It is about marketing, but not about advertising (or bragging as you call it). Developing and producing electric cars is a lot more expensive, so whatever price

It is about marketing, but not about advertising (or bragging as you call it). Developing and producing electric cars is a lot more expensive, so whatever price bracket you're in, a Tesla is going to have 10-20k of its price go towards making the car move that the other manufacturers don't spend. That's 10k less spent on every other feature of the car. That's why you drop $80k on a Model S, that has the look and feel of a $60K nice car. That cost is already sunk, Tesla can't recuperate that, and everytime electric cars become a little bit more common, the coolness factor of the electric engine decreases which means the value of that sunk cost goes down. There's two things that save Tesla, the first is plain consumer attitude. Some (many?) consumers will simply not buy an ICE car anymore if they can afford not to, which means the other manufacturers have to compete on Tesla's playing field. The second is cheap innovations. Tesla can spend a couple tens of millions, and maybe $1000 in hardware, and get something that looks like an AI into their cars that adds maybe $10k of coolness value. Add fancy doors, a big LCD screen, flush doorhandles, and whatever other little thing you have to spend R&D on anyway because you're a new car manufacturer so everything costs more R&D for you than the establishment, and you close the gap. It's about putting a $80K Tesla next to a $80K Jaguar or whatever, and being able to justify why they cost the same amount of money when the Jaguar is better made. edit: Note this whole story is about the Model S, which was Tesla's bootstrap model. The goal of Tesla is to produce a car that doesn't compete with Jaguar, but with Volkswagen (or Ford).