After two more cuts to Model 3 prices, Tesla’s cheapest vehicle starts at $42,990. That doesn’t include a $7,500 US tax credit for electric vehicles that went into effect in January, which for those who qualify would bring the price down to $35,500 — almost $12,500 less than the average price paid for a new vehicle in the US
Here is another way to look at it.
But no matter how one measures it, the Model 3 has clearly crossed the line. The upfront sticker price, without credits or fuel savings, now sits $800 below the cheapest BMW 3 Series, one of its closest competitors.
And finally,
For an even starker comparison, check out the cost of a three-year lease. The Model 3 now has almost exactly the same monthly payment as an entry-level Toyota Camry LE, when structured with similar lease terms.
The cost of batteries will continue to fall, both technical innovation and manufacturing efficiency are not complete. I do not foresee industry maturity before 2030, more likely 2040, with the 2030’s being a hot bed of manufacturing expansion.
The EV “S” curve is pedal to the metal, firing on all battery cells!
In 2022 Tesla unit sales grew by 40% while ICE unit sales were negative and that was before the price cuts. With the price cuts Tesla is pretty much guaranteeing it can sell all it can produce.
I’m anxious to hear Tesla’s March 1 Investor’s Day presentation.
On the old boards there was a teotwiki discussion board. They talked about storage of survival supplies and weapons to defend them. The Boston bombing was discussed there.
What struck me is the corollary to all these pricing observations - that a brand new BMW 3 series can be had for about $4K less than the average price paid for a new vehicle in the U.S. Weird, huh? You’d think a Beemer would be expensive, given that it’s a luxury mark. But no - it’s below average price. And not by a little bit.
Well, of course, there’s a leeeetle bit of legerdemain in there. Bloomberg’s not showing 100% of their work…but in context, it looks like they’re doing two things that folks use to write these kind of attention-grabbing articles. First, they comparing MSRP (for the vehicles they want to show as cheap) with Average Transaction Prices (for all new cars). More importantly, though, they’re comparing costs of sedans with the ATP of all new cars, not just sedans.
That’s why the BMW 3-series (along with the Tesla) comes off as a cheaper than average vehicle in this comparison, even though BMW hasn’t done anything much for their pricing. MSRP is almost always lower than ATP. But more importantly, the ATP for sedans is always much lower than the ATP for all vehicles. The below’s a bit old, but at the beginning of last year the ATP for a midsize sedan was about $32K, while the ATP for all vehicles was about $46K. Because most light vehicles in the US market are SUV’s or trucks, which are as a rule much more expensive than sedans.
So while the MSRP for Tesla’s Model 3 (and a BMW 3-series) is somewhat cheaper than the average price of a new vehicle, they’re both way higher than the average price of a new midsize sedan.
