Tesla’s base Model 3 and Model Y now have both cheaper starting prices than the average new car in the US.
This could open the eyes of more buyers who didn’t consider going electric before.
When studies look into the main reasons new car buyers are not considering going electric for the next vehicle, the price is generally one of the top reasons.
But the market has changed a lot in recent years.
Electric vehicles have gone down in price and inflation has greatly increased the average new car sale price in the US.
On top of it, US car buyers’ affection for bigger vehicles, like SUVs and pickup trucks, has contributed to boosting average new car sale prices.
In 2018, the average new car sale price was about $38,000 in the US. Now it sits at $47,000.
Bloomberg managed to track Tesla’s Model Y and Model 3 base price changes to the US new car average, and it has found that now both Model 3 and Model Y start below the average:
As you can see, it’s not the first time that the Model 3 base price has dipped below the national new car sale price average, but it is now the first time that both Model 3 and the increasingly more popular Model Y both have starting prices below the average new car sale price in the US.
That’s thanks to the launch of the new Model Y RWD, which brought the price of the electric SUV down significantly.
But on top of it, Tesla has recently decreased the prices across the rest of the Model 3 and Model Y lineup – making not only the base model cheaper but the entire lineup more competitive.
Electrek’s Take
Top comment by PeterO
The MSRP is just one measure. As much as franchise dealers are bashed for their gamesmanship with markups, the other side of the coin is dealerships can lower the prices, stretch on approving credit, and be generous with their trade in allowance. The legacy car makers often subvent the interest rates to help move the metal.
I may be a Tesla fan but they do a lousy job when it comes to valuing trade ins (extreme undervalue). I suspect their financing arm is not giving anything away either. Having sold, and leased new cars and sold pre-owned cars I have often seen the buyer choose the better deal and not their first choice. Aside from those who wrtite the big check, it most often comes down to" how much is the down payment and the monthly payment." Money talks and either way the customer is going to drive off in a car they like that is better than one they traded in.
That’s quite phenomenal, considering that it is the sticker price before accounting for incentives and fuel savings.
When you start adding those and looking at the entire cost of ownership, electric vehicles, and in this case, Tesla vehicles in particular, are such a better financial choice.
Now, I hope that they will maintain those prices, or at least something close to those prices, when inflation comes down and interest rates follow.
If that’s the case, my prediction that no one in their right mind would buy a new car that is not battery-electric after 2025 is going to come true.
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