Tesla EVs are the cheapest they have ever been relative to the overall US auto market
David Zalubowski/AP
- Some Tesla models are now selling for less than the average new car in the US.
- Both the Tesla Model 3 and Model Y have been extensively marked down recently.
- Automakers like Ford and Rivian followed Tesla's lead in January in slashing prices.
Some of the most popular Tesla models are now being sold for less than the average cost of a new car in the US, according to a report from Bloomberg.
The Tesla Model 3 is now selling at nearly a $5,000 discount, the report said, calling it the cheapest price ever seen compared to the average US car.
Meanwhile the Tesla Model Y is also selling as a discount after its price was cut by $13,000 at the beginning of the year.
Today, the lower-end Tesla Model 3 now starts at $42,990, which doesn't account for an additional $7,500 US tax credit from January which drags the price down further to $35,500.
Meanwhile, traditional gasoline-powered vehicles have sharply increased in price, amid a shortage of computer chips, raw material inflation, and a calculated move on the part of automakers to keep inventories. In January, the average cost of a new vehicle hit nearly $48,000, up $10,000 since the start of the pandemic, Bloomberg said.
Tesla first announced price cuts on January 12, and set a trend among electric vehicle makers including Ford and Rivian which quickly followed suit in doing the same.
Tesla's price cuts drew a surge in more buyer interest, according to data collected by car-shopping website Edmunds.
That helped spark a massive turnaround for Tesla stock, which tumbled by 65% last year. Just seven weeks into 2023, it has already surged 64% and several analysts are predicting a further rally in the EV maker's shares.