Tesla keeps on updating the prices of its vehicles regularly. It depends on how the market is playing at a particular time, and also on meeting quarterly sales goals. Over the course of last year, almost all the cars in Tesla’s lineup have undergone price cuts. This time, they have opted for slashing the prices of the entry-level variants, aka, Standard Range, of the Model 3 and Model Y.
The reduced prices were seen on the updated online configurator of the official company website. The price of the Model 3 Standard Range went down from $37,990 to $36,990. On the other hand, Model Y went from $41,990 to $39,990.
Even though Tesla slashed the prices of the Standard Range variant, the Long Range variant retained its earlier cost. Interestingly enough, the prices of the Performance variant for both vehicles increased. The Model 3 Performance now costs $55,990 instead of the earlier $54,990, while the Model Y Performance costs $60,990 rather than $59,990.
Implications of these Price Cuts
The new $36,990 price tag on the Model 3 will reel in a number of budget-conscious buyers. With California State offering a $1,500 Clean Fuel Reward, and the potential $7,000 tax credit planned by the Biden administration, the Model 3 Standard Range could effectively be priced at less than $30,000.
Similarly, the Model Y Standard Range is set to benefit from this price cut. The direct competition to Model Y is from Volkswagen ID.4. It starts at a price of $39,925, which means that there is now cut-throat competition between the two from a financial perspective. Furthermore, combustion crossovers are also in a similar cost bracket as the Model Y now. Adding the $7,000 tax credit, Model Y is set to offer huge value-for-money, and become the hottest commodity in the crossover segment.
With extremely competitive pricing, Model 3 and Model Y will keep selling like hotcakes, just like they have in the past 2 years. The reduced price of the Standard Range variant will definitely attract people who are looking to shift to electric cars. A not-so-powerful car, with decent range and impressive specs for an under-30K tag, is a definite head-turner.
Sizing Up The Competition
What Tesla is doing with these price cuts is take on the small car segment of electric vehicles. Nissan Leaf and Chevrolet Bolt are two small electric cars that have been around for quite some time now. But the newest Chevrolet Bolt starts at $31,995, while the new Bolt EUV is $3,000 more. The Nissan Leaf also starts at $31,620. The new pricing of Model 3 enables you to buy an electric sedan from the industry leader in the USA at just $5,000 more. Surely, upcoming customers of the Bolt and Leaf will rethink their decisions.
And if you absolutely want a smaller Tesla, you can wait a couple of years, as Tesla’s $25,000 car is coming soon. What specs and range Tesla offers through that vehicle is unknown yet. But it will definitely topple the market on the Leaf and Bolt, along with the upcoming Volkswagen electric small car.
According to statistics, Tesla sold 79% of electric cars in the United States last year. In 2019, that figure was 80%. People had expected 2020 to be Tesla’s decline, what with the virus affecting demand in the market. But Tesla rode the wave, and it is because of such timely price cuts. They have been able to keep their technology relevant in the market at a very reasonable price. And now, they are offering sedans and crossovers that cost just a little more than small cars like Chevrolet Bolt and Nissan Leaf.
2021 is set to be one of the biggest years for electric vehicles. A lot of new cars are coming to the market, and we’ll have to wait and watch if these tactics help Tesla stay ahead of the curve.