Tesla made a game-changing shift in direction as the majority of manufacturers raised the price of EVs. This well-known EV carmaker has disclosed price reductions for its most well-liked models. These Tesla pricing reductions could be intended specifically for GM and Ford. Are we starting to see EV prices start to come down in a market that has become much more competitive?
Why are Tesla’s costs declining?
While the causes may not be universally accepted by experts, the outcomes are essentially universal. The most popular Tesla models’ lower costs are a direct jab at established manufacturers, igniting a fictitious price war with brands we’ve known for more than a century.
According to Business Insider, these price reductions are a reaction to a drop in interest in Tesla goods. Have customers grown weary of the technologically advanced models? Did Tesla overbuild the Model 3 and Model Y, resulting in a glut of inventory and no pending sales?
How much have Tesla’s prices dropped?
Discounts of 6-20% are offered on the compact and well-liked Model 3 car and Model Y SUV. With price cuts for these more affordable vehicles, the Model S sedan and Model X SUV are also receiving 10% and 9% price cuts, respectively.
With these price cuts, the basic Tesla Model 3’s starting price is now $43,990 before the Federal EV Tax Credit.
Does the Federal EV Tax Credit apply to Tesla EVs?
The first two manufacturers to use up the previous Federal EV Tax Credit were GM and Tesla. Both manufacturers now qualify for the tax credit of up to $7,500 per car, according to new legislation outlined in the Inflation Reduction Act of 2022.
The entire cost of this Tesla EV decreases dramatically when you take into account the tax credit for the Model 3’s basic model, making it one of the cheapest EVs on the market.