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TheearliestTeslacarsrolledoutatveryhighpricepoints,andTesla’scarsarestillexpensivecomparedtotheindustryaverage.Although,Teslahasbeenfocusedonloweringitspricesrecently.
AsofMarch2023,itsModelXstartsat$99,990anditsModelSstartsat$89,990,down9%and5%,respectively,frompreviousprices.TheModelXPlaidandtheModelSPlaidarenow$109,000,whichisapricedropof8%and4%,respectively.
TheModel3startedat$42,990asofMarch2023,andtheModelYstartedat$54,990.
LearnmoreaboutthelimitsforthetaxcreditforelectricvehicleslikeTesla,howtheyimpactthetotalcost,aswellasothercostsassociatedwithowningaTesla.
Basiceconomicsdictatesthatwhendemandforaproductishigh,thepricerises.
TeslaisconstructinganenormousGigafactoryintheNevadadesert.Thefacilityallowsthecompanytoscaleupproductionofbothitscarsandthebatterypacksrequiredtopowerthem.Itsgoalistoproduce500,000carsperyear.
BatteriestostoreanduseelectricalpowerarethemostexpensivecomponentofTeslacars.Oneofthecomany’smaingoalshasbeentoreducethebatterycostsperkilowatt-hourforitscars,andthecompanyhasmadesomesignificantheadwaytowardthatgoal.
ForTeslacarstoqualifyforthefull$7,500taxcreditundertheInflationReductionAct,thecompanymusteventuallyabidebysourcingrequirementsforbatteries.MineralsandothercomponentsusedtomakeEVbatteriesmustprimarilycomefromNorthAmerica.
Thefederaltaxcreditofupto$7,500forelectricandhybridvehicleswasphasedoutforsomemodelsthatreachedcertainsalesthresholds.UndertheInflationReductionAct,thosemodelsnowqualify,butmoreexpensivemodelsnowdonot.Buyersmustmeetcertainincomelimitsaswell.
The$7,500taxcreditappliestonewvehicles.Usedvehiclesmayreceiveataxcreditofupto$4,000or30%ofthesalesprice,whicheverisless.Moreexpensiveelectricvehicles,suchastheModelXandModelS,donotqualifyforataxcredit.Toqualify,sedansmaycostnomorethan$55,000andtrucksandSUVsmaycostnomorethan$80,000.
ThemostaffordableTeslaModel3,whichhasabasepriceof$42,990asofMarch2023.AnothermoreaffordablemodelistheModelY,whichstartsat$54,990.TheModelXandtheModelSarethemostexpensiveTeslamodels.TheModelXstartsat$99,990andtheModelSstartsat$89,990,
YoucannotnegotiatethepriceofaTeslaintheshowrooms.ThepricesTeslasetsarethefinalfixedpricesofthevehicles.
ThepricesofTeslamodelsarehigherthantheaveragecostofanewvehicle,howeverTeslaownerwillsavemoneyonfuelbyusinganelectricvehicleoveragasvehicle.Dependingonhowfaryoudriveyourvehicle,itmaybecheaperinthelong-runtoownaTesla.
TheothermainreasonwhyTesla’spricesarehighisthehighcostoftheelectricbatterypacksthatpowerthesevehicles.Whilethecostofbatterytechnologyanditsenergyefficiencyhaveimprovedoverthepastfewyears,electriccarsarestillsignificantlymoreexpensivethantheindustryaverage.