The Tesla Model Y outsold all other electric vehicles (EV) last year, and now the price of the base model is less than that of the average for all American cars and trucks.
According to business and financial publication Bloomberg, the base Model Y is selling for $46,990, which is $759 less than the average paid for any U.S. gas-powered car or truck.
The drop in price is reflective of the company feeling the heat from competitors as most carmakers enter the EV market.
Middle Class Car
Jason Bloomberg, a Cheyenne physician and longtime supporter of electric vehicles, told Cowboy State Daily that the cost of new EVs is coming down to the point that they’re within the financial reach of middle-class Americans.
His stepdaughter and her husband picked up a Model Y in New York, and he’s going down to Loveland, Colorado, on Monday with a friend who is buying a Model Y.
“Neither of them are in what you would say are the upper economic brackets,” Bloomberg said.
He said that besides purchase price, the cars, over their lifetime, offer savings in fuel and maintenance over that of comparable gas-powered vehicles.
Rubbing Their Noses
Bloomberg said Teslas are sold with one of the largest margins per vehicle than any other car manufacturer. Now, he said, they’re passing a chunk of that margin to customers as other makers are entering the market.
“There’s also probably a bit of spite involved on the part of Tesla, to be honest about it. They’re rubbing their competitors’ noses in it, because the legacy car companies did what they could to basically Tucker Tesla,” Bloomberg said, referring to Preston Tucker.
Tucker was an automobile entrepreneur in the 1940s who attempted to establish a new American car company that competed with General Motors, Ford and Chrysler. He was eventually embroiled in accusations of stock fraud, of which he was acquitted, but his company shut down within a couple years.
Vince Bodiford, publisher of TheWeekendDrive.com based in Cheyenne, told Cowboy State Daily that Teslas are facing quality competition from the established carmakers. While they were slower than Tesla CEO Elon Musk to get into the EV game, now that they’re in it, they’re doing it better.
“You juxtapose their quality against a Tesla, and the Tesla’s really shoddy quality stands out,” Bodiford said.
He said it’s also partly because Tesla’s image as the new thing is wearing out with consumers, and the company’s image revolves around Musk. The other car companies have no brand perception tied in with a personality.
“Musk is a lightning rod,” Bodiford said.
With that brand attraction failing, especially as Musk expresses more opposition to the left through his social media platform Twitter, buyers are looking more at reliability, performance and quality, Bodiford said.
Bodiford said that when Musk dominated the EV market, there wasn’t a lot to compare it to. Teslas were compared to gas-powered cars and sold because they were electric.
Now there are other EV models that are attracting customers away, Bodiford said, with something that competes on quality.
As an example, Bodiford pointed to the electric IONIQ 6 from Hyundai. Its standard range sedan model goes for $41,600.
“It’s a beautiful car, beautifully styled and of unbelievable quality. That’s going to be a big problem for Tesla,” Bodiford said.
He said big carmakers really know how to make cars, and they are going to come in and compete with EVs people are going to want to buy.
The big auto companies “understand the automotive business. And not because they're big, but because they're good,” Bodiford said.
He added that Musk deserves credit for carving out a new class of vehicle, but that happens all the time. The minivan, pioneered by automotive manufacturing icon Lee Iacocca, carved out a new category too. They’re not in very high demand anymore.
“Now the industry is caught up with him [Musk], and not a day too soon,” Bodiford said.