As the US gets ready to implement new regulations on EV-tax credits, Tesla has reduced the price of two of its most expensive vehicles, marking the fifth reduction this year. According to reports, Tesla has slashed $5,000 off both the Model S and Model X. The Model 3 sedan’s price has decreased by $1,000, and the Model Y’s price has decreased by $2,000, respectively. Tesla Model S’s entry-level trim now costs $84,990 instead of the $89,990 it did at the beginning of March.
The price of the Tesla Model X plaid has been reduced to $94,990
The reduction follows new guidance on which EV models can qualify for tax credits of $3,750 or $7,500 that the US Treasury Department and IRS released in March. The new rules took effect this month.
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However, the proposed guidance stipulates that eligible vehicles must have final assembly finished in North America and must not exceed a Manufacturers Suggested Retail Price of $55,000 for cars and $80,000 for pickup trucks, vans, or SUVs. This means that both the Model S and Model X might not be eligible for tax credits.
Previously, Tesla announced that a $7,500 tax credit that has been available since January will be reduced starting on March 31 for its Model 3. The Model X SUV and the Model S each received steep discounts of $10,000 and $5,000, respectively, last month.
Given that Tesla reported a 36% increase in first-quarter deliveries last week, the price reductions appear to have increased sales. It sold 422,875 vehicles in the first three months of this year, primarily Model 3 and Model Y cars.
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