Outlook For Tesla Budget Buyers Has Changed Radically, & Predicted To Change Even More!

Dan Smith

This article largely ignores Elon's Twitter drama and the TSLA stock drama, and just how much has changed between the current two lowest-priced models for Tesla buyers interested in a Model 3 or Model Y. focus. I am a Model 3 and Model Y fan and my family currently owns 2 Model Ys and 1 Model 3. There are many things I love about Tesla, but the cost of owning a Tesla car is much lower than similarly priced BMWs, Mercedes, and Audis. For four years I've found that driving a Model 3 is as affordable as driving a Honda when you include fuel savings, maintenance and repair savings, and recent depreciation savings (due to longer life and over-the-air updates) We've been claiming that it could be priced as high as an Accord or a Toyota Camry. The Model Y is also affordable, but its price has skyrocketed in the last 18 months. (Note: Aldrich Bautista (@AldrichBautista) maintains the Tesla Car Price History Tracker.)
Image Credit: Aldrich Bautista @AldrichBautista

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Image Credit: Aldrich Bautista @AldrichBautista

Cheapest Model Y available in the US will go from under $40,000 (Standard Range RWD) in February 2021 to $65,990 (Long Range AWD) in June 2022, $26,000 or That's a 65% increase! The apples to apples comparison is $49,990 to $65,990, a $16,000 or 32% increase. The reason for these price increases was to discourage purchases until production increased in Fremont, Texas, Shanghai and Berlin to meet demand. The Model Y is so popular that the waiting list is often six months or longer, and Tesla respects the price you get for paying a $250 ordering fee. So if people book cars two or three years in advance of him, and inflation drives up labor costs and material prices, Tesla will run into problems and have to sell cars at breakeven or at a loss. I was worried that it would go away. I reserved a Model Y three years before his, and this spring Tesla told me that I would either buy the car or cancel the reservation. I waited until her daughter could get in the car. Her daughter bought the Model Y shortly before it was ready, but it didn't make sense to let Tesla cancel the order because the price was more than $10,000 below her market price. Tesla also believes that a long waiting list doesn't translate into a great customer experience. I tend to agree that a pricing system is a good way to match supply with demand.

what changed?

A few things have changed in the last few months. [embed]https://www.youtube.com/watch?v=61Pr5j7fMAU[/embed]
  1. The economy slowed. Some people say we're in a recession, some people don't think we're in a recession. Others (like Elon) think a recession is coming. No matter how you look at it, auto loan interest rates have risen significantly, and that's what's causing the used-car bubble to burst. See the Mannheim used car index for more information. A more interesting way to follow the market is to listen to his Lucky Lopez on his YouTube channel.
  2. Tesla has significantly increased production in Shanghai, and Model Y production in Berlin and Austin. They have increased production in Fremont a bit.
  3. I would say the competition has increased, but that's not a big factor in the US. It's a Chinese and European factor.
  4. The Model Y is priced at $65,990, which isn't nearly as good as $39,990.
  5. The Control Inflation Act has been passed and many changes will take effect on 1 January 2023. No one knows if Tesla cars will qualify for the full $7,500 tax credit or just half the tax credit for a week, but when it was announced, the rules for "critical minerals and battery component requirements" was postponed until his April a few days ago. People have come to the conclusion that everyone building an EV in North America gets a pass for the first few months. delivery. Why not wait a week and save $3,750? I increased it to $7,500 and threw in 10,000 free Supercharger miles (probably worth $1,000) as a bonus. depending on usage).
  6. Tesla investors are concerned about weak demand for Tesla's cars and a sluggish stock price.
  7. Elon Musk has been more outspoken about his personal politics (I would classify him as moderate to slightly right, but some may disagree), and this view is shared by many in the United States. progressives, which have traditionally upset those most likely to buy Teslas and other electric vehicles. vehicle. On the other hand, Elon's more right-wing views make cars more acceptable to half of the right-leaning countries. Overall, I think this is slightly negative for demand, but it could go either way. It's too early for me to judge.
  8. This week, Elon appeared on Twitter Spaces (Callin, Clubhouse, etc.) and said a lot, but importantly for this article, he was asked how Tesla will deal with the global recession. When the answer is that growth can be slowed down. To maintain profit or increase volume more quickly at the expense of profit. He said (in line with Tesla's mission to accelerate the transition to electric vehicles) that it will choose growth over profitability as long as Tesla has sufficient cash reserves to avoid possible bankruptcy. Stated. As a Tesla shareholder, I'm not thrilled with the answer, but it's welcome to the environmental community. It seems that some people do.)


We expect the more affordable Model 3 and Model Y to be available sometime next year. I don't know if he'll be in January, April, or later this year, but considering Austin and Fremont are churning out Model 3 and Model Y vehicles, we need a Tesla. (Elon clearly understands this). Make vehicles available at low prices.
  • The Model 3 is already available for under $40,000 with $7,500 of Tesla credit. Expect Tesla to announce on January 1 that he is eligible for a $7,500 tax credit. Tesla also earns thousands of other incentives for producing battery packs in the United States. Then, depending on how demand evolves throughout the year, Tesla will either keep the entry-level Model 3 price ($7,500 after tax) under $40,000 or increase it by several until demand equals supply. We expect to reduce $2,000 each month. I think by the end of the year the net price will be $35,000 for him and maybe he'll be under $30,000. With a Tesla Model 3 under $30,000, it becomes very difficult for Toyota to sell so many Camrys and Honda to sell so many Accords.
  • The Tesla Model Y sees an even bigger change. Model Y's entry-level pricing is expected to drop below $40,000 (from $65,990 just a few weeks ago) when it reintroduces the standard-range rear-wheel-drive (RWD) Model Y in the coming weeks or months. doing. After that, the price (including the $7,500 tax credit) could drop below $35,000 or $30,000 depending on how demand shapes in 2023. Recall that Tesla has consistently stated that the Model Y will cost as much to manufacture as the Model 3. But I think it will be necessary because Tesla has more capacity to build the Model Y and they don't want those gigafactories running at less than full capacity. We price Model Y very aggressively.
good car bad car Tesla now believes it sells over 100,000 cars in the US each quarter. They listed the Model Y as his eighth best-selling car in the third quarter and the Model 3 as his 11th best-selling car. Pricing the Model 3 and Model Y at $30,000 to $35,000 (after tax) would allow Tesla to nearly double sales of those two to about 200,000 per quarter. This is what I expect Fremont and Austin to have in production capacity in 2023. This will make the Model Y overtake the Toyota RAV4 as the best-selling crossover, and the Model 3 overtake the Toyota Camry as the best-selling crossover. will be a sedan. It will be a while before the Cybertruck takes on the Ford F-150 to become America's best-selling truck. Before I predict it, let's see how the first production goes. Disclosure: I am a Tesla shareholder [TSLA]BYD [BYDDY]Nio [NIO]XPeng [XPEV]hertz [HTZ]However, I do not offer investment advice of any kind here.   Take the 2022 CleanTechnica Reader Survey for a chance to win an electric bike.       Appreciate CleanTechnica's creativity and cleantech news reporting? Consider becoming a CleanTechnica Member, Supporter, Technician, Ambassador or Patreon patron.  
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