$25,000 Tesla Model 3 ‘Would Upend the U.S. Auto Market’
Tesla Motors will begin accepting orders for its mass-market Model 3 electric car next month, and founder Elon Musk is confirming a starting price of US$35,000—with incentives that could bring the total down as low as $25,000.
“The distinction Tesla is making here between the price before and after tax subsidies is crucial,” Bloomberg explains. “These tax incentives can knock off as much as $10,000 from the cost of purchase, drastically increasing the size of the market for the Model 3.”
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
The average new car in the U.S. costs $31,000, according to analysis by Bloomberg New Energy Finance, with SUVs and trucks accounting for most sales above that line. The conclusion is that “mass-market cars need mass-market prices,” Randall writes.
“A $25,000 Tesla would upend the U.S. auto market,” he adds. “Incentives vary widely state by state, but the base incentive is a $7,500 federal income tax credit available to everyone in the country. Bringing the $35,000 sticker price of the Model 3 down by that amount would expand the potential market by roughly 50%.”
But National Public Radio adds a note of caution to the story. “The Model 3 won’t go into production until 2017,” writes correspondent Camila Domonoske, and “if it’s delayed, the incentives that lower the price might not be available.” Tesla’s most recent new release, the high-end Model X, “was delayed for nearly two years, and since it was launched last fall, only a small fraction of the pre-ordered vehicles have been delivered.”