Price of Tesla Model 3: It’s never been this cheap to buy a Tesla.
Over the past month, Tesla has implemented a series of price cuts for its vehicles, resulting in the Model 3 sedan being sold at $4,930 less than the average new vehicle in the US.
This is the lowest price Tesla has ever had in comparison to the typical US vehicle, according to Bloomberg’s analysis. The price of the Model Y sport utility vehicle also saw a significant drop at the beginning of the year, with a $13,000 decrease. Despite the price cuts, the Model Y remains one of the top-selling SUVs in the US.
Tesla’s price reductions have caused a ripple effect in the industry, with other automakers such as Ford, Lucid Group, and Rivian Automotive announcing discounts and layoffs in response.
General Motors is also set to launch electric versions of its Chevrolet Blazer and Equinox SUVs later this year, signaling the start of an EV price war. Analysts suggest that the EV market may be entering a “shake-out” phase.
In contrast, the prices of gasoline-fueled cars have been on the rise due to a shortage of computer chips, raw material inflation, and manufacturers’ decisions to keep inventories low and prices high while they invest in developing electric cars.
As a result, the average cost of a new vehicle has increased by over $10,000 since the start of the pandemic, reaching $47,920 in January.
Tesla’s Model 3, after two more price cuts, now starts at $42,990, excluding the $7,500 US tax credit for electric vehicles introduced in January.
With the tax credit, the price could go down to $35,500, which is almost $12,500 less than the average price of a new vehicle in the US.
Investors have long awaited the point when electric cars would reach price parity with their combustion engine counterparts.
Although it’s difficult to determine when that moment arrives, the Model 3 has undoubtedly crossed that line. Its sticker price is now $800 lower than the cheapest BMW 3 Series, one of its closest competitors.
Even a three-year lease for the Model 3 has a similar monthly payment to an entry-level Toyota Camry LE.
While Tesla’s ever-changing prices are unique in the auto industry, it’s worth noting that the company may reverse course and increase prices again.
Bloomberg reports that Tesla is preparing to give the five-year-old Model 3 a facelift, similar to when it refreshed the higher-end Model S and Model X interiors in January 2021, which led to record-low prices before Tesla raised them by 12% to 15% over the next 18 months.
However, Tesla’s expanding production at its new plants in Texas, Berlin, and Shanghai may require more price cuts to maintain demand.
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