Tesla's Model 3 Now Costs Less Than the Average New Car

By Kevin Armstrong
Tesla's Model 3 now costs less than the average new car
Tesla's Model 3 now costs less than the average new car
Tesla

For years, auto investors have placed bets on when electric cars would reach price parity with their combustion counterparts. With Tesla's recent price cuts and government incentives, the company has now achieved this milestone for the Model 3. A Model 3 is now less than the average price of a new car, making it a more affordable alternative for drivers looking to transition to electric or upgrade their vehicle.

The Price Gap Between EVs and Gas Cars

According to Bloomberg's analysis, the price gap between the Model 3 and the average new vehicle sold in the US has never been wider. A Model 3 is now $4,930 less than the average price of a new car. Without credits or fuel savings, the sticker price ($42,999 USD) now sits $800 below the cheapest BMW 3 Series, one of its closest competitors.

While Tesla is reducing the price tag, the cost of gasoline-fueled cars has gone in the opposite direction. The average cost of a new vehicle has risen more than $10,000 since the beginning of the pandemic, reaching $47,920 in January. This rise is driven by a shortage of computer chips, raw material inflation, and car manufacturers' decisions to keep inventories low and prices high while investing heavily in developing electric cars.

Expanding EV Market

Tesla's price cuts have sparked a ripple effect among other automakers. Ford has slashed the price of its electric Mustang Mach-E, while Lucid Group offered $7,500 discounts, and Rivian Automotive announced layoffs. In addition, General Motors is slated to launch electric versions of its Chevrolet Blazer and Equinox SUVs later this year, right in the middle of America's first-ever EV price war. Meanwhile, the Model Y has also seen a substantial price cut of $13,000 earlier this year, making it the third-best-selling SUV in the US, behind the Toyota RAV4 and Honda CR-V.

Affordability Driving EV Adoption

That price tag may decrease even further when the refreshed Model 3 appears. Reuters reported that Project Highland would go into production in Shanghai in September. The goal of the refreshed Model 3 is to increase efficiency and cut production costs. We already know Tesla is eliminating the wood trim in the updated version, a cost-saving and environmentally friendly move. While the changes could bring the price down, it is worth noting that when Tesla refreshed the Model S and Model X, the prices jumped by 12% and 15%.

The increasing affordability of Tesla's vehicles may drive the adoption of electric cars and contribute to the growth of the EV market. If Tesla can continue to offer price cuts, it could attract more new buyers as the company ramps up production at its new plants in Austin, Texas, and near Berlin, while expanding capacity in Shanghai. There's never been a better time to buy a Tesla.

Why You May Still be on Tesla Update 2024.8.9 or 2024.3.25 and What to Expect

By Karan Singh

Tesla’s latest set of updates has been fast-moving, with lots of bug fixes, and this fits with Musk’s philosophy of moving fast and breaking things. Some people are still on 2024.8.9, some are still on 2024.3.25, and some people are already on the 2024.14.8 Spring Update, and there’s also the brand-new 2024.20 update that just went out to employees for testing.

Let’s take a look at how Tesla’s software distribution system works, and why you are where you are.

Statistics

Before diving deep into how it all works, let’s get some statistics out of the way. We’ll be using the statistics we use here on the site, which are powered by TeslaFi.

The vehicles on each update
The vehicles on each update

As we can see, the tracked fleet is about 30% 2024.14 – the spring update; 2024.8 – Tesla’s previous major update, which contains FSD V11; and 2024.3 – the FSD V12.3 update. The remaining fleet on 2023.44 or other updates is fairly negligible, at around 10%.

So, about 65% of the tracked fleet has access to FSD V12, depending on their country of origin. The remaining 25% of the fleet only has access to FSD V11 if they’re in an eligible region.

FSD Update Track

When someone subscribes or purchases FSD, Tesla enables the FSD feature on that vehicle’s firmware, which currently could be either FSD v11 or FSD v12.

Once you’ve subscribed to FSD, you’re generally on the ‘FSD Track,’ which means you’ll start receiving the latest FSD updates, but will generally receive Tesla features later than Tesla’s primary, non-FSD branch. Tesla’s FSD track has historically always been behind the main branch, and it has been that way since FSD Beta first went out to customers years ago.

Vehicle Eligibility

Not all vehicles are eligible for all updates, and this is a twofold reason. First, if you’re on an update that is on a newer branch, say 2024.8.9, you cannot go down to 2024.3.5. The version number is broken down to year, week number and revision. So update 2024.8.9 is the 9th revision of the update that was created on the 8th week of 2024.

In general, Tesla does not roll back versions, so if someone is already on update 2024.14, then their vehicle wouldn’t be eligible for FSD 12.4, which is update 2024.9.5. This is mainly due to potential issues since Tesla doesn’t thoroughly test rolling back software.

Your vehicle will always be eligible for updates on a later branch, even if you won’t necessarily receive that update – like the many owners on update 2024.8 or 2024.3 who haven’t received update 2024.14 yet.

The second factor is hardware. Vehicles on older hardware variants, or vehicles that are considered to be legacy, are just not eligible for some updates. This is something that Tesla decides as newer hardware is needed for newer features and support for legacy hardware may not be included in all updates.

If you’ve subscribed to FSD and you’re on update 2024.8.9 and wondering why you’re not receiving update 2024.14, that’s why. Tesla wants your vehicle to be eligible for the next FSD v12.4 update, which will be update 2024.9.5.

Vehicle Variants

Sometimes, updates are not sent out widely for the simple reason of hardware variants. Tesla’s fleet has become widely fractured over the years, with many different variants of vehicles on the road today. Some 2022 Model Y’s may have Matrix headlights, while some may not, and some may have USS, while others don’t. Most have HW3, but a few have HW4!

