"Tesla has to adjust its pricing strategy now that the $7,500 tax credit is gone, and when it lost the previous tax credit after reaching its cap in 2019, it used a more affordable model to surge sales. At the time, that more affordable model was the Model 3. Tesla boosted deliveries by over 50 percent that year without any tax credit by simply offering a cheaper model."
"The credit, in a way, distorts the market, and companies, while attempting to innovate, are able to offer the discount with the help of the government. Tesla price cuts push EV market toward affordability with broader influence Companies will now have to weigh what they can discount their vehicles by to keep profits reasonable, but also stoke demand. Ultimately, Tesla has the ability to use manufacturing and technological efficiencies to increase affordability. It has more control to fluctuate pricing, and price cuts could be"
The $7,500 federal EV tax credit expired at midnight on September 30, removing a point-of-sale advantage for many U.S. electric vehicle makers. Tesla could benefit as it can adjust pricing through manufacturing and technological efficiencies and has previously increased deliveries after losing a tax credit by promoting a lower-cost Model 3. Price cuts by Tesla may push the EV market toward broader affordability. Legacy automakers like Ford and General Motors have relied on the credit to offset high EV production costs and dealer markups and now must reconsider pricing, profitability, and demand strategies.
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