Tesla Drops Prices After EV Tax Credit Rollback

Tesla Charging Station

Tesla is cutting the prices of some of its vehicles to make up for a disappearing federal tax credit

The electric vehicle tax credit, set to expire by the 2017 tax bill, was cut in half at the beginning of 2019, dropping from $7,500 to $3,750. In response, Tesla reduced the price on its Model 3, Model S, and Model X by $2,000.

Besides cutting prices, Tesla has promised to pay the difference for customers who ordered vehicles before Oct. 15 expecting to benefit from the credit.

“If Tesla committed delivery & customer made good faith efforts to receive [the vehicle] before year end, Tesla will cover the tax credit difference,” said Tesla CEO Elon Musk via Twitter.

The electric vehicle tax credit will continue to be phased out in stages. On July 1, the credit will drop to $1,875, and at the start of 2020 it will disappear altogether.

Consumers missing out on the full federal tax credit can still look to their state government for financial incentives on electric vehicles. A full, state-by-state, list of EV tax credits and incentives can be found at energysage.com.

Tesla, meanwhile, continues to look for ways to make its vehicles affordable for midmarket consumers. Musk has promised a $35,000 version of the Model 3, saying it will be available sometime in 2019.

Image from Pexels.com

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