#Iced out bubble letter chain upgrade#

That's a model that doesn't even have heated cloth seats leather would cost an additional $1500 and at that point a Model 3 would be just 25% more for a huge upgrade in terms of brand and features. So how does the price of a Model 3 today compare with an Accord versus Honda's intention, and versus prices from a few years ago? It's hardly a splurge in today's market.Ī Model 3 costs 'just' 30% more than the cheapest Honda Accord I can find, a Sport trim priced at $35,975 including markups, and the salesman assured me that they sell every one they get without discount. This will give shoppers the much-needed choice they need.

While we may never see inventory levels like we did prior to the pandemic that allowed incentives and dealer discounts to bring prices well below MSRP, I believe buying a car at MSRP will eventually happen. With mainstream vehicles having luxury prices, it's no wonder Tesla is taking sales from the mainstream segment. My local dealership here in Southern California sells a top-of-the-line Honda Accord Touring for nearly the same price as a Standard Range Model 3 and according to the salesman, they've been selling every one that they get. In today's market, an entry-level Tesla is no longer a luxury vehicle. In fact, the average retail price is now higher than the starting price of a Model 3, even after a $10,000 price increase over the last year. With manufacturers prioritizing higher-priced variants and dealerships applying extreme markups to those units, in July the average retail price for a new car rose to an all-time high of $48,142 and the average monthly payment is now $733. To counter this (and to get a bigger piece of the pie themselves), manufacturers have focused on building higher priced configurations of their vehicles, but that hasn't stopped the strong consumer from driving up prices further.įor the shopper, this is a double whammy. Manufacturers like Ford ( F), which historically have good relations with dealerships, are now starting to show their frustration with dealers.

In addition to supply chain hurdles, traditional automakers have struggled with dealerships driving up prices well above MSRP via price markups and mandatory accessories. Tesla's flawless navigation through the supply chain means not only higher production for Tesla, but higher demand as other automakers struggle with very high starting prices that are mostly out of their control. While Tesla is commonly seen as a luxury vehicle, it is taking sales from not just all the luxury automakers, but all the mainstream categories as well. Other automakers' misfortunes have been Tesla's ( NASDAQ: TSLA) gain.