You might already know that Tesla Inc. (TSLA) vehicle owners can save a substantial amount of money on fuel. You might have even heard about the 澳洲幸运5官方开奖结果体彩网:tax credit for electric vehicles. What might surprise you, however, is 𝓀that the cost to buy certain Teslas—the Model 3 and Model Y—is less than the average pr🤪ice of a new vehicle, period.

A More Affordable Tesla

The earliest Tesla cars rolled out at very high price points, and some of Tesla’s vehicles are still expensive compared to the industry average. As of January 2025, for example, its Model X starts at $65,990 and its Model S starts at $73,490. The cybertru🤪ck is its priciest vehicle: it starts at $79,990.

However, two of its vehicles are in line with the industry average: the Model 3 starts at $42,490 and the Model Y starts at $44,990. The average price of a new car as of December 2024 is $49,740.

Supply and Demand

The electric vehicle (EV) market is changing fast, and Tesla is among those leading the way. 澳洲幸运5官方开奖结果体彩网:Demand for Tesla cars has resulted in a waiting list for back-ordered vehicles as the company regularly sets new sales records.

Traditional car companies, which are 澳洲幸运5官方开奖结果体彩网:Tesla’s main competitors, have been hesitant to undertake electric vehicle (EV) production because of the high production costs. But some of these companies, including Toyota (TM), Ford (F), and General Motors (GM), lau𒁃nched or have plans to launch all-electric cars to compete with Tesla’s modeꦡls.

The high demand for Teslas is fueled in part by the green energy movement. Tesla cars are all-electric, so they do not consume greenhouse gas-emitting gasoline and do not directly create carbon dioxide. (Still, carbon dioxide is a by-product of the electrical generation needed to 澳洲幸运5官方开奖结果体彩网:charge the car’s batteries.)

Demand is also dr🔯iven by consumer preference for Tesla’s sleek🐽, modern design and its high-tech offerings. Many drivers also value the fact that electric cars are virtually silent when they drive.

澳洲幸运5官方开奖结果体彩网:Tesla cars are also high-performance vehicles. The Model S can cruise for nearly 400 miles on a full charge and can accelerate from 0 to 60 miles per hour in less than two seconds. The Tesla Model X is a more family-friendly SUV that can comfortably fit seven passengers. 

Battery Technology

Batteries to store and use💦 electrical power are the most expensive 🦂component of Tesla cars. One of the company’s main goals has been to reduce the battery costs per kilowatt-hour for its cars, and the company has made some significant headway toward that goal.

Significant 澳洲幸运5官方开奖结果体彩网:research and development (R&D) is going into battery technology, and the hope is that in a short timeဣ, the cost of batt🐻ery power storage will be able to compete with the cost of gasoline.

Tax Credit for Teslas

For Tesla cars to qualify for the full $7,500 tax credit under the 澳洲幸运5官方开奖结果体彩网:Inflation Reduction Act of 2022, the company must eventually abide by sourcing requirements for batteꦺries. Minerals and other components used to make EV batteries must primarily come from North America.

The $7,500 tax credit applies to new vehicles. Used vehicles may receive a tax credit of up to $4,000 or 30% of the sales price, whichever is less. More expensive electric vehicles, such 𓆏as the Model X and Mod🍌el S, do not qualify for a tax credit. To qualify, sedans may cost no more than $55,000 and trucks and SUVs may cost no more than $80,000.

Finally, you must meet income requirements to receive the tax credit. You can’t earn a modified adjusted gross income (MAGI) above $150,000 as a single filer, $225,000 if you’re filing as head of household, or $300,000 for those filing jointly.

The Bottom Line

Though some Tesla vehicles are expensive (the Model X, Model S, and the Cybertruck), others are more in line with industry averages. In fact, as of December 2024, the base model prices of the Model Y and Model 3 cost less than the average price of a new car ($49,740). The Model Y starts at $44,990 and the Model 3 starts at $42,490. Tesla has turned away from solely focusing on the luxury market. Now it's making something different: vehicles that are affordable.