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. 

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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.