Gary Zhou 
Tesla’s electric vehicles are premium-priced, but their financing deals make them quite compelling against their rivals in the EV market. In a way, Tesla’s financing deals involve interest rates that could end up undercutting the costs of rival EVs by a notable degree.
A look at Tesla’s online payment calculator would show that the Texas-based electric vehicle maker lists a 72-month rate of 2.99% APR. With a $48,490 car like the Model 3 RWD, this would translate to an estimated monthly payment of about $687 after a $4,500 downpayment.
In comparison, an electric vehicle from, say, Toyota, with its bZ4X, does not have a dedicated financing deal. This could leave car buyers with a higher rate than Tesla’s premium electric sedan.
Toyota’s online payment calculator for its all-electric bZ4X indicates that the vehicle is listed with an estimated monthly payment of $692. This is quite close to the Model 3’s monthly price, but Cars Direct notes that Toyota’s estimate seemed to be based on the bZ4X’s MSRP of $43,215.
Since Toyota adopts a standard rate of 6.44% APR, the bZ4X could end up being pretty expensive to purchase. Under Tesla’s 2.99% APR, a vehicle in the $50,000 range would have $4,700 in interest before factoring in taxes, fees, and any state plug-in rebates. An equally priced vehicle with a 6.44% APR would see more than double the interest.
It’s not just Toyota either. Tesla’s financing rates also undercut other electric vehicles like the 2022 Hyundai IONIQ 5, which has a 72-month rate of 3.15% APR. The Kia EV lists a financing rate of 4.99%, while Ford’s 72-month interest rates for its highly popular Mustang Mach-E could go as high as 5.9% on the all-electric crossover’s GT trim.
That being said, carmakers like Toyota do have some advantages over Tesla’s premium electric cars. Their vehicles, for one, still qualify for the US’ $7,500 tax credit. However, the adoption of the dealership model by Toyota and other carmakers means that the price of EVs like the bZ4X could see some market adjustments before they can be purchased. This could result in prices getting inflated, and the vehicles being even more expensive to own.
