Tesla originally touted the Model 3 as an electric car for the masses. With it being more affordable than other Tesla vehicles, it could be financially accessible to a greater number of people. However, it hasn’t fully lived up to that promise of financial accessibility for the masses — until now. Following a drastic price cut, the 2023 Tesla Model 3 is as cheap as the 2023 Toyota Corolla in some places. 

2023 Tesla Model 3 Base costs $27K in Oregon — same as 2023 Toyota Corolla XSE

The comparison between the 2023 Tesla Model 3 and the 2023 Toyota Corolla is interesting. The Corolla is the quintessential budget car. And as the world’s best-selling vehicle, it truly is a car for the masses. 

Until recently, the starting price of the 2023 Model 3 was $46,990, which is for the RWD Base trim. However, following the price cut, it’s now $42,990. Also, with federal and state tax credits and incentives for EVs, the price is even lower.

Electric car tax credits and incentives for the Model 3

The price for the Model 3 is especially low in states with generous tax credits and incentives for electric cars. One of the states is Oregon, as detailed by Teslarati. These credits and incentives include the $7,500 federal EV tax credit, along with another $7,500 through the Oregon Charge Ahead and Clean Vehicle rebate programs

Additional potential local incentives include $2,500 for the purchase of a new electric car and $5,000 for low or moderate-income residents. There are also other local rebates, such as for utilities, ranging from $100-$1,500.

When factoring in all of these EV credits and incentives, a new 2023 Tesla Model Base costs as low as $26,990 in Oregon. In comparison, a 2023 Corolla XSE starts at $26,700. Now, Oregon residents can get a Model 3 as cheap as a Corolla — along with the high-level performance and technological sophistication that comes with it. Also, while Teslarati looked at credits and incentives in Oregon, other states have generous ones as well — helping to push the Model 3 into Corolla territory. 

Model 3 also has the same lease price as the Corolla

Along with the 2023 Tesla Model 3 being cheaper for the purchase price compared to the 2023 Toyota Corolla in some places, it has the same lease price, according to CleanTechnica. For a 36-month lease with 10,000 annual miles and no down payment, the monthly payment for a 2023 Corolla XSE is $477. These lease terms for the 2023 Model 3 Base result in the same $477 monthly payment.

The federal EV tax credit will likely soon drop for the Model 3

There are some things to keep in mind about the tax credits for the 2023 Model 3. For one, if your income is too high, you might not qualify for the credits. Conversely, if your income is too low, your tax bill will be low, so the tax credits won’t make as much of a difference. In either of these cases, leasing could be a better option — since the federal EV tax credit only applies for buying a vehicle. 

Also, sometime in March, the IRS will rule on which cars will get the full $7,500 federal EV tax credit. This follows the implementation of the Inflation Reduction Act, which rewards American automakers. Since the Model 3’s lithium-ion batteries are from outside the United States, its tax credit will likely be cut in half — to $3,750. 

However, until then, the 2023 Tesla Model 3 is as cheap as a 2023 Toyota Corolla in some places, including Oregon. Also, the high-level efficiency of the electric car — with it not using any gasoline — further adds to its affordability. Plus, regardless of the tax credit situation, the Model 3 is much more affordable than it was in 2022.