Much of the recent discussion about Tesla has revolved around the smaller, less expensive Tesla (the “Model C” or “Model 2,” as it is often called). In particular, there was shocking news that Tesla had halted the project in order to focus on the Tesla robotaxi. The majority of people who follow and support the company seem to think this would be a big mistake. The world needs more quality, cheap electric cars; Tesla needs a clear path to achieve much higher total sales. Win-win. So why kill the one who makes the difference?
Well, I won't dare answer that question here. But there is one aspect worth discussing that does not receive enough attention. The Tesla Model 3 and Tesla Model Y are actually cheap if you step back for a moment. Remember, we're looking at the new car market, and the market is different today than it was in 1990, 2000, or even 2010. Most people buy used cars. People who can afford a $20,000 new car, but not a $40,000 new car, buy used cars – they feel like they're getting more for their money. American automakers have abandoned almost all of the cheap cars they once produced.
The average price of a new car in the United States is currently $47,244. The Tesla Model 3 and Tesla Model Y are much less so if your goal is to save money and not need a lot of extra features or battery cells.
Tesla Model 3 pricing, on request, starts at $38,990. Rental starts at $329 per month. (Tesla model liability amount only) — consult a tax professional for details or advice regarding your situation). In other words, you can get a new Tesla Model Y for about $10,000 less than the average selling price of a new car!
These are crazy deals and great value. I don't think most buyers realize this context or how expensive it is to own a Tesla now. I also think Tesla does a very poor job of advertising to people who don't know about it. However, it should still be a great sales driver, and I hope that unrivaled value at or below the average new car selling price will help Tesla maintain a strong position in the US auto market. I don't know if Tesla can achieve significant sales growth with just two mainstream models (and a possible third model if the Cybertruck can make it happen), and I wouldn't bet money on it today. But when it comes to talking about affordable new cars or recommending a good new car to a friend, Tesla has positioned itself very well. For what you get at this price, the Model Y and Model 3 are expected to be the best-selling models in the United States in 2024.
Instead of being part of the "those really expensive cars" group, Tesla needs to find better ways to tell people that the Model 3 and Model Y are some of the cheapest cars you can find on the new car market. How many people know that you can get a Tesla for about $10,000 less than the average selling price of a new car?!
