Tag: EV tax credit

  • Tesla Cybertruck Price Drops with Government Tax Credit

    Tesla Cybertruck Price Drops with Government Tax Credit

    While the Tesla Cybertruck has a lower percentage of parts made in the US or Canada compared to other American pickups like the Honda Ridgeline, it still qualifies for the federal tax credit. This is because its 4680 battery pack cells are produced and assembled in Texas.

    Timing for Tax Credit Eligibility

    However, there was a waiting period before it could receive the $7,500 discount from the IRS, which manages the new EV tax credit. Tesla took steps to lower the Cybertruck’s price to fall below the tax credit limit around four months ago. This was done when they began configuring non-Foundation Series units, which made the pickup $20,000 less expensive.

    Pricing Details

    In its first Foundation Series edition, the dual-motor AWD trim was priced near $100,000. Similarly, the 2026 Model Y Launch Series edition is now priced over $60,000, which includes the Full Self-Driving (FSD) feature and exclusive badging as part of a package deal. In contrast, the starting price for non-Foundation Series models is $79,990, which allows the Cybertruck to qualify for the federal tax credit for electric SUVs and pickups under the $80,000 threshold.

    Waiting Period for Tax Credit

    Despite this, a full quarter needed to pass before the Cybertruck could take advantage of the tax credit as a privately owned vehicle during the next quarter. The IRS had already added it to their list of qualifying vehicles at the beginning of the year, alongside a more affordable RWD version expected to launch this year. However, Tesla was only allowed to apply the tax credit starting from the first business day of February.

    Now, the Cybertruck’s price is much more reasonable than when it first launched at $99,990. After applying the $1,000 referral credit and military discount, and before any state incentives, the starting price is just above $70,000. This brings it very close to the average price of pickups sold in the US, whether electric or gas. However, with the Trump administration looking to eliminate new EV subsidies, there may be a limited time for the Cybertruck tax credit to remain in effect.

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    Tesla Cybertruck Price Drops with Government Tax Credit
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  • Model Y Prices Surge Ahead of Juniper Release Due to Tariffs

    Model Y Prices Surge Ahead of Juniper Release Due to Tariffs

    While Tesla is set to reveal the pricing and release date for the 2025 Model Y Juniper refresh in North America, possibly this week, buyers in the US and Canada might encounter significantly increased costs.

    Changes in US Pricing

    In the US, the Model Y Juniper could be available without the federal tax credit of $7,500. This is due to the new Trump administration’s request for a halt on all EV subsidies until a 90-day review is completed. Once this review is done, the federal agencies will provide recommendations on whether to eliminate the new EV tax credit and charging infrastructure aids altogether, with a strong possibility of that happening.

    Price Hikes in Canada

    Starting February 1, fans of Tesla’s popular Model Y in Canada will also see steep price increases. Tesla Canada has confirmed that the price of the Model Y will rise by CA$4,000 (approximately US$2,790). The Model 3 Long Range AWD and Performance trims will have even higher increases of CA$8,000 and CA$9,000, respectively.

    Coincidentally, this date also marks when the Trump administration’s new tariffs against Canada and Mexico take effect. Canada plans to respond with import taxes on US goods. As a result, Tesla appears to be proactively raising prices for all Model Y trims in Canada by nearly CA$3,000 and doubling that for Model 3 prices.

    Disadvantages for Canadian Buyers

    Canadian consumers face a tough situation as Tesla buyers since their federal EV rebate expired last year. Additionally, the CAD has been falling sharply against the USD amid the looming tariff threats.

    To add to the woes, Tesla has priced the 2025 Model Y Juniper refresh somewhat higher than the previous model in China. If it follows suit in North America, early buyers might be in for an unwelcome shock after enjoying a year of discounts and promotions that brought the Model Y price down to nearly $35,000 with combined rebates and incentives.

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  • 2025 Model Y Juniper May Lose Tax Credit Due to Trump Order

    2025 Model Y Juniper May Lose Tax Credit Due to Trump Order

    Speaking during his inauguration, President Trump stated his administration will end the “EV mandate,” confirming earlier speculations.

    When he later signed the “Unleashing American Energy” executive order, it became evident that this could lead to an instant halt of the EV tax credit payments outlined in Biden’s Inflation Reduction Act (IRA).

    Executive Order Details

    Trump’s executive order discusses abolishing the EV mandate to create a fair competition between electric and gasoline vehicles. In Section 2 of the “Unleashing American Energy” executive order, it defines the energy policies that US government agencies must follow, including a part that addresses electric vehicles:

    To abolish the “electric vehicle (EV) mandate” and enhance real consumer choice, which is vital for economic progress and innovation, by removing barriers to vehicle access; by assuring a uniform regulatory environment for vehicle choices; by ending, where suitable, state emissions waivers that restrict the sale of gasoline vehicles; and by evaluating the removal of biased subsidies and other flawed government-imposed market disruptions that favor EVs over alternative technologies, effectively forcing individuals, businesses, and government bodies to purchase them by making other vehicle types too expensive.

    Implications for EV Subsidies

    By merely stating that agencies should “consider” ending electric vehicle subsidies, it appears the current tax credit program might continue for now. However, in Section 7, titled “Terminating the Green New Deal,” Trump’s executive order clearly states that “all agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act… including but not limited to funds for electric vehicle charging stations.”

    It grants agency leaders 90 days to review the IRA program and suggest whether it aligns with the new energy policies of the Trump administration or if it should be cut. “No funds identified in this subsection shall be disbursed by a given agency until the Director of OMB and Assistant to the President for Economic Policy have determined that such disbursements are consistent with any review recommendations they have chosen to adopt,” the order emphasizes.

