--- title: The Price of the Average Electric Car Dropped Over $3,000 Last Month description: 'Electric vehicles are becoming much more affordable: The average EV price dropped $3,300 last month after Tesla cut MSRPs.' authors: - name: Pete Grieve role: Lead News Reporter url: https://money.com/author/pete-grieve/ bio: Pete Grieve is a personal finance reporter. In his time at Money, Pete has covered everything from car buying to credit cards to the housing market. education: University of Chicago, BA Political Science at_money_since: 2022 articles: 599 covers: - Shopping - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Taxes social: - https://twitter.com/pete_grieve - https://linkedin.com/in/pete-grieve-b5aa02138 - https://www.facebook.com/petegrieve4 editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Shopping - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2023-02-13T19:19:53.000Z' modified: '2023-02-13T19:19:53.000Z' section: Shopping tags: - cars - News word_count: 403 canonical: https://money.com/average-electric-car-price-drop-tesla/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![electric car charging socket and lead by the beach](https://img.money.com/2023/02/News-Cheaper-EV-Prices.jpg) [Tesla’s steep price cuts](https://money.com/ev-price-war-tesla-ford/) last month helped drive down the average price of a new electric vehicle (EV) in the U.S. by more than $3,300. The average price of an EV fell from $62,088 in December to $58,725 in January, a 5.4% decline, according to a new [report](https://www.coxautoinc.com/market-insights/kbb-atp-january-2023/) from vehicle valuation company Kelley Blue Book. New Teslas sold for $59,648 on average in January, down from $65,080 a month before, which is a drop of $5,432, or 8.4%. The lower sales prices are largely due to Tesla's Jan. 13 price cuts, which were intended to increase sales volumes and make more of their cars eligible for [new EV tax credits](https://money.com/2023-ev-tax-credits-save-7500/) of up to $7,500. Since then, Tesla has tinkered with its prices several times. Right now, the Model 3 sedan starts at $42,990, down from $46,990 before the cuts, while the Model Y SUV starts at $54,990, down from $65,990. The Tesla Model 3 and Model Y were the two most popular EVs last year. Another report showed that [used versions of these Tesla models](https://money.com/used-tesla-prices-gas-powered-cars/) have also dropped significantly in price recently. ## New or used, your car is an investment. Make sure it's protected! ### Get the coverage you need without breaking the bank. Click your state to get a free quote today. [View Rates](https://money.com/pr/u2990e3ad5c8?ap_referrer=%2Faverage-electric-car-price-drop-tesla%2F) ## Why it matters Tesla’s price cuts had a significant impact on average EV prices because the manufacturer’s vehicles represent about two-thirds of the EV market, according to Kelley Blue Book. - Customers are taking advantage of the fact that these cars just became much more affordable. “Lower prices likely helped Tesla deliver higher sales volumes,” the report said, noting that sales were 30% higher last month than January 2022. - At the end of January, Ford followed Tesla and announced price cuts ranging from $600 to $5,900 for its electric Mustang Mach-E SUVs. And then last week, Lucid, a luxury EV manufacturer, announced it’s offering $7,500 “credits” on some of its vehicles, which are too expensive to qualify for the government’s tax credits. ## Bottom line Electric vehicles aren’t the only cars that are getting cheaper. In January, the average price of a new vehicle declined from an [all-time high](https://money.com/average-new-car-price-record-high/) in December, falling by $310 to $49,388. But the drop in average EV prices last month was far steeper than the drop in average price for any other type of car. ## Keep those you love safe on the road with an Auto Insurance policy ### Get the most flexible and comprehensive auto insurance policies that can be tailored to their needs. Click below to learn more. [View Rates](https://money.com/pr/uf087488c3e8?ap_referrer=%2Faverage-electric-car-price-drop-tesla%2F&url=%2Fcar-insurance%2Flp%2Fcar-insurance-match-tool-pub-t1) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/average-electric-car-price-drop-tesla/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Shopping", "item": "https://money.com/shopping/" }, { "@type": "ListItem", "position": 3, "name": "Electric Vehicles", "item": "https://money.com/electric-vehicles/" }, { "@type": "ListItem", "position": 4, "name": "The Price of the Average Electric Car Dropped Over $3,000 Last Month" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/average-electric-car-price-drop-tesla/#webpage", "url": "https://money.com/average-electric-car-price-drop-tesla/", "name": "The Price of the Average Electric Car Dropped Over $3,000 Last Month", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-02-13T19:19:53.000Z", "mainEntity": { "@id": "https://money.com/average-electric-car-price-drop-tesla/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/average-electric-car-price-drop-tesla/#breadcrumb" }, "dateModified": "2023-02-13T19:19:53.000Z" }, { "@type": "NewsArticle", "headline": "The Price of the Average Electric Car Dropped Over $3,000 Last Month", "articleSection": "Shopping", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/02/News-Cheaper-EV-Prices.jpg", "width": 2700, "height": 1802, "caption": "News-Cheaper-EV-Prices" } ], "author": [ { "@type": "Person", "name": "Pete Grieve", "url": "https://money.com/author/pete-grieve/", "@id": "https://money.com/author/pete-grieve/#author", "description": "Pete Grieve is a personal finance reporter. 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