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.
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Cox Automotive, the world's largest automotive services and technology provider, has released a forecast predicting that Tesla will lead the luxury market in Q1 2023 with sales of 180,000 units, a gain of nearly 40% from Q1 2022. As a result, Tesla is expected to post solid sales gains and surpass a market share of 5% for the first time. This marks a significant achievement for the electric car maker as it continues to gain market share in the luxury car market.
Improved Inventory and Lowered Prices to Spark Demand
By far, Tesla will be the top luxury-vehicle seller in the U.S. in Q1, with sales more than double that of BMW or Mercedes. This impressive performance is likely due to Tesla's innovative technology, sleek designs, and rising brand recognition.
Tesla's success in Q1 2023 is expected to be primarily driven by improved inventory levels and lowered prices. According to Cox Automotive, new-vehicle inventory levels have significantly improved from Q1 2022, which has helped stimulate sales despite elevated prices and high auto loan rates. Tesla also lowered its prices in the first quarter to spark demand.
Tesla's Record Quarter
Tesla's Q1 2023 sales are expected to reach 180,000, a record quarter for the company in the U.S. In addition, the company's growth trajectory continues to outpace its competitors, with Tesla's market share forecasted to surpass 5% for the first time. This puts Tesla on track to achieve its goal of selling 1 million electric vehicles per year, an ambitious target the company has set for itself.
Strong Outlook for Tesla
Cox Automotive's forecast is good news for Tesla investors and enthusiasts. The electric car maker has been expanding its production capacity to meet the rising vehicle demand. Tesla's Model Y, launched in 2020, has been a hit with customers, with the company ramping up production to meet the high demand. Tesla also plans to launch the Cybertruck, its first all-electric pickup truck, in 2022.
As more consumers look to switch to electric vehicles to reduce their carbon footprint, Tesla's growth prospects are expected to remain strong. The company's continued innovation in the electric car space and aggressive expansion plans could help it solidify its position as a leader in the automotive industry.
Other Key Take Aways from Cox
The release suggests a positive surprise for U.S. auto sales in Q1 2023. Still, supply constraints and affordability issues are expected to put a ceiling on what's possible for the rest of the year. Despite these challenges, Tesla's continued growth trajectory and strong performance in the luxury market are promising signs for the electric car maker.
General Motors is expected to finish Q1 as the top seller of new vehicles in the U.S., with sales volume forecasted to increase by over 15% year over year to reach 587,000 units. However, sales will drop from Q4 2022 when GM's volume hits 618,692.
The Bottleneck Has Passed, but Prices Are Too High
New-vehicle inventory levels have significantly improved from Q1 2022, up roughly 70% from the volume recorded in the early months of 2022. This has helped stimulate sales despite elevated prices and high auto loan rates.
Fleet sales for the entire year of 2023 are forecasted at 2.2 million, up 23% from 2022, when 1.8 million units were sold to commercial buyers.
Cox Automotive has adjusted its full-year new-vehicle sales forecast to 14.2 million, an increase of nearly 3% from 2022.
Elevated prices and average auto loan rates above 8% are expected to hold back new-vehicle sales for the rest of the year. The typical new-vehicle loan payment was more than $750 a month in Q1, which is out of reach for many households.
Tesla's sales forecasted to surpass 5% market share in Q1 2023 is a significant milestone for the electric car maker. Tesla's success in the luxury market is due to its innovative technology, sleek designs, and raising brand recognition. In addition, the company's improved inventory levels and lowered prices have helped stimulate sales despite elevated prices and high auto loan rates. With a record quarter forecasted for Q1 2023, Tesla's outlook remains strong, and the company continues to lead the charge in the electric car market.
Tesla is updating its app to show the vehicle's planned path to its destination
Not a Tesla App
Tesla is consistently working to improve its mobile app experience for users, and now they're adding another new feature. Building on the features unveiled last year, Tesla is now adding the ability to view the route the vehicle is taking toward its destination. Thanks to Max for the tip!
Navigation Path
When using GPS navigation, the app directly displays the driver's destination, distance, and estimated arrival time (ETA) on the main screen. By tapping into the navigation section, users can access a map that shows the vehicle's location, nearby Superchargers, and destination details. The app also displays the vehicle's expected state of charge upon arrival at the destination, providing greater transparency for owners regarding battery consumption. The one missing piece was the suggested route the vehicle is taking to reach its destination. That is now being added to the app and is available for select users.
In the last Tesla app update, v4.19, the company introduced a new API called "nav route." This API looked to go unused at first, but this new feature appears to leverage this API to display the path the vehicle will take, much like the in-car navigation system.
Building on Latest Update
The October 2022 update brought a host of additional features to the Tesla mobile app, enhancing convenience for its users. For instance, the app now shows more information about the media playing in the vehicle, such as song title, artist, and destination details.
Energy Enhancement
The automaker rolled out major revisions to its Energy app in its cars, which displays the battery's state of charge upon departure and arrival, as well as the main causes of battery drain. Tesla started bringing this functionality to the app for older Model S and Model X vehicles, and will hopefully soon expand it to other vehicles.
The app will provide a detailed breakdown of energy usage for various features, such as air conditioning, driving, battery conditioning, elevation, and other components like charging mobile devices, onboard computers, lights, and the audio system.
As Tesla continues to hire additional app developers, users can anticipate further updates and improvements to the mobile app, offering more helpful features and enhancing the overall user experience.
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