Why Are Teslas so Expensive?

If you are shopping for an electric vehicle, you might have noticed that Tesla cars are one of the most expensive electric cars on the market.

At first glance, this might not seem to make sense. Especially when you realise their goal is to help promote sustainable energy and get the world off fossil fuels.

But a lot of different technology and significant effort has gone into developing Tesla cars. Far more than you might think!

Supply and Demand

As I am writing this, in mid-2022, demand for Tesla cars far outstrips supply. And given the boom in the electric vehicle industry, this won’t change for quite some time.

One of the downsides of more demand than supply is that the base price for Tesla cars can rise, but so too can the second-hand car market prices. Sometimes, buying a second-hand Tesla can be even more expensive than a new one – because you can get it right now!

Inflation

Inflation is also playing a role in the current high cost for a Tesla, with commodities on the rise like ALuminum and battery costs also. There is little tailwind in the current climate to lower these prices, but come 2023 things should definitely be a lot better. I hope!

Battery Technology Is Expensive

Tesla’s New Battery Pack

As I mentioned above, the price for raw materials in batteries is on the rise – things such as cobalt, lithium, manganese, and so on were never cheap in the first place.

However, Tesla is also in the process of developing and ramping up production of their latest battery technology – the so-called 4680 cells. Tesla is always busy cutting costs. And, they will be cheaper, more efficient, and provide lighter, longer-range vehicles in the long run. But new battery technology takes time.

The first of the 4680 Tesla Model Ys have already been delivered in Texas, but this is just the beginning of the life of electric vehicles.

Full Self Driving Technology

Tesla FSD
Tesla FSD

If you buy a new Tesla vehicle with the Full Self Driving option, then you are up for over $10k more on a new Tesla. The development of FSD is very expensive, with a team of over 300 developers, a new Dojo supercomputer (developed in-house) as well as Tesla’s own FSD hardware in every vehicle.

The development of Artificial Intelligence is not cheap by any means, and once FSD comes to life and your electric vehicle can drive you from A to B with absolutely no intervention on your part – the price will be worth it, trust me!

Tesla Superchargers

tesla supercharger port macquarie australia
Tesla Superchargers

Tesla has been creating their own electric car charging network since the very beginning. After all, when Tesla cars first came out – there was no charging anywhere.

Not only has Tesla created its own network, but they have also developed the technology for Tesla superchargers. Their 250kW chargers are some of the fastest in the world and you can find them almost everywhere you need them, especially in the USA and Europe.

The World’s Safest Cars

Tesla prides itself in producing three of the safest vehicles in the auto industry. They focus on going above and beyond what the ratings require and adding extra features that make Tesla vehicles even safer. Even if that means not building a cheaper car!

For example, they adapt the airbags and seat belts to the weight and position of the person in the seat. And they also review all the data they get from Tesla vehicles to make things even safety in the future.

Their cars are also inherently safe because of the heavy battery in the bottom of the vehicle. They are almost impossible to roll over!

Next-Generation Software

Tesla started out in Silicon Valley so they know their way around software. Traditional car companies are busy trying to catch them right now.

They update their vehicles “over the air” whenever there is a set of new features or even an important safety update that does not require you to come into their service center! Teslas have been likened to an iPhone on wheels. It’s all about the software in electric cars, and Tesla is ahead of the pack.

Import tax

Depending on where you live there can be an import tax on foreign-made vehicles. In fact, Tesla is currently not delivering vehicles to India for this very reason. The import taxes make the cost of the vehicle just too prohibitive.

So, if you live in a country where there are homemade vehicles, then it could be that import taxes are making the cost of a Tesla higher.

However, given that Tesla has recently opened the Berlin factory in Germany, buyers of Tesla vehicles in Europe will no longer have to contend with high delivery costs and long delivery times, and potentially no more import taxes!

Tesla is Growing

Tesla is aiming to bring about the death of the internal combustion engine – all for the sake of our planet. And that means they are growing as fast as they possibly can.

In Fact, right now, they are growing production at over 50% a year if you can believe it. In 2021 it was even more than that.

The cost of doing this is high, and Tesla shoulders these costs in most cases. However, it is something to bear in mind when you are comparing prices and buying a Tesla, it is not all about the money. You are also part of a sustainable future revolution!

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