Pickup trucks still dominate vehicle sales in the United States, but electric vehicle manufacturer Tesla has cracked the top 10 for the first time. Tesla’s Model Y crossover was the sixth best-selling vehicle in the U.S. in 2022, but it might soon have internal competition from the company’s Model 3, which now has a sticker price starting below $40,000.
The Model 3 — a four-door sedan with rear-wheel drive — is already popular and is the least expensive model in Tesla’s line. As reported by CNBC, it currently sits at 13th place in 2022 vehicle sales at 211,641 units, per Motor Intelligence data.
Cutting $2,000 off the Model 3, it has a base cost of $39,990, making it a relative “bargain” among EVs. This is true even though it is still more expensive than many hybrid plug-ins and 2023 EV models, like the Chevy Bolt EUV, the Mazda MX-30, the Hyundai Kona Electric, and the Kia Nero EV, per Edmund’s rankings.
However, the Model 3 is now less than the average price of a new car, making it a more affordable option for consumers looking to switch over to an electric vehicle. Back in February, when the Model 3 was priced at $42,990, Bloomberg reported that it was selling for $4,930 less than the average new American vehicle.
This is the sixth time Tesla has cut prices on its electric vehicles this year, and the second time this month. As CNN reported, the decision to lower prices and ensure lower short-term profits were necessary, according to CEO Elon Musk.
“While we reduced prices considerably in early Q1, it’s worth noting that our operating margin remains among the best in the industry,” Musk said. “We’ve taken a view that pushing for higher volumes and a larger fleet is the right choice here versus a lower volume and higher margins.”
Unfortunately for existing and future Model 3 owners, the price cuts, which were announced prior to the company’s first-quarter earnings report of April 19, coincide with the reductions in EV credits imposed by the U.S. Treasury which went into effect April 18. Credits for the Model 3 have been slashed to $3,750, but all other Tesla models will still be eligible for the full $7,500 credit as mandated by the Inflation Reduction Act.
According to Engadget, Tesla also cut the price on the consumer’s favorite Model Y. The base, Long Range, and Performance Model Y vehicles have been trimmed by $3,000 and now cost $46,990, $49,990, and $53,990, respectively.
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