The Tesla Model 3 RWD is cheaper than a Honda Accord by about $600. How is this possible?
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Tesla Model 3 RWD Cheaper Than a Honda Accord
The Tesla Model 3 RWD is cheaper than a Honda Accord, when you factor in the U.S. tax credit of just $3,750 and a Massachusetts state tax credit of $3,500.
The Honda Accord ends up having an MSRP of about $34,985 and the Tesla Model 3 RWD has an MSRP of about $34,380 after the tax credits.
Elon Musk has said many times that the many challenge for a Tesla is affordability. If you take him at his word, he is doing exactly what needs to be done to address this - and that is to lower prices. I think this is what has to be done for Tesla's vehicles in order for more people to afford them - advertising won't help people afford a Tesla.
Tesla is taking advantage of reduced costs in the supply chain and battery minerals along with manufacturing improvements and the ramping of its Giga Berlin and Giga Texas factories that will be more efficient than even Giga Shanghai.
You can even take the $605 price difference and purchase a Tesla Wall Connector and still have $150.25 left over. The Honda Accord is also subject to a markup by a dealer, whereas with a Tesla you know exactly what you are paying upfront when you check out and buy it online.
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EV Incentives Will Drive EV Adoption
Massachusetts isn't the only state with incentives. Oregon and California have incentives as well, and I think other states are going to follow suite. I live in Utah, and I expect in another year or so, that there will be incentives done here.
The reason I believe this is that people are going to take advantage of these state tax credits and I think some people will even contact those living in another state to buy their Tesla and then buy the Tesla off the person who bought it in another state and maybe even pay a few extra hundred dollars for the service of doing so.
Of course, there may be laws and rules against doing that, but a state offering these kinds of incentives is more attractive than not for those who see that cars are moving to EVs and that gas cars will be obsolete by the end of the decade.
If interest rates come down, Tesla's vehicles are going to be even more affordable, as you have the double positive effect of them lowering prices and having a lower interest rate on a lower dollar amount. High prices and high interest rates is a double whammy, as it makes the cost higher in two ways - the higher price and the higher interest rate on the higher price.
Look for more states to start offering EV incentives as the movement toward EVs accelerates. Do you think more states should be offering EV incentives?
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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.
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