Tesla Model 3 now cheaper than average new car price in the US by $5,000

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Credit: @Arsalan754 | Twitter

If you have been considering buying a Tesla Model 3, now is the best time ever to take the plunge. The electric sedan is now $4,930 less than the average car in the US after the EV company implemented significant price cuts last month.

According to an analysis by Bloomberg, this price is the cheapest for Tesla compared to other US cars. The Model 3 now starts at $42,990, compared to the average new car price in January of $49,388. Add in the federal tax credit of $7,500 and additional state level incentives where available, and the deal becomes even better.

The Model Y saw even deeper price cuts, with up to $13,000 slashed on the battery-powered SUV. The car was already popular even before the price drop, coming in as the third best-selling SUV in the US in 2022 behind veterans Toyota RAV4 and the Honda CR-V. The Model Y, the bestselling EV in the US in 2022, now starts at $65,990.

Tesla’s New Year price slash triggered responses from other EV makers, including Ford, which adjusted the prices of its Mustang Mach-E and Lucid Motors, offering $7,500 in discounts.

US buyers can save further by taking advantage of new federal EV tax breaks of up to $7,500. However, they will get even more reasons to switch from ICE as the price of new, gas-powered vehicles has jumped about $10,000 since the pandemic, plus not to mention the soaring price of gasoline over that time period.