Subsidies bring new Tesla under $20,000 as ¼ new cars in California go green

One in four new vehicles sold in California last quarter was a zero emission vehicle (ZEV) thanks to generous federal, state and local subsidies that can bring the cost of a new Tesla Model 3 under $20,000 for qualifying individuals.

Earlier this year, the state also met its goal of selling 1.5 million ZEVs. Because California is the largest market in the United States, reaching this ZEV milestone is reflected in the fact that 34% of all new ZEVs sold in the United States are sold in California.

“California is showing the world what’s possible – fostering innovation and creating space for an industry to flourish,” said California governor Gavin Newsom in a statement. “The proof is in the numbers: 1 in 4 new cars sold in our state are zero-emission – and thanks to our unparalleled incentives that make it cheaper than ever, we’re not leaving anyone behind.”

Last December, the California Energy Commission, the state’s energy regulator, approved $2.9 billion in spending for ZEV infrastructure and production to help the state reach 250,000 installed electric vehicle (EV) chargers by 2025. The California Air Resources Board, which regulates air pollution in the state, a month earlier approved a complementary $2.6 billion plan to subsidize the purchase of ZEVs ranging from consumer vehicles to trucks and buses.

Through a combination of federal, state and local incentives, qualifying Californians were able to purchase a brand-new, base-model Tesla Model 3 for under $20,000, according to a June analysis from InsideEVs. When the price for an entry-level Model 3 at $37,830 if using all available manufacturer rebates and referral links, applying the $7,500 federal EV tax credit and another $7,500 from California’s Clean Vehicle Rebate Project brought the price down to $22,830. With some municipalities offering additional rebates, such as San Joaquin Valley’s $3,000 credit, a brand-new Tesla could cost as little as $19,830.