After all, its price is around $35,000, and it has a range of approximately 200 miles. And it’s only $7,500 after a $7,500 dealer tax credit (because that’s all you need, after all). You get most of that bang for your buck in the form of an automatic transmission, which has proven itself an incredibly reliable, fun-to-drive, all-electric sedan, but if you want more speed, you could always go get a faster, more powerful one. The biggest challenge to this is that there isn’t a direct equivalent in the United States, either.
But Tesla doesn’t just have a more affordable version; the company is working on cars like the Model X SUV . It’s a large SUV with the same overall shape, but it’s capable of seating 12 like the Model 3 sedan. So we’ve got a lower-trim Tesla in the US. But if it were cheaper, this would make it very popular. And it’s not just for American consumers; it’s sold in a huge number of other countries. Because as it stands, its US competitor is a pure EV.
I’m going to say the same thing about how the other global companies that are making EV cars want to market them through their car manufacturers. The Tesla does, it’s called the Model 3, and it’s going to be that car that’s going to be the next big thing in the EV market. But it also opens up more opportunities for companies like Renault that have been selling the Opel Ophelia in Europe for the last couple of years and that have already started promoting the new 3 variant in Europe. Tesla is the only brand out there that can provide this level of range for just $7,500. But even though they’ve got this base price, for a smallish sedan with a smaller range, Tesla isn’t going to have an insurmountable lead.
What about the US? I don’t know what’s going to happen there with the “fast-selling electric sedan” that I predicted for Tesla’s price, but the market is definitely evolving, even right now. You’re also seeing companies such as Volvo and BMW promoting their new electric car offerings. Even if the next generation of Tesla cars gets a similar range as the current Model S and Model X, its still a significantly more affordable car. So what do these car makers think about this issue? Is Tesla’s $7,500 price a disadvantage for them? If they don’t need it to get this price, why offer it at all? And what about the carmakers whose sales are still dependent on a small base price?
To a car company, I’m sure they’ll be even more concerned about a lack of base price than they were to a competitor selling cheaper vehicles. And for them, as a result, it makes sense to make their car less expensive for the sake of having that base price that they can then sell to people who would consider the $50,000 base model for their own family. I’m not saying a car company should do this, but I do think that if a car maker is going to sell a $7,500 vehicle, it might as well do so at just the lower price point.
The Model 3 already has a base price of about $35,000, but if you want it to have 200 in the range, then you have to either go to a $25,000 base price, or pay an extra $7,500. There are a lot of companies looking at this and thinking “well, do they have any other product at that price that’s cheaper?”
The answer is no and no. The cars that Tesla has right now are way out of your budget. There is a Tesla Model S at ~$80,000 with a range of 200 miles or a Tesla Model X at more than $200,000 with a range of 400 miles (because of the additional $7,500). All of these things aren’t so different as I thought they would be until someone pointed out the reason the Model X might have a smaller range than the Model X at $200,000 .
Because the Model X’s range is just a fraction as high as the range of a Model S or X, it’s clearly not a product that is going to be selling with the $7,500 base price and it definitely won’t be selling at, say, a $70,000 base price. In fact, the Tesla is only going to have enough volume to support a small niche market on its own at the moment. That’s certainly a change from the days when a Toyota Camry could pull in a lot of money on the used market for about $29,000 (and sold for $40,000 in