[crazy2be]

The average new vehicle purchased in the United States is $33,560[0]. The Tesla Model 3 is $35,000, PLUS $7,500 in government tax credit[1]. This puts the effective cost at $27,500. The Honda Civic, widely considered a cheap car, is $20,415 MSRP[2]. Once you factor in gas and maintenance savings, around $1,200 per year[3], the Tesla is cheaper after just over 6 years. Since most cars are kept for 20 years, that is a good deal.

Given that, I would say that calling it a "cheap" car is pretty accurate for most Americans. Obviously it is not in the range of used cars or the ultracheaps ($10-15K), but it's really amazingly cheap for an electric if they can make it happen.

[1] Note this is likely to be halved or a quartered for new orders as Telsa reaches the 200,000 vehicle mark [2] https://www.truecar.com/prices-new/honda/civic-sedan-pricing... [3] Rough estimate based on $150/mo in gas -> $50/mo in electricity

[jonathansizz]

But over 3/4 of car sales are for used cars, which have an average price 1/3 of the new car average#. The Model 3 might prove to be good value for a new car, but a new one will still be unaffordable for many American drivers.

# https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/pu...

[zackbloom]

You don't think there will be used Model 3s on the market?

[mrtron]

Why would you consider the used car market when talking about new car sales?

[Tepix]

If you plan to keep an electric car for 20 years, I think it's not unreasonable to expect that you'll need to replace the expensive battery during that time period.

[linsomniac]

The current Tesla packs seem to hold up pretty good. Users who are tracking the degradation are thinking a million miles is possible. Tesla has a test pack that has simulated half a million miles with <20% capacity loss. Warranty is 8 years unlimited miles.

If you are driving a half million to million miles in 20 years, an electric will probably really make sense. You MIGHT need to replace the battery. With a ICE car, you will need $5K of oil changes, $3K of timing belts, and around $20K more in gasoline than electricity, probably a new engine and transmission or two... There's probably another $5K worth of service in there (plugs, fuel injectors, transmission, belts).

So with a gas car you KNOW you're going to be in to it for basically as much as the purchase price of a Model 3 just in maintenance (again, if you are talking half a million miles).

https://electrek.co/2016/06/06/tesla-model-s-battery-pack-da...

[taneq]

I thought everyone (well, most people) in the U.S. upgraded their car every 5-10 years?

[Reason077]

I agree. But how much cheaper will a replacement battery (or repack) be after 10-15 years?

Will a 3rd-party battery replacement industry evolve, or will we always be stuck buying from the manufacturer?

[Shivetya]

I will be very curious how many of those III will be the default base model. We have not seen the feature set at that price so I expect most people to be surprised as how spartan it is.

While they will avoid much of the touch/feel issues with regards to buttons the real test is where the good plastics start and end.

With regards to production targets, not only do they have to get their plant to that level their suppliers have to be able to hit those numbers as well.

I might just put my next car purchase off now. I would like to see how Tesla is doing with this car on September 20th

[ganley]

I thought I remembered reading that the average price of the preorders was in the $40K's, in which case that $35k price isn't very realistic.

[benjaminjackman]

> Since most cars are kept for 20 years, that is a good deal.

One thing to factor in though is the rate of deterioration of the battery pack over a 20 year period and other issues unique to electrics vs the maintenance requirements unique to an ICE vehicle.

It would be really interesting to see the breakdowns on those numbers.

[throwaway91111]

That's a little over half the median household income. Average? Tell me median.

[dabeeeenster]

Is the 35k before the 7.5k discount in the US? All Tesla prices in the UK are quoted with the UK govt discount applied...

[_ph_]

Yes, Tesla stated that the 35k is before the discount. So effectively it is 27.5k after the discounts, and they might offer further rebates for Tesla employees.

[greedo]

What's the median? And even with that being the average "new vehicle" price, that doesn't mean the average American buys a new car. Lots of people can only afford used cars, and for many, $33K is their entire annual salary.

[justin66]

> most cars are kept for 20 years

Are you saying they're kept that long by the original owner? Do you have a source for that figure?

[blueline]

cheaper after 6 years, except you're not factoring in that honda's hold value very well and we have no idea how badly an 'early adopter' electric car is going to fare in the used market. Something tells me that the used market for a tesla isn't going to be as strong as for a honda civic

[Reason077]

Something tells me that the used market for a tesla isn't going to be as strong as for a honda civic

Not sure why you'd assume that.

Current Tesla models have excellent residual values: 62% at 3 years according to black book, which is excellent for the luxury segment - and even better when you consider that EV values tend to be skewed by tax credits!

The Model 3 will share features like over-the-air updates that should help it retain value well.

https://electrek.co/2016/09/13/tesla-model-s-value-retention...

http://www.teslarati.com/tesla-retains-high-resale-value/

[Turbots]

Please don't use averages... The big expensive cars pull up the average disproportionally.

Please use medians.

[ganley]

It's surprisingly difficult to find the median car price. I just spent 15 minutes googling and could find neither the statistic itself nor a source of the data from which I could compute it.