Tesla Model 3 vs. China, Japan, Europe, and Korea: Who is really the cheapest?

In 2022, when Tesla launched in Israel, the base Model 3 cost NIS 179,000, not much more than a Toyota Corolla Hybrid, causing a stir in the market. Since then, the Model 3 has risen in price rapidly, Israelis have flocked to crossovers, and electric cars have made a mark in the SUV market rather than sedans. The launch of the Model 3 Standard now at NIS 192,000 could cause a new shake-up, with a higher price than family sedans but much lower operating costs, according to a Walla! Cars analysis.

Comparing the Standard version against the Toyota Corolla, Hyundai Elantra, Škoda Octavia, and Chery Arrizo - the only one here with plug-in drive, which has become more common among crossovers - shows that the Model 3 is now NIS 10,000–15,000 more expensive than other family sedans. But anyone able to charge it at home will pay NIS 4,000–5,000 less per year on fuel. Only the Chery Arrizo 8 Plug-in comes close, with fuel costs potentially very similar to Tesla for those who charge at home and use little gasoline for trips beyond the 80 km it can drive on battery alone, or similar to the other competitors for those using it as a regular hybrid without charging.

Tesla has the advantage of its own charging network, the Superchargers, with 24 fast-charging stations from Eilat to Kiryat Shmona, the cheapest on the market - around 50% of DC charging prices at other networks.

According to a check on the Wobi website, Tesla, which consumes less electricity than other EVs, is also significantly cheaper in annual insurance - about NIS 1,000–2,000 per year.

The Model 3 also benefits from the fact that its owners are not obligated to undergo regular maintenance, unlike common practice in the market, while competitors require one every year. Tesla was also the only electric vehicle showing low depreciation, unlike other plug-ins, in a study of annual depreciation for 100 popular models conducted using the Levi Yitzhak pricing guide. Its depreciation was lower even than hybrid family sedans, and certainly lower than gasoline models. Increased sales expected from the cheaper version could greatly expand supply, which usually accelerates depreciation, but could be balanced by legitimizing the model’s purchase in a country where many buyers seek widely seen cars on the road.

Thus, in terms of costs, the Model 3 is cheaper even than the Chinese option, except perhaps for the smaller EVEASY electric sedan, which has not sold in significant numbers for three years. A cheaper Model Y will soon be launched at an estimated price of around NIS 220,000, expected to show similar gaps compared to popular hybrid crossovers.

Is that the whole story? The last time Tesla faced an unexpected sales wave, its service collapsed: Shortages of spare parts in case of accidents or malfunctions and long waits at service centers. Since then, Tesla Israel has expanded its service center network and even opened showrooms that it initially lacked, but customers still occasionally encounter spare part shortages. Against Tesla also stands a shorter warranty, especially compared to Chinese EVs.

Additionally, Tesla has not yet cracked the corporate leasing market, which provides company cars to about a quarter of a million Israelis. The only leasing company to purchase Tesla models so far, Eldan, was burned by Tesla’s price cuts, which greatly affected the cars’ value - a very sensitive issue for leasing companies. Tesla offers private leasing plans itself, but to enter the corporate leasing market it will need to provide its own operational system or partner with a body able to offer the standard service level in the industry.

Either way, alongside new cheap Chinese crossovers, the EV market may see the start of a comeback in the coming months.