under water people who bought in 2022 were. But I also believe that you should buy what you want. So if Highland is your preference by all means go for it. There is nothing wrong with paying a premium for something you enjoy. I just wanted people to have all of the information on the history of Tesla pricing so that they can make the best decision for their needs.

Thanks again for the great discussion!