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Tesla Reducing Prices Is Working
Tesla had another record quarter of delivery and production of its vehicles. This was helped by a price reduction of its vehicles. But, there are other factors.
Take a look at this post that shows the price of Lithium continuing to go down. It is one of the many reasons that Tesla has been able to lower its prices.
Cost of Lithium last 5 years $TSLA pic.twitter.com/aHO7QHc8vS— Farzad Mesbahi (@farzyness) April 4, 2023
Material and supply chain cost reductions are just part of the equation when it comes down to Tesla lowering costs, however. Tesla wants the world to transition to sustainable Energy. They cannot do that if wait times are 6 months and the average price of a Tesla is over $50,000.
They can do it if they drive costs down and the average price of a Tesla is closer to $35,000 and the wait times are a month or less. This will transition the world to sustainable Energy much faster.
We got used to Tesla selling expensive vehicles for so many years with the Original Roadster and the Model S and Model X. It was only when the Model 3 came out in 2017 that we started to see some indication of a lower priced Tesla.
But, this didn't last too long because of supply chain and cost increase challenges. The Model 3 that was supposed to be $35,000 ended up being $45,000.
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Tesla Will Continue To Drive Down Costs
Fortunately, things are headed in the right direction, and we can see the prices of all of Tesla's vehicles coming down. The only vehicle that hasn't quite come down as much as it needs to is the Model 3 RWD.
I happen to own a 2022 Model 3 RWD, and I bought it for $43,500. It's now $42,500. I don't mind if the price of this goes down another $5,000 because this vehicle needs to be more accessible to others. It's still too expensive.
When we see the above price of Lithium start to get back to early 2021 levels, this is going to be a good sign for the EV industry. It will mean that Tesla can get back to their original prices - or at least close to it, and continue to take advantage of manufacturing improvements and economies of scale.
Tesla is going to keep lowering prices and will do what it needs to make that happen.
If I were to take a guess at what the future prices of Tesla's vehicles will be in 2 years time, here is my guess:
* Model 3 RWD: $38,000
* Model Y Long Range: $49,000
* Model S Long Range: $80,000
* Model X AWD: $85,000
* Cybertruck tri/quad motor (later this year): $79,900
One can hope, anyway. These prices would open more of the market to Tesla's vehicles.
Look for prices to continue to decrease this decade, both on existing vehicles, and with lower priced models.
In Related News: Production Beta View of Tesla's Cybertruck
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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.
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