(Bloomberg) -- Tesla Inc.’s Model Y has been a smash-hit worldwide -- on track to rank among the top five best-selling models this year and the only electric car to make the cut. More than 500,000 were snapped up in the first nine months, but depending on which country you live in, you may be forking out vastly different sums.
Mainland China is the world’s cheapest place to buy a Model Y. After last month’s price cuts, the Model Y starts at 288,900 yuan ($40,500), slightly over half the US retail price. At the other end of the spectrum, Singapore is the world’s most expensive place to own a Tesla: getting the four-door SUV in the island state will set you back a hefty S$142,471 ($103,800) -- and that’s before excise and registration duties, which can double the overall price tag.
Bloomberg compiled the most and least expensive places to buy a Model Y, based on the starting cash price shown on Tesla’s official website for each country and region. Here’s the leaderboard:
“Automobiles are generally more expensive in places like Singapore and Israel due to higher taxes, duties and registration fees versus China and Europe,” said Seth Goldstein, an equity strategist at Morningstar Research Services and chair of its electric vehicle committee. Supply and demand, as well as the level of competition in the market are also pricing factors.
Indeed, buying a Tesla in Singapore could cost as much as an apartment. Cars in the city-state are so expensive because there are only a limited number of ownership permits (aimed at controlling traffic growth on the small island). Those permits must be bid for at twice-monthly auctions and allow a driver to own a car for 10 years. For a Tesla, permits rose to a record S$116,577 in November -- nearly as much as a Model Y itself.
The steep price tag hasn’t deterred some from making the leap. Finance professional Alexander Ang purchased a Model Y in June and took delivery of the EV in September. It’s his first-ever electric car.
“Sure, it’s definitely expensive but it’s the same for any car in Singapore,” Ang said. “A similar-sized EV from other manufacturers is more expensive than Tesla because of additional dealership charges and they don’t have as much legroom in the rear.”
Ang doesn’t necessarily consider himself a Tesla fan but says the company gave him “the most bang for my buck” in terms of driving experience. Cheaper electric car options are far and few between in Singapore, especially for the size of vehicle he wanted. “The choices were limited,” he said.
An entirely different story is playing out in China -- the world’s largest EV market and a fiercely competitive one. A phalanx of local rivals from legacy automakers like BYD Co. to upstarts like Nio Inc. are rapidly closing in on Tesla with new model launches and sales promotions. Domestic automakers accounted for almost 80% of EV sales in the first seven months of 2022, according to China’s Passenger Car Association.
To compete, Tesla has unleashed a slate of marketing tactics to lure customers after price changes in October, including extending insurance subsidies for new buyers, reinstating a user referral program and even advertising on local TV. That’s as its sales in the country fall from a peak, with wait times shrinking to as little as one week from as long as 22 earlier this year -- a sign of slowing order intake and reflecting the fact Tesla recently upgraded production capacity in Shanghai. Uneven demand in China, from which Tesla derives almost one-quarter of its revenue, may have the potential to derail Chief Executive Officer Elon Musk’s ambitious target of 50% annual global sales growth for years to come.
Additional price cuts could also be in store for Tesla’s other key markets, including the US and Europe, according to Morningstar’s Goldstein. “If we see an economic slowdown in 2023, we could see commodity prices fall, so input costs would go down,” he said. “If this happens, I’d expect Tesla and most other automakers would cut prices again to boost demand.” Musk himself signaled that possibility as well earlier this year.
Regardless, amid news on last quarter’s faltering vehicle deliveries, it’s easy to miss just exactly how well the Model Y is doing. The SUV is broadly on pace to sell 760,000 units in 2022, according to BloombergNEF estimates.
As new factories in Austin, Texas, and near Berlin ramp up into 2023, Tesla may finally be able to lay claim to the best-selling vehicle in the world -- as Musk himself boldly predicted last year.
©2022 Bloomberg L.P.