That’s 6 possible branching variants in one year – a total of 24 possible variants for just the 2022 Model Y, not including the Performance, Long-Range, Rear-Wheel Drive, 4680-cell Rear-Wheel Drive, and the odd 2022 Standard-Range Dual-Motor variants that are also all different! If you did the math, there are 362 thousand possible variants, but not likely more than ~40 or so actual builds that Tesla differentiates between for software for all vehicles.

Of course, Tesla has managed to pare down these variants through the 2023 and 2024 model years, with greatly simplified production chains, with the removal of USS in favor of Tesla Vision, the full move to Hardware 4 across all factories, and Matrix headlights becoming standard globally. But all those existing vehicles are not legacy, and still need updates.

That means a complex and well-thought-out update process has to be built in order to deploy a functional update to all these vehicle variants.

Bug Fixing

Besides the complexity of vehicle variants, Tesla also has to catch and fix bugs. No matter how good one is at software development, sometimes bugs just escape into the wild. And fixing those bugs is essential since they could leave a vehicle undriveable. Although a major issue is rare, Tesla has had some issues in the past, such as Automatic Emergency Braking being disabled due to a software issue. This is why Tesla rolls out updates gradually.

We’ve seen this play out with update 2024.14, which has received numerous bug-fix releases. Tesla will release an update to a set of cars, discover an issue, and stop the rollout. A few days later, another update is out with additional fixes, and so on.

Conclusion

So, if you’re stuck on update 2024.8.9 or 2024.3.25, and are wondering when you’ll get FSD V12 or the Spring Update, you’ll have to hang on – the author is also on 2024.8.9 with V11!

Elon Musk mentioned on X that FSD V12.4 should be the update the reduces FSD branching and will bring everyone to FSD V12 in general. 2024.9.5 is the FSD V12.4 update, and it looks like vehicles that are below that branch number should be collectively receiving the reduced-nag V12.4 update.

When we finally receive FSD V12.4, we’ll likely need to hang on for a little longer until FSD V12.4.1 or FSD V12.5 rolls along to have the Spring Update.

Impact Report: Tesla Vehicles 8x Less Likely to Catch Fire, Batteries Degrade 15% After 200k Miles

By Karan Singh

Tesla’s mission is to accelerate the world’s transition to sustainable energy by producing products far superior to fossil fuel alternatives and sourcing and manufacturing them sustainably. Tesla released its 2023 Impact Report yesterday, discussing their ongoing impact on the environment and the improvements seen.

Displacing Fossil Fuels

In 2023 alone, Tesla’s impact on the environment through its vehicles, Powerwall, and Solar Roof has been massively impactful – Tesla customers avoided releasing the equivalent of 20 million metric tons of CO2e into the environment. That is the equivalent of 51 billion miles of driving an average internal combustion engine (ICE) vehicle.

Each Tesla vehicle that is on the road avoids an average of 51 tons of CO2e emission into the environment. After just 3 years of driving, a Tesla’s lifetime emissions are lower than those of a comparable ICE vehicle. After the average lifespan of a vehicle in North America – 17 years – a single Tesla will have exceeded that value 5.5 times over.

Integrated Ecosystems

Tesla offers comprehensive ecosystems of products to address clean energy and transportation needs, from Megapack, Solar Roof, and Powerwall, to the Model S, 3, X, Y, and Cybertruck.

Tesla Solar produces power for storage in Megapacks or Powerwalls, which charge electric vehicles. Tesla also produces some of their own batteries, for both its storage applications and vehicles, enabling a complete cycle.

On the software side, products like Autobidder, Full Self-Driving, and the upcoming Robotaxi work to maximize the productivity of electricity that is stored in vehicles, helping to further displace fossil fuels in a single ecosystem of well-designed products.

Tesla's ecosystem depicted.
Tesla's ecosystem depicted.

World’s Best EVs

Tesla’s Model Y is still the best-selling vehicle in 2023, a trend likely to continue in 2024. And it’s not for little reason. It is the world’s most efficient EV, capable of running Autopilot/FSD, and is considered one of the best safety picks in both North America and Europe. Tesla’s data has also proven that they are, on average, 7.63 times safer than a traditional vehicle when running Autopilot.

Additionally, the Model Y is priced $3,000 USD below the average new vehicle in the US before the Federal EV Tax Credit – a difference of $17,000 after factoring in the credit and gas savings over 5 years.

Battery Degradation

Model 3/Y battery degradation over time
Model 3/Y battery degradation over time

Battery degradation is often brought up as a concern for EVs and the environment. Batteries fade away, become useless, and cannot be recycled. According to Tesla’s data and experience, this is far from the truth.

In fact, Tesla has found that their batteries degrade about 15% after 200,000 miles – the equivalent of the average lifetime of a vehicle. And in fact, they do even better in the cold than they do in the heat, with better degradation performance in Canada over the US.

Another interesting fact is that Tesla vehicles in particular – are 8 times less likely to be victim to a vehicle fire, compared against the US average.

Sustainable Sourcing

Sustainably sourcing materials is essential to reach Tesla’s vision of a world with reduced environmental impacts. In 2023, Tesla recovered enough battery materials to produce 43,000 Model Y RWD vehicles, while also sourcing Gigafactory Berlin with 100% renewable energy.

Overall, Tesla solar owners generated enough energy to power all Tesla locations, including all the Mega and Giga Factories, and all other facilities – over 3 times.

Tesla has also reduced water use by 25% over the last 5 years for vehicle production, marking a new milestone low – at 2.48 cubic meters of water, versus 3.37 cubic meters of water for an average ICE vehicle.

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