How Low Will the Model 3 Price Go?
The Model 3 RWD - Tesla's least expensive vehicle, is now selling for $42,990. This is down from its all-time high price of $46,990. Tesla is also charging $1,000 for the midnight silver metallic color, which used to be free.
Did you know: That my Model 3 RWD that I bought in August 2022 had a 30-mile stretch of 160 watt-hours-per-mile with a projected range of 327 miles? That's 6.25 miles per kWh - not bad!
I purchased a Tesla Model 3 RWD about a year ago, and my wait time to get it was 7 months. I've owned it for just over half a year now. The wait time for a Model 3 RWD today is Feb - Mar 2023. This means that you will get it within about a month if you order it right now.
Whenever I see wait times that are a month or less for a Tesla vehicle, I am happy because it means people will get their Tesla sooner rather than later. It could also mean Tesla is getting on top of production, and Elon Musk has even said he thinks wait times are too long to get Tesla vehicles.
In this case, I think that Tesla will be lowering the price again soon in order to increase the demand for the vehicle. As always, it's simple economics. When you have a backlog of orders, you raise the price. When you have no backlog, you lower the price to drive demand. These two levers of economics drive prices in today's world.
I expect to see it drop another few thousand dollars and settle somewhere at $39,990. That's a steal with the current federal tax credit and with states offering credits, many would buy the car at that price point. It also puts it closer to its original launch price of $35,000.
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What About the Model 3 Long Range?
What about the Tesla Model 3 long range? This vehicle has 358 miles of range and two motors, making it a higher performing and higher mileage car than the Model 3 RWD. The only difference here is that the Model 3 RWD with 272 miles of range uses LFP batteries which generally last longer than Lithium-ion batteries and the LFP batteries can be charged to 100% without as much degradation.
My Model 3 RWD has LFP batteries and after about 6,500 miles and just over half a year, I've degraded about 2.5%. I expect at the year mark it will be about 5%. This is about half of what a Tesla vehicle is expected to degrade after its first year of use. After the first year, I expect it to degrade about another 1% of battery life each year after that.
This means that at 10 years of life, that would be 14% degradation or a battery range of 234 miles. Many Model 3 RWD owners report that their vehicles have much more range available than that, so only time will tell in how my car does. If I still have the car after 10 to 15 years and the frame is holding up well, I don't see why I couldn't get an upgrade on the battery - hopefully battery prices at that time have come down greatly.
Elon Musk has said that the LFP battery on my car should last 500,000 miles or more. Hopefully he also means that with no more than 30% battery degradation. I'll have to keep an eye out for Model 3 owners and their experience.
I expect to see the Model 3 Long Range come back this year, and it will be somewhere between $49,990 and $54,990. If Tesla somehow increases the range to say 372 miles, then I think that will give it even more appeal for those who like a little bit more range.
If I were in the market for a new Model 3 RWD, I would wait for the prices to come down a bit more. Of course, this isn't guaranteed, but that is where I see things going right now for it.
Do you think the price of the Model 3 RWD will go down more?
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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.