The $36k Tesla Model 3 is here.

Please note that this post is about a vehicle, and not a person. Let's talk about cars, it's more fun than talking about people.

I'm sure this will be all over every news outlet in about 60 seconds, but Tesla did a major price cut last night. The Model Y has dropped in price by $14k, and combined with the current federal tax credit that makes for some pretty significant pricing. 

But what caught my eye is that the RWD Model 3 is now at $44k. With the $7500 tax credit, that means the $36k Model 3 is here. Not only that, but I'm pretty sure that's an LFP chemistry car. The current Model 3 might look like a 2018 car, but there have been some fairly significant changes under the sheetmetal over the years including a heat pump (more efficient heating) and that battery chemistry change. That's a heck of a deal.

The Model 3 Performance (since we're a motorsports car forum) also took a fairly significant price drop, it's down to $54k before the tax rebate. If you can get past your feelings about certain personalities, this is a great time to electrify. I think that tax credit is only around for a couple of months (for sure) so this may not last.

I'd stretch the budget a bit and get a $36k Model 3. I've driven the base RWD on the street and in earnest at AutoX a bunch and like it a lot. Plus I know a guy that modifies Teslas so that's also a factor.

Tesla is starting to feel the heat from other manufacturers out there putting out their own EVs.

Been saying for a while that they need to start innovating again or they'll one day end up getting bought out by another manufacturer.  Lowering prices isn't innovating.

The price and credit is intriguing, but what is real world lifespan of a Tesla Model 3?

Would it make 10 years while putting 20-25k miles a year on it in a state that uses salt?

The innovations are all happening under the skin and in the factories. You don't get annual "The All-New 2023 GTR!" type press releases so you don't see it.

The Gigapress cars are significantly less expensive to produce. The big capex for the new factories is paying off with production volumes. Battery prices have been dropping as well, and this $36k car is running a totally different chemistry. They've got crazy margins in the cars and the margins have been growing.

This gives them the ability to cut the prices when they decide they should. They're using prices to manage their production backlog, which is exactly what the other manufacturers do - but on the showroom floor instead of MSRP. You don't see front page articles when Ford changes the rebates on the F150, but it's the same behavior.

Keith Tanner said:I think that tax credit is only around for a couple of months (for sure) so this may not last.

I have been all morning on the website looking at a Model Y long range.

Do you know how the federal tax credit works? Is it applied at the time of sale to the car price or you actually get a credit towards your 2023 taxes?

Keith Tanner said:

 You don't get annual "The All-New 2023 GTR!" type press releases so you don't see it.

This made my lunch break. 

In reply to Slippery :

Refund on Taxes. From the IRS:

You may qualify for a credit up to $7,500 under Internal Revenue Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV). The Inflation Reduction Act of 2022 changed the rules for this credit for vehicles purchased from 2023 to 2032.

The credit is available to individuals and their businesses.

To qualify, you must:

• Buy it for your own use, not for resale
• Use it primarily in the U.S.

In addition, your modified adjusted gross income (AGI) may not exceed:

• $300,000 for married couples filing jointly 
• $225,000 for heads of households
• $150,000 for all other filers

You can use your modified AGI from the year you take delivery of the vehicle or the year before, whichever is less. If your modified AGI is below the threshold in 1 of the two years, you can claim the credit.

The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.

In reply to bmw88rider :

Thank you!

In reply to Keith Tanner :

Out of sight, out of mind.

If the innovation can't be pointed to, the average consumer isn't gonna care about it. They especially won't if said innovation means they get to adjust the price of their car at whim.  Me buying a car one month to have my neighbor buy the exact same car the next month at thousands less is not going to endear me to that company.  It REALLY won't endear me to them if they have touted how they take all the struggle of dealerships out of the equation and how the price you see is the price you get.

Their US market share is down 14% from 2020 to 2022, global is similar numbers as far as I know.  It is expected to be under 20% within the next 3 years or so.

This is a grab for what market share they can, while they can. 

