Why is Tesla putting $7,500 discounts on certain models?


Tesla Inc. is offering U.S. consumers $7,500 to take delivery of its two cheapest models before year-end, a move likely to foment more debate over the extent of the carmaker’s struggle with demand.

The discount Tesla is dangling on new Model 3 sedans and Model Y crossovers is double what the company was offering earlier this month, and likely has to do with changes to US tax credits that take effect in 2023.

Teslas were expected to be eligible for $3,750 credits starting in January as part of changes to federal electric vehicle incentives made by the Inflation Reduction Act. That changed this week when the U.S. Treasury Department announced it was delaying guidance on how to meet new battery content requirements, which may make certain consumers eligible for a full $7,500 credit early next year.

It’s highly unusual for Tesla to offer such a perk, as Elon Musk has enforced a no-discount policy going back years. The incentive is the latest indication that the CEO’s prediction for an “epic” end of the year isn’t panning out. Tesla has cut prices and production in China, and Musk has repeatedly criticized the Federal Reserve for raising interest rates.

Tesla already has said it expects to come up just short of its target to increase deliveries by 50 percent this year. The carmaker’s production exceeded deliveries by more than 22,000 vehicles during the third quarter, and it’s braced investors for there to be another mismatch at the end of the year.




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