With a new range of incentives and price reductions, Tesla’s Model Y is quickly becoming the go-to option for eco-friendly and budget-conscious SUV shoppers in the US. The company’s latest move could pave the way for the Model Y to dethrone the Toyota RAV4 and become the best-selling SUV in the US by 2023.
In 2022, the Tesla Model Y was the second best-selling SUV in the US, with 252,000 sales, trailing only the Toyota RAV4, which sold 399,941 units. Despite the fact that the base model of the Model Y is twice the price of the RAV4, Tesla’s latest price cuts have made the electric vehicle much more affordable for a broader range of consumers. Since January, the company has reduced the starting price of the Model Y by about 24% and also made it eligible for a federal tax credit of $7,500. As of now, the Model Y can be purchased for 10% less than the average price of a new car sold in the US.
Tesla’s decision to reduce the price of the Model Y by 24% in just three months is a rare move for a car that is in mass production. This level of price reduction can only be compared to the impact that Henry Ford’s assembly line had on the price of the Ford Model T in the 1920s. With the latest price reduction, the Tesla Model Y now starts at $49,990, or $42,490 for those who are eligible for the federal tax credit. This price point is approximately $5,300 less than the average price of a new car in the US in March.
The Impact of Tesla Price Cut
The impact of Tesla’s latest price cuts is expected to be felt across the industry, particularly among competitors who continue to produce cars with internal combustion engines. The move is a significant blow to those who have failed to invest in electric vehicles, especially as Tesla continues to increase its production capacity in the US. In 2022, the Model Y ranked 6th in the overall ranking of best-selling cars in the US, registering a 32.4% increase in sales while all other cars in the top 10 registered a decline. If the trend continues, we can expect significant changes in the US auto sales market, where the Model Y has good upside potential.
Tesla’s latest price cuts are a game-changer in the US auto market. The move is expected to give the Model Y a significant boost in sales and could potentially make it the best-selling SUV in the US by 2023, dethroning the Toyota RAV4. The combination of a federal tax credit and a 24% price reduction in three months has made the Model Y more attractive to a broader range of consumers. With Tesla’s production capacity continuing to grow, the electric vehicle company could further improve its position in the overall ranking of best-selling cars in the US.
While Tesla’s latest price cuts are certainly a significant development in the US auto market, it’s important to understand the broader context in which they are occurring. In recent years, the electric vehicle market has been steadily growing, with a greater number of automakers investing in the technology. However, despite this growth, electric vehicles still only account for a small percentage of overall vehicle sales in the US. According to the International Energy Agency, electric vehicles accounted for just 2.7% of global car sales in 2020.
One of the main barriers to wider adoption of electric vehicles has been their cost. Electric vehicles have traditionally been more expensive than their gasoline-powered counterparts, which has limited their appeal to budget-conscious consumers. However, Tesla’s latest price cuts suggest that this may be changing. With the Model Y now available at a price point that is comparable to traditional SUVs, more consumers may be willing to consider electric vehicles as a viable option.
Another factor that has limited the adoption of electric vehicles is range anxiety, or the fear of running out of battery power while driving. However, the Model Y’s range of 279 miles is more than enough for most daily driving needs, which could help to alleviate these concerns.
It’s also worth noting that Tesla’s success is not solely due to its price cuts. The company has built a strong brand reputation for producing high-quality, innovative electric vehicles that offer exceptional performance and features. Additionally, Tesla has invested heavily in its charging infrastructure, which is essential for the widespread adoption of electric vehicles.
However, while Tesla’s latest price cuts may be good news for consumers, they could have broader implications for the auto industry as a whole. If Tesla continues to dominate the electric vehicle market, it could put pressure on traditional automakers to invest more heavily in the technology or risk being left behind. Additionally, the increasing popularity of electric vehicles could have significant implications for the oil industry, which relies heavily on gasoline sales.
If Tesla continues to dominate the electric vehicle market, it could put pressure on traditional automakers to invest more heavily in the technology or risk being left behind. Additionally, the increasing popularity of electric vehicles could have significant implications for the oil industry, which relies heavily on gasoline sales.
Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded TorqueNews.com in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube.