Could the Tesla Model 3 be within reach for most Americans?

Tesla Model 3

A major blocker for most Americans embracing the idea of replacing their gasoline-powered vehicle, besides the limited range, is the price. Even with federal and state tax incentives, the Model S and X are still out of reach for the average American, which earned an average of $53,657 last year.

With the latest Nissan Leaf and the upcoming Chevrolet Bolt launching soon, both promise extended ranges from their predecessors (the Bolt is complementing the Volt in GM’s expanding EV line). The upcoming Model 3 (sadly, no E) takes aim at the Bolt and similar competitors in both range and price.

With the Model S and X occupying the upper end of the Tesla range, the 3 was designed to be the volume seller. How will the newest American automaker achieve this? By offering a MSRP of $35,000 before incentives.

Which should drive the price to around $25,000.

$25K appears to be the magic number, because pricing Tesla’s latest will put the vehicle within reach for most Americans, given that the average transaction price for a vehicle is now at $31,000. In order for the Model 3 to get to that price, Tesla is relying on not only the federal tax incentive of $7,500 (subject to change), as well as additional incentives based on the state where they’re purchased. California, Massachusetts, and Tennessee offer new EV owners an additional $2,500, whereas Colorado offers a whooping $6,000 (here’s the complete list).

While Tesla looks to expand its footprint across America, the next step in becoming a full-fledged company is to successfully roll out the Model 3 at a price point that will entice more Americans into leaving the petrol behind, possibly forever. Will they be successful? Tesla insists that they will, but all of the stars will have to align in order for them to pull it off.


Photo Credit: Theophilus Chin

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