Tesla Reduces Car Prices Nearly 20%, Some Models Eligible for up to $7,500 in Tax Credits

What happened

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

So what

Tesla is a leading brand in the electric vehicle industry, and news of recently slashed prices may entice more consumers to purchase an electric vehicle in early 2023. The following Tesla models are now discounted in the U.S. market -- with the previous prices and new, lower prices listed for each Tesla model below: 

When purchased and delivered by 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 up to $7,500 in credits, as it's dependent on their tax situations. 

Vehicles must undergo final assembly in the U.S., meet manufacturing requirements, and have an MSRP that doesn't exceed: 

• $80,000 for vans, sport utility vehicles, and pickup trucks
• $55,000 for other vehicles

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

Now what

The newly slashed 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 living expenses, gasoline prices have greatly impacted many Americans' personal finance situations in recent years.  

Consumers considering an electric car should verify whether the vehicle qualifies for current clean vehicle tax credits before buying, if they hope to take advantage of tax savings. If you're unsure about current tax laws, speak with a tax professional.