A Tesla Model 3 for $20K? Yes, in California

The average new car in America sells for about $48,000. The average electric car sells for about $55,000 – more than $10,000 less than a year ago. But in some parts of California, it's possible to pay a little more than a third of that price for a brand-new Tesla Model 3.

Part of the price cut comes from Tesla's discounts. But much of it comes from stacking incentives provided by the federal government, California's state government, and even a consortium of county governments.

Tesla adjusts its prices frequently. At press time, the base Model 3 carried a sticker price of $40,240.

Tesla has an oversupply of Model 3 sedans and has begun offering factory incentives for the first time in recent months. Some Model 3 examples now carry a discount of up to $2,680. That can bring the base model down to $37,560.

Government incentives bring the cost down further.

Depending on income, many buyers qualify for a federal tax rebate of $7,500 on the Model 3, reducing the price to $30,060.

Related: How Do Electric Car Tax Credits Work?

California's own Clean Vehicle Rebate Project provides another discount of up to $7,500 for those who live in the state or own a business there. CVRP's rebates are income-dependent, like the federal incentives. For qualifying Californians, that drives the price to $22,560 – lower than the sticker price of the Nissan Leaf, which is usually America's cheapest electric vehicle (EV).

Related: Electric Car Incentives – What to Know by State

Residents of San Joaquin, Stanislaus, Merced, Madera, Fresno, Kings, Tulare, and parts of Kern Counties can qualify for yet another rebate. Those counties are part of the San Joaquin Valley Air Pollution Control District, which has its own EV rebate program.

The district provides a rebate of up to $3,000 on the Model 3, provided residents agree to hold onto it for at least 30 months. That brings to price down to $19,560 – about the price of a base model Kia Soul.

$19,560 for a $40,240 car.

The news probably doesn't apply to most readers. But there's a lesson in it even if you live outside the Golden State – states, local governments, and some electric power companies often provide incentives to help Americans buy EVs.

You might have to do some research to find them all. The system of rebates is confusing and has so many layers that not even every car dealer selling you an EV knows about every available discount. But a few hours of research could save you thousands of dollars on an electric car.

Our state-by-state EV incentive guide will get you started.

See how the latest models measure up based on expert ratings from our Kelley Blue Book editors. See all Best EV Rankings.

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