Tesla Starting Prices Lower Than Average US New Cars

Kelley Blue Book reports that the average price of a new car in the USA is $47,077 which is higher than the $45,000 price of a base Tesla Model 3. In California the Tesla Model 3 gets about $5750 in incentive discounts.

Growth in used vehicle values is expected to continue through the spring of 2022, according to a Manheim forecast.

Chip shortages, supply chain and now truck protests are limiting the production of traditional automakers.

Toytota will miss an annual production target of 9 million cars per year because of chip shortfalls.

Ford, GM and Toyota are having production impacted by the Canadian and other truck protests.

There is likely to be another 7 million car shortfall of new cars in 2022. This was the shortfall in 2021.

In 2021, chip shortages and supply chain caused Ford to lose 1.26 million units globally, Volkswagen Group lost 1.15 million and General Motors at 1.09 million.

Higher lithium, cobalt and nickel prices are increasing the cost of lithium nickel batteries. It has a lesser effect on iron LFP batteries. Tesla is less impacted because of Tesla locked in long term contracts.

Battery grade lithium prices are already trading at a record high of $35 per kilogram in Asia, and are likely to keep climbing to $50 per kilogram in the second half of 2022 and trade at around $52.5 per kilogram in January 2023.

Rystad Energy’s monthly price index suggests that prices for battery-grade lithium carbonate ex-works China rose to CNY 300,000/tonne in early January 2022, up nearly 43% from CNY 210,000/tonne a month earlier. The price for battery-grade lithium hydroxide ex-works China rose to CNY 290,000/tonne in early January from CNY 192,000/tonne in early December.

SOURCES- KBB, Manheim, Rystad Energy, Reuters, Ford, Toyota
Written by Brian Wang, Nextbigfuture.com

18 thoughts on “Tesla Starting Prices Lower Than Average US New Cars”

  1. The use of the average price of all vehicles of $45k is misleading. The model 3 is a compact car but even if we use the mid size car prices, it is $31.5k on average.

  2. agreed.
    and many non-Tesla local, Big 5(?), and imports will hit private consumers, fleets, municipalities, and rentals…

  3. no no. with the new categories starting to populate: p-ups, big SUVs, possibly even camoer vans – untapped upper-middle classes will get on board… this summer, noticeable EV numbers – charger lineups, etc??? we'll see.

  4. i see a plateauing of EV in rich countries due to price and charge convenience, especially if fewer are commuting — only continued high oil/ gas prices in non-EU areas may push EVs. Better in 2024+

  5. as the majority knows… its where you fuel up..
    not convinced that enough people have the space, wherewithal, private access, etc to set-up a home charger — early adopters and top 25% wealth may see the operational savings and the future – though recent gas prices may push it…

  6. dealership network is not there. The traditional sales crew and their flunky mechs and techs will not emphasize EV sales (and its lesser fix needs)…

  7. Price is not the most important thing.
    Cheapest doesn't run the juicy margins at the Big automakers.
    Main vehicle battelgrounds yet to be fought: p-Up, large SUV, big transpo, beyond the suburbs/ smallest 50% cities/ red states.

  8. Interestingly, FSD may be the "enemy" of an affordable Tesla. If and when they crack the code, they will have no incentive to sell any moderately priced car at all…So, as a Tesla shareholder I hope for Tesla to figure out FSD and as a consumer I hope they don't…

  9. I agree. Never bought a new car in my life and I am middle aged.

    Also, as much as I like Tesla, I've come to the conclusion that buying a new Tesla is economically indefensible for us. With zero maintenance cost, zero fuel cost and zero taxes, we could at most save 5k per year. The depreciation of a new Tesla by itself is more than this. For a model X the first 5 years costs you about 50k, i.e. ~10k per year [1] and for a model Y it's about 6k per year [2]. For Europe, the prices are about twice the US prices (for now), which means depreciation of ~20k and ~12k per year respectively…And that would assume that you would need *zero* repairs/maintenance and that the cost of electricity would likewise be zero…

    So, I would really like a cheaper model X. I know that it's not in Teslas mission prerogative to make products that would make the customers happy, but it sure would be nice. After all, making an EV requires about half the man power compared to making an IC vehicle.

    When are we, the consumers, going to get electric cars that have lower sticker prices compared to IC cars? Could BYD make it happen with their blade battery (~60 USD per kWh)? Tesla does not really seem interested in making cheaper cars as long as the demand far outstrips the supply. Perhaps when Teslas production is, say, at 6 million units per year would the price come down somewhat?


  10. This seems quite misleading. Number of transactions needs to come into play, not just average price of a transaction per company.

  11. You know, when I was young, most people bought cars new, and they were affordable to most people. Really expensive cars were outliers.

    Now most people buy cars used, and the average new car is out of the question for the average person.

    Well, I suppose that works, now that cars can easily last a quarter million miles or more, instead of falling apart at 100K. But it does seem that the automotive industry is looking at their product as a luxury good these days, and are manufacturing a lot of cars most people couldn't even think of buying.

  12. What is the point here? There are also good Electric cars in the market that their starting price is lower than the model 3.

  13. Truck protests mean it is time to go to Space. No trucks!

    “The Roads Must Roll” by Robert A. Heinlein
    Have the trucks formed a union?

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