Tesla Offers Record-Low 0.99% APR on Model 3: The EV Affordability Equation Just Changed | Taha Abbasi

Taha Abbasi breaks down what might be the most significant EV financing deal in history: Tesla is now offering 0.99% APR on all new Model 3 orders in the United States, applicable across all loan terms. In a market where average new car loan rates sit between 7% and 8%, this promotion doesn’t just make the Model 3 competitive — it makes it the most financially compelling sedan purchase in America, gas or electric.

The deal, launched February 17, 2026, arrives at a strategic moment. Tesla is simultaneously ramping Cybercab production, facing increased competition from affordable EVs like the Chevy Equinox EV (recently discounted by $10,000), and navigating a market where consumer adoption of EVs has plateaued in certain segments. This financing offer is Tesla’s response: make the financial case so irresistible that every remaining objection evaporates.

Running the Numbers: Model 3 vs. Gas Sedans

Let’s do what Taha Abbasi always advocates: look at the actual math. The Model 3 starts at approximately $38,990. At today’s average new car loan rate of 7.5% over 72 months, a typical buyer would pay approximately $672 per month. At Tesla’s promotional 0.99% APR over the same term, that payment drops to roughly $557 — an immediate savings of $115 per month.

But the savings story doesn’t end at the monthly payment. The average American drives 13,500 miles per year. At current national gas prices of approximately $3.50 per gallon and a typical sedan’s 30 MPG fuel economy, a gas car costs about $1,575 per year to fuel. The Model 3, averaging 3.8 miles per kWh at the national average electricity rate of $0.13/kWh, costs approximately $462 per year. That’s $1,113 in annual fuel savings, or $93 per month.

Add the financing and fuel savings together and a Model 3 buyer saves roughly $208 per month compared to a comparable gas sedan financed at market rates. Over a 72-month loan, that’s approximately $14,976 in total savings. Factor in reduced maintenance costs — no oil changes, minimal brake wear thanks to regenerative braking, no transmission service — and the total cost advantage grows even larger.

Why Tesla Can Afford This

Subsidized financing costs money. So why can Tesla offer rates that undercut every competitor and every traditional bank? The answer lies in Tesla’s industry-leading margins. Even after multiple rounds of price cuts, Tesla’s automotive gross margin remains above 17% — significantly higher than legacy automakers’ EV operations, many of which are selling electric vehicles at a loss.

As Taha Abbasi has previously detailed, Tesla’s cost advantage stems from vertical integration, gigacasting manufacturing efficiency, and supply chain optimization that competitors are still trying to replicate. This structural advantage allows Tesla to use financing as a competitive weapon that companies like Ford (which lost $4.7 billion on EVs in 2024) simply cannot match.

The Edmunds Stamp of Approval

The timing couldn’t be better. Just days before this financing offer, the Tesla Model 3 won Edmunds’ Top Rated Electric Car Award for 2026, scoring 8.1 out of 10. Edmunds specifically praised the Model 3’s recent refresh, calling it “the best Model 3 yet.” The combination of third-party validation and historic financing creates a compelling narrative for buyers who’ve been sitting on the fence.

What About Federal Tax Credits?

The $7,500 federal EV tax credit adds another potential layer of savings, though eligibility depends on income limits and the vehicle’s assembly location. Buyers should verify current eligibility at the time of purchase, as policy details can shift. If the credit applies, it effectively reduces the Model 3’s price to approximately $31,490 before the financing promotion — pushing it firmly into the affordable sedan category.

How Competitors Are Responding

Tesla’s 0.99% APR significantly undercuts the market. Hyundai’s Ioniq 5 is available at 2.99% APR on select terms. The Chevy Equinox EV, despite its $10,000 discount, carries rates between 3.9% and 5.9%. Ford’s Mustang Mach-E hasn’t offered sub-2% financing in months. The only vehicles approaching Tesla’s rate are some gas models from Japanese manufacturers — and those can’t match the fuel savings.

For prospective EV buyers, Taha Abbasi’s recommendation is straightforward: if your credit score is 740 or above and you’ve been considering an electric vehicle, the math has never been more favorable. Tesla has effectively eliminated the financial argument against EV ownership. The Model 3 at 0.99% APR isn’t just cheaper than a gas car to operate — it’s now cheaper to buy, own, fuel, and maintain. The tipping point isn’t approaching; for the Model 3, it has arrived.

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About the Author: Taha Abbasi is a technology executive, CTO, and applied frontier tech builder. Read more on Grokpedia | YouTube: The Brown Cowboy | tahaabbasi.com