Based on EVAdoption estimates, the Tesla Model Y should finish 2023 as the 4th highest-selling vehicle in the US — beating the recent perennial #4, the Toyota RAV4.
A Tesla stumble and RAV4 comeback, however, could alter that with the RAV4 edging out the Model Y. Or a stumble and continued decline in sales of the Ram pickup and a stellar Q2-Q4 for Tesla, and the Model Y could inch out Ram and take the #3 slot.
Regardless of what any of us think of Elon Musk or even the company Tesla, the company is crushing it and has officially gone mainstream. When the Model Y and Model 3 are the number 1 and 2-selling vehicles in California (in 2022 and most certainly again in 2023) and the Model Y will be top 5 in 2023 in the US and Model 3 probably reaching at least the #15 slot — Tesla can no longer be considered an upstart (it is 14 years old after all).
As Musk and the other executives said on the company’s Q1 2023 earnings call, they don’t look at other EVs as the competition, but rather ICE vehicles.
Tesla lowered the price of the Model Y $16,000 in the last few months and the Model Y also qualifies for the $7,500 Clean Vehicle Credit (CVC) tax credit and many other state and utility incentives. This effectively may put the Model Y Performance ($49,990) in the low $40s for some buyers.
At the same time, Tesla introduced an even lower-priced base Model Y, simply called the “Model Y,” starting at $46,990. With the CVC tax credit and potentially other local incentives for some buyers, this puts the base MY at an effective cost of less than $40,000. We leased a Model Y at a cost of $65,000 in December — not because I wanted another Tesla (our third), but because Tesla’s lease payment was $400 and $700 respectively less per month than comparable models from Audi and Mercedes-Benz that we considered. All three models were priced at +/- $65,000. Besides a strong brand, the best charging infrastructure, Tesla also offers the best financing (at least when it comes to leasing.)
Tesla is going for volume right now, and intends to recapture their strong margins back in the next year or two. In the meantime, while many consumers may not want to give money to Elon Musk, monthly payments matter — and when it comes to a BEV, no one can really touch Tesla right now.
It is going to be interesting to see if the legacy automakers join in the pricing wars to attempt to compete with Tesla. But in the meantime, don’t be shocked if sometime in 2023 you see a new Model Y show up in your neighbor’s driveway.