Accounting For Inflation, The Tesla Model 3 Is Now The Cheapest It Has Ever Been

The Tesla Model 3 has never been more affordable when you factor in the massive levels of inflation seen since 2020. Following a recent price drop, the electric sedan now starts at $43,990 (or $45,630 after delivery).

When you include the $7,500 tax credit, the Model 3 has an effective price of $36,490 ($38,130 after delivery). Although a $35,000 Model 3 was offered for a brief period between 2019 and 2020, current prices are “cheaper” when you account for inflation. The $35,000 Model 3 did not get any tax credit: back then, manufacturers had to have made less than 200,000 EVs to qualify for it. The production limit has since been scrapped, with new rules being introduced for 2023. 

The Model 3 is now considerably more affordable than its rivals. For example, the BMW i4 starts at $51,400 meanwhile the Polestar 2 comes in at $48,400. The same applies to the Model 3’s crossover twin, the Model Y. Prices were cut by up to $13,000 with the Long Range Y now having a base point of $52,990 ($45,490 after the FTC). That makes it by far the cheapest AWD crossover with 300+ miles of range on sale in the US.

It will be interesting to see what impact the price reductions will have on sales. The Model 3 and Y are already the world’s best-selling EVs – however can they become the world’s top-selling cars, period? For reference, the Toyota Corolla was the world’s best seller last year, with around 840,000 units sold. However, the Model Y wasn’t too far off with 513,000 global sales meanwhile 492,000 Model 3s were delivered as well. 

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