Tesla isn’t known for producing affordable cars, but one of their newest vehicles aims to cost less and reach a wider market.
The cheapest Tesla is the Model 3. The Tesla Model 3 retails at $39,990, and it can be optioned up to just shy of $60,000. This is well below the retail price of the popular Model S, which starts just shy of $70,000.
In this article, we’ll go over the pricing, specifications, and features of Tesla’s cheapest Model 3 sedan. Additionally, we’ll go over what sets the Model 3 apart from similarly-priced cars, along with why it’s nearly half the price of Tesla’s next cheapest popular model.
We sourced the technical specifications listed in this article from Tesla and other reputable automotive sources. Additionally, we referenced publicly available automotive pricing and depreciation statistics.
Will Tesla Cars Ever Be Affordable?
Up until recently, all Tesla vehicles were pretty unaffordable to the average American car buyer. Elon Musk and the company recognized this from the beginning and never intended to limit their cars to the premium market.
As a result, the company has worked to design and produce affordable vehicles. That said, it’s important to remember that Tesla is a relatively new company with lots of overhead costs.
That means that it’ll still be some time before new Tesla vehicles match the cost of comparable gasoline-powered cars—but at the current rate of production streamlining and technological progress, it will eventually.
What is the Lowest Cost Tesla Car?
In 2017, Tesla released the long-awaited Model 3. This vehicle was pushed by Elon Musk as the first wide-market Tesla designed to compete with reasonably-priced cars.
The sedan, which comes with a sleek design and Tesla’s latest tech, is the lowest-priced Tesla ever produced. It was designed to be affordable yet retain all of the important features Tesla prides itself on.
Tesla Model 3 Pricing
The Tesla Model 3 starts out at $39,990 for the base model. It features a standard range, dual-motor all-wheel-drive, and the various sensors used for Tesla’s autopilot features.
Compared to other $40,000 cars, the Model 3 actually excels. The range is pretty good, too—the base Tesla Model 3 has 263 miles of driving range on a full charge.
The base Tesla Model 3 has a spectacular audio system that is comparable to premium upgrades on other cars and some of the best crash safety in the industry. And since many of the features on Tesla automobiles are software-based, you can upgrade at any time for a price.
Tesla Model 3 Specs
The base Tesla Model 3 has 263 miles of range, but you can purchase a long-range model which boasts 353 miles of range on a single charge. The Model 3 has a base horsepower rating of 480 (283 from the rear and 197 from the front motor) and 302 lb-ft of torque.
The Tesla Model 3 has a wheelbase of 113.2 inches across all models and a curb weight of between 3,648 and 4,250 pounds, depending on the battery and range you choose.
All of Tesla’s advanced autopilot features are available on the Model 3, but you’ll have to pay extra for full self-driving capabilities.
Why is the Tesla Model 3 Cheaper?
The Tesla Model 3 is not a cheap car—make no mistake about it. It’s a $40,000 sedan that you can option-out well past $50,000. But compared to the Tesla Model S, which starts at just shy of $70,000, it’s much more affordable.
The $40,000 price for the Model 3, considering that you get a top-quality all-wheel-drive electric car that can literally drive itself, is remarkably low—even though it’s not cheap compared to other cars.
What’s even more remarkable is how much much cheaper the Model 3 is compared to the Model S and other Tesla vehicles. So why is the Model 3 about half the price of an optioned-out and similarly-sized Model S?
For one, the Model 3 has fewer parts and features. The Model S is a luxury vehicle with bells and whistles like automatic door handles. Additionally, the Model 3 has less range and fewer costly batteries, and the amount of expensive material needed to produce them is lower.
Additionally, the Tesla Model S has better performance than the Model 3. The base Tesla Model S has between 670 horsepower and a jaw-dropping 1,020 horsepower, whereas the Model 3 has a measly (but impressive) 480 horsepower.
Are Used Teslas Any Good?
If you’re looking for a more affordable Tesla, then a used Model S or Model 3 is an excellent option. Unlike gas-powered cars, which reach the end of their useful lives around 100,000 to 300,000 miles, Tesla vehicles aren’t bound by the wear of piston rings on cylinder walls and drivetrain gears.
Tesla vehicles have a propertied lifespan of around 500,000 miles, at which point an extensive battery replacement will likely have to take place. This is twice the average life of a used car of any other variety, and it's an excellent reason to consider purchasing a used Tesla.
