Tesla Abandons 'High-Price Strategy,' Now Cheaper Than Average US New Car Price

Significant Price Cuts This Year
"Battery Car Price War Begins"

American electric vehicle company Tesla has significantly lowered vehicle prices this year, increasing its price competitiveness in the U.S. market.

Bloomberg reported on the 14th (local time), citing car price comparison site Edmunds, that the Tesla Model Y, starting at $49,990 (approximately 65.24 million KRW), after applying a $7,500 (approximately 9.79 million KRW) tax credit benefit, costs $42,490 (approximately 55.45 million KRW), which is $5,300 (approximately 6.92 million KRW) lower than the average new car purchase price in the U.S. last month.

[Image source=Yonhap News]

Tesla vehicles have long been perceived as expensive. However, since January, the Model Y’s starting price has been reduced by a total of 24%, and this model has become eligible for the U.S. federal government’s tax credit for the first time, making it relatively affordable.

The Model 3, starting at $41,990 (approximately 54.8 million KRW), will cost $38,240 (approximately 49.9 million KRW) after applying the $3,750 (approximately 4.89 million KRW) tax credit effective from the 18th. Compared to the frequently compared BMW 3 Series, which starts at $44,000 (approximately 57.42 million KRW) in the U.S., the Model 3 is much more affordable.

This year’s drastic price cuts by Tesla are considered unprecedented in the history of the U.S. automobile market.

Among experts, opinions are divided on whether Tesla’s price cuts are a strategy to respond to declining market demand or a market expansion strategy made possible by cost reductions. However, there is consensus that Tesla’s moves are putting significant pressure on other automakers. Bloomberg stated, "Tesla has ignited a price war between battery electric vehicles and internal combustion engine cars," adding, "That battle has only just begun."

Meanwhile, another major foreign media outlet reported that Tesla recently cut vehicle prices by 4 to 10% in Europe and Singapore, and as Tesla’s price credibility is being undermined, the premium value of Tesla vehicles in the used car market is rapidly declining.

This content was produced with the assistance of AI translation services.