Tesla lowers the prices of its electric cars to obtain tax breaks

Tesla lowers the prices of its electric cars to obtain tax breaks

Tesla cut the Model S by $30,000 and the Model X by $41,000 to get electric car tax credits. The latest discounts offered by Tesla Inc. One of its models will newly qualify for the federal subsidy that Elon Musk has said for years the United States should eliminate.

By lowering the starting price of the Model X to $79,990 — a $41,000 reduction from the start of the year — Tesla made the SUV eligible for renewed federal tax credits under the Inflation Cuts Act, President Joe Biden's signature climate bill.

In December 2021, Musk called on the Biden administration to eliminate stimulus, citing concerns about government spending and the deficit. At the time, Tesla cars were no longer eligible for the tax credits because the company had already gone so far as to phase out the benefits.

The updated Tesla Model 3 has improved range and new features.

"I'm saying, get rid of all subsidies," the CEO told a Wall Street Journal conference call. When asked if his opposition had anything to do with the impact on competitors, Musk replied: "Maybe they need it, I don't know."

And with the Inflation Control Act, Biden eliminated the cap on the number of cars each automaker can sell before credits run low. The administration also capped retail prices at $80,000 for electric SUVs, pickups, and vans and $55,000 for cars.

Tesla's Model X is a minor player in the company's lineup, with the cheaper Model 3 sedan and Model Y crossover making up 97% of deliveries in the first half. The automaker also lowered the starting price of the Model S sedan to $74,990 from $104,990 at the start of the year.

Tesla slashed prices for the Model S and X after revealing an updated version of the Model 3 with a sleeker front fascia, a larger battery range, and a new rear touchscreen.