The newer the car, the more advanced and powerful it will be—and the more life the batteries will have left in them. As Tesla batteries charge and discharge, they gradually lose their ability to store power. This effect goes unnoticed for much of the vehicle’s lifetime but can become problematic down the road.
But if you find a used Tesla with 100,000 to 250,000 miles on it, there’s a good chance it’ll be in great shape and not difficult to restore to like-new condition. Additionally, there’s still plenty of life left in the battery packs at this point, so you can count on years (and possibly decades) of trouble-free use.
Why are Tesla Cars Expensive?
You’ve probably wondered why Tesla vehicles are so expensive. Why pay $80,000 for a Model S when you can get a BMW or a Mercedes for the same price? There are a few reasons why Tesla cars cost so much—and why you should consider them a viable alternative to conventionally-powered luxury cars.
For one, the quality of materials used in Tesla vehicles rivals that of other luxury automakers. Specifically, you can make a fair comparison of Tesla quality to German automakers such as Mercedes, Audi, and BMW.
Tesla interiors have the same high level of fit-and-finish, and parts such as brake calipers are sourced from the best manufacturers.
Additionally, the high number of aluminum parts on Tesla cars and the steel-aluminum blended chassis are higher quality, more corrosion-resistant, and lighter than domestic autos.
Tesla vehicles include much more technology and advanced systems than other autos, even vehicles that are more than twice the price. These systems include the complex self-driving features that are optional on all models and the rapid-charging capabilities of Tesla vehicles.
Will Tesla Vehicles Get Cheaper?
Yes, Tesla vehicles are likely to get less expensive as time goes on. This is the result of a growing used market, competition from other automakers, and advancing technology.
Tesla has constantly aimed to reduce the price of its affordable Model 3. As the company shores up manufacturing of high-value parts such as batteries, it will be able to reduce the cost of the car overall.
Also, increased manufacturing capacity will match demand and make it possible to sell new and used Teslas for more money. Technology plays a part, and advanced production facilities reduce labor costs and speed up production.
As technology advances further, it will become more economical to produce the parts used in Teslas. Additionally, a growing battery recycling market can lower the cost of battery components—which are a major contributor to the price of Tesla vehicles.
Does the Government Subsidize Tesla Cars?
Tesla cars are all-electric, and the company has never produced (and probably never will produce) gasoline or diesel-powered cars. Over the last decade or two, the Federal Government has offered numerous taxpayer-funded incentives to automakers who produce clean cars.
Over the years, Elon Musk and his companies have received an astounding five billion dollars from the Federal Government. That’s in addition to the incentives offered to consumers to purchase electric cars.
If you buy an electric car in the United States, specifically a Tesla, you can ask the Federal Government for a generous $7,500 tax credit towards your income taxes that year. Additionally, if you live in California, you can receive up to $5,000 more in state tax credits to purchase an electric car.
Do Tesla Cars Hold Their Value?
Yes, Tesla vehicles hold their value remarkably well. One obvious reason for the reduced depreciation is the quality and longevity of Tesla vehicles, which can last more than twice as long as competing automobiles.
Additionally, the public’s unquenchable demand for Tesla vehicles extends to the used market as well. People just can’t get enough—and there aren’t enough cars to go around.
Despite how many factories Tesla has been constructing, demand keeps increasing, and charging stations are more accessible than ever.
How Much Does the Tesla Model 3 Depreciate?
Before we cover how much the Tesla Model 3 depreciates, let’s take a look at the automotive market as a whole. With the exception of pickup trucks, the vast majority of cars depreciate like hot lumps of molten lead.
Conventional gasoline-powered cars lose between 40% to 60% of their value over a 3-year period—and luxury cars are some of the worst offenders in this category.
Electric cars, on average, lose 50% of their value over a 3-year period, which is slightly less than conventional vehicles but still pretty bad.
The Tesla Model 3 is a different story, even for electric cars. The Tesla Model 3 only depreciates an average of 10.2% over three years—which is roughly 4/5 less than competing electric cars. This is due to Tesla’s high desirability, advanced features, and superior service life.
About THE AUTHOR
I've spent many years selling cars, working with auto detailers, mechanics, dealership service teams, quoting and researching car insurance, modding my own cars, and much more.Read More About Charles Redding