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.
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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