Tesla continues to cut prices, leading this electric vehicle (EV) brand to undercut the average gas-powered car by nearly $5,000 in the U.S.—bringing Tesla prices to a record low and making it a cheaper EV option.
- Tesla is continuing to cut prices of its EVs, knocking the Model 3 sedan to $4,930 less than the average new vehicle sold in the U.S.
- The price cut marks the lowest price Tesla has ever been compared to the typical gas-powered car.
- While Tesla is dropping its EV prices, gas powered-car prices are rising. The average cost of a new vehicle has increased more than $10,000 since the start of the pandemic, to $47,920 in January, according to data from Bloomberg.
Why it’s news
Analysts have placed bets on whether EVs would ever fall to nearly the same level as gas-powered cars, and the time has officially come as Tesla is dramatically dropping its prices to spark demand and other EV brands have followed suit.
Tesla has been dropping its EV prices over the last few months. The Model 3 Sedan is now $4,930 less than the average new vehicle sold in the U.S., and the more expensive Model Y sport utility vehicle had a $13,000 price drop earlier in the year.
Ford followed closely behind, dropping the price of its electric Mustang Mach-E by an average of $4,500, and Lucid Group Inc. began offering $7,500 discounts on its EVs.
While EVs are dropping in price, gas-powered cars are doing the opposite. The average cost of a new vehicle has risen more than $10,000 since the start of the pandemic, to $47,920 in January, according to data from Bloomberg.
The rise in prices is mostly due to the shortage of computer chips, and other shortages brought on by shutdowns during the pandemic.
Tesla is continuing to build more factories, and other EV brands are doing the same. Many experts think that if demand for Tesla begins to taper off as other EVs debut, then more Tesla discounts could be in store for the future.