Tesla Prices Drop, Making EVs More Affordable Than Ever

In early 2023, a New York Times article projected that electric vehicles would reach price parity with gasoline cars by the same year. This prediction came soon after Tesla significantly reduced the prices of its two most popular models, the Model 3 and Model Y, by thousands of dollars.

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In October 2023, this prediction became a reality.

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Experts attribute the increased affordability of battery-powered cars in the recent past to competition, government incentives, and falling raw material prices.

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Teslas are cheaper than average gas-powered vehicles

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In October 2023, Tesla further reduced the prices of its popular models, with the Model Y priced at $43,990 before federal and state rebates, taxes, and fees and the Model 3 priced at $38,990 before EV rebates and charges.

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Applying the $7500 federal EV rebate, which is part of the Inflation Reduction Act, would bring the prices down to around $36,490 for the Tesla Model Y and $31,490 for the Tesla Model 3.

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The Tesla models are priced between the average cost of a new gas car in the U.S., which is about $45,000, and a used car, which averages around $30,000. This makes them more affordable for car buyers with low to moderate incomes.

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In the first half of 2023, electric vehicles represented 7% of new cars sold in the U.S. The price reduction of Teslas, along with the IRA rebate, could get the U.S. closer to the Biden administration's goal of EVs accounting for half of new car sales by 2030.

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Is it also cheaper to run EVs?

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Considering the increasing electricity bills, the question arises: is it still more cost-effective to charge and run EVs? According to Consumer Reports, it is indeed cheaper to operate an EV compared to conventional vehicles.

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Instead of miles per gallon (MPG), an electric vehicle's efficiency is measured in kilowatt-hours per 100 miles.

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The national average cost of electricity is 23 cents per kWh. It varies from 10.35 ¢ / kWh in Idaho to a high of 28.38 ¢ / kWh in California. The Tesla Model 3 has a 57.5 kWh usable battery capacity and has a range of 272 miles. Charging it completely would cost $16. This comes out to be 5.8 cents a mile.

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A gas-powered vehicle that gets 22 miles per gallon at a fuel cost of $3.70 per gallon would have an energy cost of 16.8 cents per mile.

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So you can start saving money the moment you hit the gas (sorry, electricity) pedal while being sustainable.