No Time said:

The price and credit is intriguing, but what is real world lifespan of a Tesla Model 3?

Would it make 10 years while putting 20-25k miles a year on it in a state that uses salt?

 

Paging 84FSP

He is using a M3P under those conditions I believe.

I'd be thinking about it if the Chevy Bolt wasn't on the table, but as it is I can't really justify a $36k Model 3 when a $19k Bolt exists. 

My wife would also kill me if I bought a Tesla due to above-mentioned certain personality.

In reply to Erich :

Walk me through the Bolt.  When I build one it's almost $30k.  What site should I be on?

Datsun310Guy said:

In reply to Erich :

Walk me through the Bolt.  When I build one it's almost $30k.  What site should I be on?

I think it's some combination of federal tax credits and GM rebates that's only going to be valid for a couple of months. A friend of mine just got one for $21k.

As for the $36k Model 3, isn't that about what they cost when they first dropped the price back in 2019 before Covid and chip shortages made everything explode in price?

Yeah I dont see any 19K bolts either - it may be a regional thing though.

I have a 2018 M3P that I try hard to hate but cant.  Had it 2 years now with over 72k on it now (25k+ miles / year).  I live on a dirt road with with the Nokian R3's on it, its our designated snow car.  Its stays dirty but I've had like no issues with it (maybe some squeaky UCA?).  My car has the "old" tech batteries and electric heat but still get 280 miles on a full charge.  I dont get that in actual range cause I drive 80-85 all the time.

Looking at the tesla site I see NEW 2023 cars are at the same price as the used 2022 (and earlier) cars :)  

Very cool! The Bolt is still what I would choose for reasons aside from the personality thing, but I really do like the 3/Y and that's a fair price. It's now cheaper than the average ICE car, and will save money over the life of the car (and be better for the environment) ((and way nicer to drive than the average ICE car))

In reply to Mr_Asa :

Given that the Model Y is the best selling car in Europe, I'm not sure they're suffering all that badly.

Basically, this move is no different than Toyotathon. It's just being done at the MSRP level instead of "we'll give you a rebate for having a red car and a rebate because it's November and a rebate because you looked at a Toyota once before". Manufacturers have always manipulated the actual selling price of their cars. 

Is it a failure of marketing? Quite possibly. I prefer it but the buying public definitely responds to "set it high and mark it down" as much as I hate that. 

Keith - What are your thoughts on how TSLA moves as a result of this. It has shed nearly a trillion dollars in value over recent time. I'm wondering if this may be the trough (realizing it has bounced up a bit in the past few days).

In reply to dyintorace :

I am not a stock market person. I leave that to others :)  I keep my opinions to the stuff coming out of the factories.

I can't imagine what that did to resale value of the used ones on the market.  Imagine if you bought a new one last month, ouch

In reply to Steve_Jones :

I imagine that there are a bunch of new Model Y owners that are pretty cheesed right now.

In reply to Mr_Asa :

The only reason their market share is dropping is because the ev market is growing so fast. Their sales increased 40% in the last year. 

Tom_Spangler (Forum Supporter) said:

Datsun310Guy said:

In reply to Erich :

Walk me through the Bolt.  When I build one it's almost $30k.  What site should I be on?

I think it's some combination of federal tax credits and GM rebates that's only going to be valid for a couple of months. A friend of mine just got one for $21k.

As for the $36k Model 3, isn't that about what they cost when they first dropped the price back in 2019 before Covid and chip shortages made everything explode in price?

Yeah this is it. The Bolt with heated seats option (all of them locally seem to have them) is $28k MSRP. The fed tax credit gets you down to $20,500 thru March. On top of that almost everyone in Metro Detroit qualifies for GM f/f pricing which is another $2500 off. 

That's ~$18k for a base Bolt with the heated seats. 

Keith Tanner said:

I imagine that there are a bunch of new Model Y owners that are pretty cheesed right now.

Having beers tomorrow with a friend who's (sweet) Model Y is three weeks old. I'll let you know what he says!