How the Tesla Model 3 and Chevy Bolt EV Are Defining New Pricing Tiers for EVs
New pricing tiers are opening up in the developing market for all-electric vehicles.
Just six months ago, it was considered perfectly reasonable to compare the Chevy Bolt EV to the Tesla Model 3 in terms of cost. Now, it seems like the two are competing in different segments.
With increased competition from other manufacturers and prices constantly shifting for both vehicles, how should new buyers view the Tesla Model 3 and Chevy Bolt EV in the current market?
Chevy Bolt and Tesla Model 3: Similar Range, Entirely Different Purchase Experience
The first thing to highlight is just how different it is to buy a Tesla compared to any other vehicle, the Chevy Bolt EV included. This influences both the price and the purchase experience.
Tesla sells primarily online and starts from a fixed base price. The least expensive Tesla Model 3 you can buy, at least at the time of writing, is $35,400. That price itself brings up all kinds of controversy, as it only buys you the Standard Range model that must be ordered at Tesla showrooms.
The "affordable $35,000 EV" for everyone has been much tougher to obtain than most of us expected, comes it at a lower range than the Chevy Bolt EV, and can't be found on the Tesla website's vehicle designer, so I'm going to discount it for the purposes of this article.
For the sake of a fair comparison, let's take the Tesla Model 3 Standard Range Plus, which has a range of 240 miles (EPA) and starts at $38,990 on Tesla's website, and set it against the 2019 Chevy Bolt EV LT, with a range of 238 miles (EPA) and MSRP of $36,620.
To be clear, this isn't intended as a comprehensive review of either car. Rather, we'll look at the direction that the price point of both vehicles takes as you head down the path to purchase.
Tesla Model 3 and Chevy Bolt EV: Pricing, Options, and Incentives
When you buy a Tesla, in most cases the price can only stay the same or go up. The base price for new vehicles is intended as a fixed lowest point and features that are considered essential by Tesla owners, such as Full Self-Driving (FSD), bump up the price considerably.
Nonetheless, it's fair to say that for a Tesla Model 3 SR+ without FSD and with only one deviation from the basic package, the buyer is looking at a $40,000 car before incentives.
Now let's turn to the Chevy Bolt EV LT, which starts at $36,620 but, as we all know by now, you're not supposed to leave the dealership paying the sticker price. Regardless of what's on the website or the info sticker, the price you pay for a Bolt EV should only be heading down.
At the time of writing, GM's manufacturer level incentive for the 2019 Chevy Bolt EV is $5,500 Total Cash Allowance off MSRP, which puts the starting price before options and destination charges at $31,120. There are then lots of little charges and potential additional costs, which is why some buyers love Tesla's model of bypassing dealerships entirely, so let's say the basic package for a Chevy Bolt EV LT settles around $33,000 before incentives.
Already, we've opened up a $7,000 gap between two cars that were once directly comparable. With federal tax credit incentives now down to the $1,875 level for Tesla but still at the $3,750 level until September 30th, 2019 for General Motors, that opens the gap up to almost $9,000.
We'll discount state incentives here as they tend to apply to both vehicles, but there are still more dealer discounts that could be applied to the Chevy Bolt EV, such as those in place for students and veterans, as well as employee pricing and Costco member pricing that is sometimes extended to qualified customers.
As you can see, it's hard to pin down dealership pricing as specific offers can vary greatly by location, inventory, and even time of the month (buy right at the end to get better deals, or so the experts advise). For a recent analysis of just how low prices of new non-Tesla electric vehicles can go, take a look at John Goreham's article on where to get a Nissan Leaf or Chevy Bolt EV for around $20,000.
The common theme here is that with non-Tesla EVs, we're typically slashing away at that starting MSRP. With a Tesla, we're invariably adding to the base price, albeit with premium options and superior technology that the Chevy Bolt EV can't really offer, even if you bump it up to the higher-level Premier trim.
In summary, once you go through the process of designing your car and filter the starting price through two very different models of selling, the Tesla Model 3 is at least a $40,000 car, while the Chevy Bolt EV is much closer to $30,000 or below.
New EV Price Points: Under $30k and Over $40k
It's important to note that this analysis isn't intended to knock either of these electric vehicles. Quite the opposite, in fact, as I'd suggest it shows two distinct price ranges emerging that better represent the value of these two EVs for early adopters.
The 2019 Chevy Bolt EV, along with the 2019 Nissan Leaf, is an entry-level electric vehicle. Remove the electric drivetrain and cars in this category retail much closer to the $20,000 mark. The battery is worth a great deal and total cost of ownership is lower for electric vehicles, so a price point between $25-30,000 starts to feel quite reasonable for a basic yet highly capable all-electric car like the Chevy Bolt EV.
On the subject of the car's capabilities, take a look at where the Chevy Bolt EV still stands out from the crowd.
By contrast, a Tesla Model 3 is more directly comparable to a mid-range luxury sedan, for which prices start much closer to $40,000 and can go much higher. The latter is also true of the Model 3, as moving up to the long-range model, premium interior, and adding FSD quickly bump it up to a $55,000 car.
There are many reasons for this divergence, not least of which is the paucity of EV options for buyers in the current market.
As we examined earlier this week, it's not even possible yet to create a top 10 best selling EVs of 2019 list without including the smart fortwo, which sold less than 500 units from January to June this year. That should change as inventories of the Kia Niro EV and Hyundai Kona Electric start to swell, but it still leaves buyers with a limited field of electric vehicles to cross-shop.
Discover the best-selling electric cars of 2019 so far in this video. (Please subscribe to Torque News YouTube Channel for daily automotive news and analysis).
The Kia and Hyundai options also raise another pricing oddity, as both manufacturers still have the full $7,500 federal tax credit to apply to their pricing. Both models are objectively superior to the likes of the Chevy Bolt EV and Nissan Leaf in terms of range and charge speed, yet they will compete at the same $30,000 price point for any customers who can take advantage of the full tax credit.
The primary takeaway here is that we are starting to see the first signs of distinct pricing tiers for electric vehicles at the lower end of the market.
As other legacy automakers accelerate their plans for electrification and more models are launched, the tendency to compare an EV on range alone should start to slip away. Instead, we can expect more traditional comparisons based on vehicle category, quality, and a wide range of emerging features, from autonomous vehicle technology to software updates that improve the car over time.
What do you think about EV pricing as we head into the next phase of electric vehicles?
Do these cars deserve an "EV premium" for their new technology, or should automakers be doing everything they can to cut prices down to their ICE equivalents?
Whatever your opinion, we encourage you to share it in the comments!