Tesla Reduces Price Of Model S by $30,000 and Model X by $41,000 to Qualify For EV Tax Credits

Tesla has cut the prices for two of its models so that the vehicles will qualify for federal subsidies.

By dropping the starting price of the carmaker’s Model X to $79,990 — a $41,000 reduction — it makes the SUV eligible for the federal tax credits revamped by the Inflation Reduction Act.

In 2021, Tesla’s CEO Elon Musk called for the Biden administration to get rid of the incentives over concerns about government spending and the deficit, the Auto Blog reported. During that time, Teslas were no longer eligible for the tax credits because the electric car company had reached a limit that triggered a gradual phase-out of the benefit.

“I’m literally saying, get rid of all the subsidiaries,” Musk said during a Wall Street Journal conference.

With the Inflation Reduction Act, a climate bill created by President Biden, it discarded a cap on how many vehicles each automaker could sell before the credits dwindled. The administration also set maximum retail prices at $80,000 for electric SUVs, vans, and pickups, and $55,000 for cars.

Tesla also dropped the starting price of its Model S to $74,990, from $104,990 at the start of the year.

Tesla recently announced a revamped version of its Model 3, including a sleeker front end, extended battery range, and a new rear touch screen.