Price war: Tesla’s Model 3 in the USA compared to other cars cheaper than ever

• Tesla repeatedly reduced the prices for Model 3 and Model Y
• Model 3’s lowest price ever compared to the average US vehicle
• Thanks to electric car-Funding in the USA is effectively even cheaper

After the prices for Tesla’s electric vehicles had risen steadily in recent years, the US electric car manufacturer has lowered its prices several times in recent months. In addition to China, South Korea, Japan, Australia and Singapore, the Musk Group also reduced the prices for its vehicles in the USA and Germany. In the US, Tesla even lowered its prices four times within two months.

Model 3: Cheapest price compared to average US vehicle

Tesla recently lowered the price of the cheapest entry-level model, the Model 3 with rear-wheel drive, by another $500 to $42,990. According to a new Bloomberg analysis, this is the cheapest price Tesla has ever had compared to the average US vehicle.

In the first full year of production, 2018, Tesla’s Model 3 cost about 15,000 US dollars more than an average new car, according to a Bloomberg graphic according to Teslamag.de. Since then, that figure has fallen rapidly, and thanks to the price cuts, Tesla’s Model 3 is now $4,930 less than the average new car sold in the United States.

Model Y prices also dropped

The US electric car manufacturer also reduced the prices for its Model Y significantly – at the beginning of the year even more than for the Model 3 – so that the gap to the US average was now smaller than ever for this model, reports Teslmag.de with reference on Bloomberg. Recently, however, prices have risen again somewhat here, while they have continued to fall for the Model 3.

US funding for electric cars

The price changes in the US are likely to have another reason besides stimulating demand after Tesla missed its sales target last year. In the USA, for example, a subsidy program for e-cars recently came into force as part of the Inflation Reduction Act (IRA), through which buyers of e-sedans with a sales price of up to 55,000 US dollars or e-SUVs with a sales price of up to $80,000 assembled in the United States will receive a $7,500 tax credit. If you factor in this subsidy, the price for the cheapest version of the Model 3 basically drops to $35,490.

Therefore, it may have been important for Tesla that the Model 3 did not exceed the price of US$ 55,000 and the Model Y the price of US$ 80,000 including additional equipment, so that buyers could benefit from the tax premiums and Tesla from the effectively even lower prices may also benefit from even higher demand.

Leasing is also relatively cheap

According to Bloomberg, the Model 3 is now not only cheaper to buy than the average new US car, but also the leasing rate is relatively cheap, reports Teslamag.de. The leasing rate is similar to that of the Toyota Camry, the purchase price of which is well below the US average. For Tesla’s Model 3, Bloomberg came to 349 US dollars per month, with a leasing period of three years, 5,544 US dollars special payment and 10,000 miles per year, while the Toyota should cost 4 US dollars more per month with otherwise the same conditions.

Investor Day: Tesla wants to further reduce costs

After the sometimes significant price reductions of the past few weeks, the Tesla boss emphasized Elon Musk at an investor day last week, according to dpa, that the price is the biggest obstacle for many to buying a Tesla car. This suggests that prices are likely to continue to fall in the future. In addition, Tesla chief engineer Lars Moravy announced at the investor day that the costs of producing the next generation of vehicles could be reduced by up to 50 percent. Tesla could then also come closer to a model for 25,000 US dollars, which Musk had already promised in 2020 and which would replace the Model 3 as the US group’s cheapest entry-level model.

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