Tesla's $100K Cybertruck And Price Adjustments Drive Average Transaction Price Growth Of EV Giant Over Other EVs, ICE Vehicles

The average transaction price (ATP) of a Tesla Inc TSLA vehicle is continuing to rise after dropping to its lowest in December 2023, according to Kelley Blue Book.

What Happened: The automotive research company said on Tuesday that the average transaction price of an EV in July was $56,520. As for the EV giant Tesla, its ATP was $59,593, at its highest point since February 2023.

The reasons for the rise in ATP might be the success of the company’s higher-end Cybertruck vehicle in addition to increases in the price of the company’s more mass-market offerings- Model Y and Model 3.

In July, the average selling price for the Model Y was $52,055 and the Model 3 was $53,878, marking an increase of 5% and 30% respectively from January, the company noted.

Cybertruck Success: The Cybertruck was the best-selling vehicle in the U.S. last month priced over $100,000, Kelley Blue Book said.

While Tesla has previously said that it will launch more affordable variants of the Cybertruck in the future, it currently sells only the pricier and limited-production foundation series edition of the vehicle.

The Foundation series Cybertruck pricing starts at $99,990.

Price Adjustments: Tesla cut prices on its vehicles rapidly last year in an attempt to increase deliveries. However, the price cuts weighed heavily on the company’s profit margins.

While Tesla continues to alter vehicle pricing in 2024, the frequency of price cuts has reduced and the company has also intermittently hiked prices.

As of the time of writing this report, Tesla’s best-selling Model Y SUV starts at $44,990 while its mass-market Model 3 sedan starts at $38,990.

The Model 3 and Model Y account for a whopping majority of Tesla’s overall deliveries. In the second quarter, Tesla delivered 422,405 Model 3 and Model Y, accounting for a whopping 95% of the company’s overall global deliveries.

EVs Continue To Be The Pricier Alternative: According to Kelley Blue Book data, the ATP for a new vehicle in the U.S. last month was only $48,401, significantly lower than the ATP of an EV or Tesla.

This implies that EVs are yet to achieve a price parity with combustion engine vehicles and the transition to EVs continues to be expensive for the consumer.

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Photo courtesy: Tesla