Tesla cuts vehicle prices by $2,000 to 'partially absorb' the blow from reduced tax credits


Posts: 2,466   +549
Staff member

Tesla's cars are some of the most popular electric vehicles out there, but there's no denying that they are also pretty expensive. The Model 3 might be the most affordable option, but its $35,000 still puts it slightly out of reach for the masses.

To soften the blow of their cars' high price tags, Tesla has always offered federal EV tax credits to US residents; usually amounting to around $7500 in total savings.

Though not quite the same as a direct discount, these incentives have made Tesla's cars much more appealing to budget-conscious EV enthusiasts over the years. Unfortunately, due to the company surpassing 200,000 EVs sold in 2018, those incentives are on their way out.

The $7500 incentive has already been halved to $3750 as of the start of 2019, and it will be halved again during Q2 2019. In 2020, it will disappear entirely.

Tesla recognizes that these incentives are major selling points for their vehicles - that's why the company formed the "EV Drive Coalition" with other prominent EV makers in late 2018. The Coalition's sole purpose is to convince regulators to preserve EV tax incentives for as long as possible.

Now, Tesla has taken things a step further, opting to slash the price of its Model 3, Model S, and Model X vehicles by $2,000 across the board. That still doesn't quite make up for the $7500 incentive's loss (combined with the new $3750 tax credit, customers now save around $5750), but it's certainly better than nothing.

It's unclear how long these discounts will last, though, so now might be a good time to snag one of Tesla's cars if you've been holding off.

Permalink to story.



Posts: 3,211   +1,455
I'm surprised they're cutting the cost on the expensive models. I read (here I think) that Tesla stopped making it's baseline Model S because no one buys them. Meaning... if you're buying a Tesla, you have plenty of money to spend a few thousand more on it. I'd guess it's to align with the competition, but so long as there is still a waiting list, why do that?

Maybe this is just the first effect of Musk being on the sidelines now.
  • Like
Reactions: Clamyboy74


Posts: 12,353   +5,768
So they basically dropped the price of fuel five cents per gallon. While every penny does count. It is not that big of deal, considering the price of the car.

They probably cut cost somewhere in order to absorb the discount. I guarantee the cost is not coming out of their pocket.


Posts: 529   +180
"The Model 3 might be the most affordable option, but its $35,000 still puts it slightly out of reach for the masses."

Cohen: you must be sleeping or dreaming! The cheapest Model 3 is $46,000!