Tesla cuts prices by up to a fifth in US and Europe as EV price war starts

For example, Teslas are more expensive to maintain than the ICE industry average - $832 versus $650 for other cars. https://jalopnik.com/advisor/tesla-maintenance-cost/#:~:text....

In terms of fuel, well that very much depends on what happens to electricity prices when a lot of people start plugging in their EVs. Again, people assume they will just remain the same in response to an increase in demand, but color me skeptical. The only way electricity prices can avoid rapidly increasing is if it becomes illegal for you to plug in your EV.

You should in general be suspicious of anyone making claims about total cost of ownership calculations, and heavily discount such claims -- whether it is your local IBM/Oracle salesman or your local car salesman. It is usually a mechanism to justify higher up front purchase prices. Next time someone refuses to be price competitive with other options but makes an appeal to TCO, ask them to put that into writing -- that your TCO will be lower otherwise you will get a refund on the purchase price. Just watch their mouth drop.

People who talk about TCO for a car are already setting the bar crazy high to justify buying an expensive car that they don't really need.

I don't know the numbers for Europe/UK, but anecdotally, that sort of price doesn't seem at all common to me, whereas I do know people who would only ever consider buying second hand cars. Plus the fact that trucks aren't a thing here probably brings down our prices significantly.

A quick look at the Office of National Statistics suggests that the average UK price is £36500 for electric/hybrid, or £29000 for petrol/diesel (still the majority of the market here). That seems quite a bit lower than the US, and is still only the new car market.

And finally, I imagine most Brits can't actually afford a £42k vehicle - even on decent finance that's £500-600 a month - that's how much I pay in mortgage for my house.

People who normally drove "boring" cars like Civics and Camrys because they saw cars as a utilitarian purchase swung for a Tesla because it was more of a tech purchase than a car purchase.

So a lot of people insist it's the best car they've ever driven, and they're not lying... they just haven't driven many non-utilitarian cars.

I was stressed at having a 36 month loan as a public school teacher (I did not, of course, spring for the BMW).

Sure, but cutting prices 20% on new ones means your asset you bought last week just depreciated substantially faster than planned.

This happens in concert tickets, airlines, even appliances all the time. Heck even housing - asking a new family to our neighborhood then telling them what you got your (very similar) house for 3 years (or sometimes even 3 months) ago...

It's probably a bit less than $5k, but still a good first-order engineering approximation.

That said, EVs are very much compressing what "top level" even means because even cheaper EVs perform better than more expensive ICE cars.

Possibly with their manufacturing decisions (a couple of really big plants making only a couple of varieties of models, with the models not changing much from year to year) they'll be driving unit costs way down such that they can reduce their sales price and keep their margins.

If it's a bad bet they're sitting on a lot of stranded manufacturing assets. If it's a good bet they'll look pretty smart.

Their unit prices have historically had pretty dynamic pricing both up and down, though in the past 18-24 months it's mostly been up.

As far as inflation goes, Dec 2019 to Dec 2022 is about a 15% increase, which would bring the equivalent of that $35000 car up to $40500. This $3k price drop still leaves a more than $3k gap in inflation-adjusted price.