EV grant makes the new ‘budget’ Tesla Model Y Standard look expensive

For all its foibles, the Government’s Electric Car Grant (ECG) has worked wonders in boosting the affordability of many mainstream EV models, either through hefty near-£4,000 price cuts, or by manufacturers lowering the entry point in order to get under the crucial £37,000 threshold.

At the same time, the Tesla Model Y has remained the best-selling EV in the UK, offering strong range and competitive pricing – especially in base Rear-Wheel Drive form. Yet, while £45,000 for an electric SUV with almost 300 miles of range was a good deal a year or so ago, the market has evolved quickly. With cars such as the Skoda Elroq and Renault Scenic entering the fray, the Tesla no longer looks the absolute bargain it once did.

To rectify this and to boost sales further, Tesla has now introduced an even cheaper ‘Standard’ version which strips out all of the Model Y’s fanciest features – there’s no second-row infotainment or leatherette upholstery to be seen here – and reduces the size of the battery. Now the entry-level Tesla SUV provides 314 miles of range and starts from £42,000, which is £3,000 cheaper than before.

The problem? This is still pretty expensive when you compare the Model Y to many of its rivals, particularly given that some are priced low enough to benefit from the aforementioned EV grant.

The new Citroen e-C5 Aircross, for example, starts from just under £33,000, thanks to getting the £3,750 full grant, and offers a whopping 420-odd miles of range. The Renault Scenic is also priced just under the £37k limit, and boasts Google tech to rival the Starship Enterprise-esque screens of the Model Y.

Of course, you might argue that Tesla is a semi-premium brand, and thus demands a higher price tag than more mainstream offerings. However, the MINI Countryman, which certainly occupies the same ‘posh-but-not-that-posh’ space as the Tesla, starts from under £30,000, and even in top-spec SE ALL4 guise will only break £35,000 when specified in ‘Exclusive’ or ‘Sport’ trims. 

Besides, I think even the most hardcore of Tesla fanboys would struggle to call the Model Y Standard’s cloth upholstery, manual seats and passive dampers anything close to ‘premium’.

With all this in mind, it’s fair to say Tesla might have dropped the ball with its attempt to make the Model Y more accessible. Squeezing the family SUV under the necessary threshold for the grant wouldn’t have been an easy task, but the far narrower profit margin would likely have been outweighed by even greater sales than before.

Of course, both the Model Y and the smaller Model 3 continue to sell in significant numbers. However, it’s not implausible that in time car buyers will begin to notice the Model Y’s relative priciness and instead turn to rival brands in order to take advantage of the financial benefits of the ECG. 

A scenario such as this could see sales begin to slow, meaning Tesla will be forced to come up with something radical if it wishes to continue dominating the market. And with Elon Musk undecided on whether or not he intends to build a true ‘budget’ car in the shape of the so-called ‘Model 2’, maintaining consumers’ interest without the help of Government cash might well make the billionaire’s other dream of colonizing Mars look easy in comparison.

Did you know you can sell your car with Auto Express? Get the highest bid from our network of over 5,500 dealers and we'll do the rest. Click here to try Auto Express Sell My Car now...