Tesla cuts car prices by nearly 20%, some models eligible for up to $7,500 in tax credits

A driver charges his electric car at an outdoor charging port.

Image source: Getty Images

What happened

Tesla has cut prices on some of its vehicles globally, including in the United States. Price cuts vary by model, with some cars reduced by nearly 20%. Consumers who receive a new qualifying electric vehicle before March 2023 may be eligible to receive up to $7,500 in federal tax credits under current clean vehicle tax credit rules that went into effect on January 1.

And

Tesla is a leading brand in the electric vehicle industry, and the news of recently reduced prices may attract more consumers to buy an electric vehicle in early 2023. The following Tesla models are now discounted in the US market, with The old and new prices, lowest prices listed for each Tesla model below:

vehicle model

Previous price

Current price as of January 13

Model 3 Standard Range RWD

$46,990

$43,990

Model 3 Performance

$62,990

$53,990

Model Y Long Range AWD

$65,990

$52,990

Y-model performance

$69,990

$56,990

When purchased and delivered before March 2023, some new electric vehicles may qualify for federal Clean Vehicle Credits of up to $7,500. Taxpayers hoping to take advantage of this tax credit must meet the adjusted gross income requirements outlined by the IRS. Not all taxpayers will qualify for credits up to $7,500, as it depends on their tax situation.

Vehicles must undergo final assembly in the US, meet build requirements, and have an MSRP not to exceed:

  • $80,000 for trucks, SUVs, and vans
  • $55,000 for other vehicles

The US is set to outline new rules regarding the sourcing of raw materials and battery components for electric cars that qualify for federal tax credits. Plans to update these rules have been delayed until at least March 2023. Once the rules change, it could affect which EVs qualify for the credit.

Now what

The recently reduced prices and potential EV tax credit opportunities could result in significant savings for eligible taxpayers. While electric vehicles are an investment, they can offer substantial savings. Along with rising food and housing expenses, gasoline prices have had a major impact on the personal financial situation of many Americans in recent years.

Consumers considering an electric car should check to see if the vehicle qualifies for current clean vehicle tax credits before buying if they hope to take advantage of the tax savings. If you are unsure about current tax laws, talk to a tax professional.

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