How does the Tesla Model 3 lower the price of electric vehicles in the United States?


  • According to Cox Automotive, the average price of electric vehicles in the United States decreased by about 13% over the previous year.
  • This drop is largely due to Tesla Model 3, which starts at $ 38,990 (before the incentives).
  • The Cox study also indicates that Tesla accounts for approximately 80% of electric vehicle sales in the United States, the majority being model 3.

Tesla: a disrupter in the EV space

US electric car manufacturer Tesla (TSLA) disrupted the entire space reserved for electric vehicles when it entered the market. Previously, most builders only built electric vehicles to comply with zero emission regulations. They wanted to continue selling gasoline cars in key markets by meeting emissions standards. General Motors (GM) and Ford (F), for example, tried out electric vehicles, but were mostly interested in the positive publicity generated by this attempt.

It was only when Tesla launched its cars that electric vehicles became the norm. With the Roadster, then with the S and Y models, Tesla introduced the potential of electric vehicles and changed consumer perceptions about them. With the launch of Model 3 in March 2016, Tesla has powered electric vehicles into the mass market. He received more than 400,000 bookings for the car in less than a month.

Tesla's Model 3 has lowered average prices for electric vehicles in the United States.

The disruptive power of Model 3 is confirmed by a recent study by Cox Automotive, reported by Quartz. According to the study, the average sales price of electric vehicles in the United States is falling thanks to model 3. While the average price of an electric vehicle in the United States was $ 64,300, this amount fell 13.4% to $ 55,600 in 2019. Most This decline results from Tesla Model 3, which started at $ 38,990. The study also added that lower prices could have been more pronounced if traditional automakers did not focus on luxury electric vehicles.

The Audi e-Tron and Jaguar I-Pace, for example, position themselves against Tesla's top-of-the-line models, the S and X models, priced at $ 74,800 and $ 69,500 respectively at $ 85,900.

The potential of model 3

Tesla's Model 3 has been rated Best Electric Car by YouTube's leading automotive reviewers because of its technology, drive, and driving experience. According to Inside EVs, US sales of Model 3 in July of this year were higher than those of the following 16 combined models. Until 2019, Tesla had sold about 81,100 units of its Model 3 to the United States in July. The model even exceeds luxury models such as Jaguar's I-Pace and Audi's e-Tron.

On August 20, Moody's Investor Service improved its outlook on Tesla from "negative" to "stable." Tesla's change of perspective vis-à-vis Moody's was that it "reflected his achievement of the large-scale production of Model 3 after struggling with important manufacturing technologies. and assembly obstacles. "

EV adoption rates will increase with lower prices

While sales of the electric vehicle market as a total of the US auto market are still meager at 2%, they are catching up quickly. Tesla's electric vehicles and other electric vehicles are always more expensive than internal combustion engine vehicles. The high upfront costs, however, offset the price gap over time due to reduced fuel and maintenance costs. JPMorgan Chase expects electric and hybrid cars to account for 30% of all vehicle sales by 2030. Economies of scale, increased competition and lower battery costs are expected. lead to high rates of adoption of electric vehicles in the future.

According to Teslarati, Ron Baron, of Tesla, said in a conversation with CNBC that Tesla had reduced the prices of its cars thanks to everything she had learned in the space. "They are building for 70% less than it would cost for the same cars to build in the US and 30% less than it would have cost to build a year ago."

Tesla: the leader in the electric vehicle market in the United States

Teslarati cited Cox Automotive's data that Tesla vehicles currently account for 80% of all electric car sales in the United States. In addition, most of Tesla's EV sales are model 3. A previous Cox study found that Tesla was primarily responsible for the growth of electric vehicles in the United States. According to this study, 81% of car buyers likely to buy an EV were considering buying Tesla. Toyota was second only to 52%. Chevrolet, Nissan and Honda were accounted for by 47%, 42% and 39% of electric vehicle buyers, respectively.

Tesla will launch model 3 made in China China

After disrupting the US space for electric vehicles, the Model 3 is expected to be launched in China to a large extent. Tesla started selling the Model 3 in China in February. However, the launch of its model 3 manufactured via its Chinese gigafactory could change the game for the company in China. Read China Tesla's Gigafactory could it be its secret weapon? to learn more.

Tesla shares fell 10.8% this month, versus 2.9% for the S & P 500 (SPY). The decline in Tesla is mainly due to the decline of the market as a whole, as well as negative news specific to companies. From accidents to solar panel fires, he has had a lot of problems lately. In comparison, Ford and GM are down 5.6% and 9.7%, respectively, this month.

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