The Tesla Model 3 and Model Y, the brand's highest-selling electric cars globally, cost less than the average transaction price for a car in the US, according to a new report. Bloomberg stated that the price war might cost the company $1.2 billion a year, but the trade-off is price parity with gas cars and trucks.

The entry-level rear-wheel-drive Tesla Model 3 costs $38,990 before taxes and additional fees, $8,700 lower than the average price of a car or truck in the US, as per the report. The Model 3 now costs $6,500 less than the entry-level BMW 3 Series, and $5,800 less than the base Mercedes-Benz C-Class.

That's before factoring in the $7,500 federal tax credit and state incentives. After applying the federal tax credit and fuel savings, the Model 3's cost of ownership is on par with a Toyota Corolla, claims the report.

Let's see if this claim holds up. According to the EPA, the average annual gas cost of a 2023 Toyota Corolla is $1,650. The entry variant's MSRP is $21,900. Based purely on gas prices and base MSRP, excluding maintenance and other expenses, the Corolla's ownership cost over three years would be roughly $26,850.

The Model 3's price estimates for New York are in a similar ballpark, according to Tesla. The brand estimates $3,000 in gas savings over three years, and after factoring in the $7,500 federal tax credit, along with an additional $2,000 New York State credit, the Model 3 would probably cost around $26,490, before taxes and fees.

Note that the figures will vary regionally, and these estimates are conservative as they don't factor in maintenance costs, sales tax, and other fees. But the claims of price parity are arguably not exaggerated.