Tesla, which has notoriously shunned the notion of discounts, has slashed across its model line to stimulate sales.
The Treasury Department and Internal Revenue Service released guidelines late last year that irritated Musk because the Model Y didn’t weigh enough to be deemed an SUV. That means five-seat versions of the vehicle are subject to the $55,000 price cap that applies to sedans, rather than the $80,000 limit for SUVs.
Tesla now notes on its website the $7,500 federal tax credit that certain customers are now eligible for will apply to vehicles it delivers through March. While some parts of the new US law went into effect on Jan. 1, the Treasury Department is still finalizing battery-content sourcing requirements that could cut the tax credit certain EVs are eligible for in half.
Toni Sacconaghi, a Bernstein analyst with the equivalent of a sell rating on Tesla shares, wrote last week that the carmaker was facing “a significant demand problem” and that its challenges would persist in part because its models were too expensive to qualify for tax credits. “We believe Tesla will need to either reduce its growth targets or sustain and potentially increase recent price cuts globally, pressuring margins,” Sacconaghi wrote in a Jan. 2 report. “We see demand problems remaining until Tesla is able to introduce a lower-priced offering in volume, which may only be in 2025.”
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