Tesla software limits Model 3 and Model Y power and acceleration to price them cheaper

While the federal government spends $200 million a month on EV tax credits that has allowed Tesla to make the Model Y cheaper than ever, the automaker has found other ways to benefit from government taxation.

Tesla software decompiler Green has found firmware flags referencing virtual limits of the base Model 3 and Model Y power output, hence acceleration numbers.

The so-called "soft performance limit" flag has the Model 3 at 110 kW power output and the Model Y at 159 kW, returning 0-62 mph accelerations of 8.5 seconds and 7.5 seconds, respectively. This is a huge power output drop for the Model 3 RWD, and a far cry from its 6.1 seconds acceleration number.

The practice, however, has allowed Tesla to slide its bestselling vehicles under government mandated tax brackets that apply to more powerful vehicles across the globe.

In Turkey, for example, the 159 kW Model Y RWD has let Tesla offer a price up to 50% lower compared to its peak tag if it would've slotted in the tax bracket for cars with 160 kW and above power output. Turkey's "special consumption tax" slaps at least 80% over all ICE cars.

To encourage EV adoption, that tax is 10%-40% depending on their power output and price bracket. Unsurprisingly, the software-limited Tesla Model Y RWD falls into the 10% tax category, while a 160 kW version would've been taxed either 50% or 60% depending on the price, so the move has allowed Tesla to offer the Model Y way cheaper without doing much but a "soft performance limit" flagging.

The 110 kW Model 3 in Singapore follows a similar logic that avoids high local taxation for more powerful vehicles. As can be seen in the Tesla Singapore screenshot below, the price difference between the Model 3 RWD 110 and the regular Model 3 is not significant.

The software-limited 110 kW model, however, now falls into Singapore's Certificate of Entitlement (COE) category A which is capped at 110 kW output for EVs. Were it to go into the next category B, the COE tax difference would've been the whopping US$8,455 equivalent, so Tesla and other EV makers are giving buyers there a choice.

Tesla is not a stranger to software limitations and recently introduced a new version of its Model Y RWD in the US that is essentially the same car but with range limitation removed by software, for a price.

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