Tesla's entry-level sedan, the Model 3 RWD, is now priced below the average new car cost in the United States.
With Tesla's efforts to lower prices this year, cars like the base Model 3 are cheaper than some of the new combustion-powered cars.
The starting price for the Tesla Model 3 today is $42,990, excluding the $7,500 tax credit offered to electric vehicle buyers in the US.
This means that after the rebate, the cost of the Model 3 drops to only about $35,500.
This is already in the territory of mainstream cars like the Toyota Camry.
A Bloomberg analysis previously indicated that even without the $7,500 tax credit, the base Model 3 already costs $4,930 less than the average new car sold today.
At the same time, the cost of combustion-powered cars is increasing.
According to Kelley Blue Book data, the average new car cost in January was $49,388, up 6% from the previous year.
Tesla's decision to lower its prices last month ended up in a price war of sorts, as competitors like Ford slashed the prices of their electric cars like the Mustang Mach-E crossover, which is a competitor to the Tesla Model Y.
However, according to Wedbush Securities, Tesla is uniquely positioned in the electric vehicle sector today.
Despite the headwinds it has faced in recent years, the electric vehicle industry is still expected to grow to $1.1 trillion globally by 2030.
As analysts have pointed out, 2023 will be a "pivotal year" for electric vehicles.