Is the Cost Worth it to a Consumer?

Toyota Motor Company reopened the electric car market in 1997 releasing the first compact, electric hybrid car in modern technology. As time went on, popularity grew and other companies started producing their own versions of the electric car.

The Prius came to the United States in 2000, with an MSRP of just under $20,000, $5,000 cheaper than the average sedan at the time. Toyota sold about 120,000 first generation priuses from 2000 to 2003 moving up to 249,000 sold in 2016 at an MSRP of $24,200, still $4,000 to $5,000 the average sedan.

While the popularity is growing and chargers being more readily available the idea and catering of electric cars, there was still a lot of distaste caused by a lack of power and battery life.

Tesla has made it their mission to reinvent this modern electric car, solving most of these issues. With all of these improvements, the price was subject to a substantial increase. Starting at just under $70,000, the original Tesla Model S is priced far higher than the market averaged and sold just under 84,000 cars in 2016, not nearly the popularity they were expecting.

While the car was a great idea and they solved all of the problems, the price gave the car a very specific demographic of people who can afford it. To justify paying the price of the new Tesla, consumers need to compare the gas savings with the cost of electricity to recharge to determine the return time on the investment.