Less than a week after the Treasury Department unveiled new electric vehicle tax credit requirements, Tesla has offered new discounts across its lineup.
The price adjustments affect four of Tesla’s most popular vehicles. According to the car maker’s website, the cost of the Model X and Model S fell by $5,000, while prices for the Model Y and Model 3 dropped $2,000 and $1,000 respectively. Although CEO Elon Musk has expressed disapproval of discounts in the past, this is the fifth time the EV brand has dropped prices in 2023 alone.
While they rarely appeared in years prior, the company now has several reasons to continue offering discounts. For one, the Model 3, by far the brand’s best-selling product, is set to lose its $7,500 tax credit starting on April 17. The new standards set by the Treasury fully or partially eliminate incentives for many vehicles which initially qualified, due to their tightened domestic sourcing requirements. Legacy automakers have also started to eat away at the business’s formidable market share, and, with affordability becoming an ever greater issue in the auto industry, doubts are beginning to form over whether luxury EVs will remain profitable.
There are other signs that Tesla will continue making its products more budget-friendly. Rumors have circulated that a teased model mentioned in the company’s “Master Plan Part 3” paper, will be its first $25,000 vehicle. Even if these claims prove to be untrue, CEO Elon Musk has acknowledged that cheaper cars are coming in the future. It remains to be seen if the automaker’s prices will stabilize in the coming months, but if affordability continues to be an issue for customers, further discounts could arrive before the end of the year.