    Future of EV Makers

    Since the IRA was signed into law, it can’t be simply overturned by an executive order, meaning that any changes may still require a vote. However, the call for an immediate freeze on IRA-related payments could signal trouble for Tesla and other electric vehicle manufacturers.

    For example, the 2025 Model Y orders in the US are anticipated to open this week. Even if Tesla continues to honor the tax credit rebate for early buyers of the updated model, it might lack access to the reimbursement funds, forcing it to decide if it will absorb the costs.

    The 2025 Model Y Juniper is expected to be released in the US around March, similar to its launch in China and Europe. By the time potential buyers check out the reviews on the EPA range estimates after the first Juniper refresh, the tax credit might no longer be available.

    Impact on Charging Infrastructure

    The Trump administration is also eliminating subsidies for electric vehicle charging infrastructure, which could impede the pace of EV adoption in the US. Although the executive order reduces barriers to mining and refining materials for EV batteries domestically, Tesla may still qualify for subsidies for its lithium refinery or the 4680 battery that is likely to be used in the Model Y Juniper in the US.

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  • Cybertruck Price Cut for Non-Foundation Models Ahead of 2025 Release

    Cybertruck Price Cut for Non-Foundation Models Ahead of 2025 Release

    The IRS, which manages the federal EV tax credit program, has surprisingly added a single-motor Cybertruck to its list of eligible electric vehicles for 2025. Before the Cybertruck’s debut, Tesla had a reservations list featuring a rear-wheel drive (RWD) model as the least expensive option, the one that Elon Musk mentioned would begin at around $40,000 long ago.

    Tesla’s Launch Strategy

    However, Tesla initially rolled out only the pricier dual- and tri-motor Cybertruck models, including exclusive Foundation Series options that commenced at $100,000. Elon Musk suggested that the base single-motor electric pickup would be saved for a 2025 release, anticipating that by that time, the company would have enough supply of 4680 batteries and that early buyers would have snatched up the more costly variants.

    Current Developments

    It looks like that moment has arrived. Not only has Tesla halted the production of Foundation Series trims, but they’ve also begun to manufacture dual-motor and Cyberbeast trucks priced $20,000 less. Additionally, Tesla is now implementing direct price reductions on non-Foundation series Cybertrucks.

    The initial price cuts for the Cybertruck are being applied to inventory vehicles, with a reduction of $1,600 or up to $2,630 for demonstration models. When combined with referral and tax credits, the cost of an inventory Cybertruck is now closer to $70,000 rather than $80,000.

    Future Pricing Implications

    Whenever Tesla introduces discounts on inventory, it typically follows up with a more significant price drop. Therefore, a direct price cut on the Cybertruck is a possibility. If the IRS has preemptively listed the RWD Cybertruck as an eligible 2025 vehicle based on information from Tesla, this could potentially lower the starting price to around $60,000.

    While it won’t reach the promised $40,000 from years ago, it’s certainly a far cry from the $100,000 launch price. This could lead to a noticeable increase in new Cybertruck sales later this year, especially as initial enthusiasm fades and manufactured models sit unsold.

    Impact on the Used Market

    Nonetheless, a more affordable RWD Cybertruck, along with reduced prices for the dual- and tri-motor versions, is likely to significantly impact the second-hand market. Many buyers who paid over a hundred thousand for Tesla’s first electric pickup might see their investment plummet by as much as 30% in value within the first year of ownership.

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    Cybertruck Price Cut for Non-Foundation Models Ahead of 2025 Release
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  • Tesla Cybertruck Price Drops with New Federal Tax Credit

    Tesla Cybertruck Price Drops with New Federal Tax Credit

    Tesla’s Cybertruck stands out as one of the most American-made vehicles, boasting that 90% of its components come from the US, Canada, or Mexico. The assembly takes place at Tesla’s vast Gigafactory located in Texas.

    Since its launch, the Cybertruck has qualified for the federal made-in-US electric vehicle tax credit. However, due to its initial pricing above the government’s set eligibility limit, first buyers had to purchase it for over $100,000 without receiving any subsidies.

    Price Drop and Tax Credit

    Recently, Tesla has stopped making the exclusive Foundation Series units and shifted to delivering regular dual- and tri-motor Cybertrucks. This change effectively reduced the price of the Cybertruck by $20,000, allowing the dual-motor version to fall below the $80,000 limit. This change has made it eligible for the $7,500 government EV tax credit, which has been available for Tesla’s other models for some time now.

    With the IRS now listing the Cybertruck as a qualifying vehicle for the full government EV tax credit since the start of the year, it has created a dilemma for early buyers. These customers are facing significant losses from their purchases, as the reservation list ballooned to 2.5 million people, leading to a spike in second-hand prices that soared above the manufacturer’s suggested retail price (MSRP) about a year ago. Tesla had previously restricted owners from reselling their vehicles for several quarters but relaxed these rules once production could keep up with demand.

    Market Changes and Buyer Struggles

    As the initial orders were filled, the reservation list for the high-priced Cybertruck quickly diminished. Those who opted for the more affordable dual-motor Foundation Series, which initially cost over $100,000, are now confronted with a starting price of just $70,500 after accounting for tax and referral credits.

    A particular example involves an owner who invested $115,000 into their Cybertruck, including California sales tax, Tesla’s destination fee, and a matte black wrap. This individual now reports having no buyers at an asking price of $89,000.

    Comparing Prices and Options

    It comes as no surprise that even when adding Full Self-Driving (FSD) and other features that were part of the Foundation Series trim, the total cost for a new all-wheel-drive Cybertruck only reaches $86,000.

    It’s worth noting that the Foundation Series trim being sold is not in pristine condition, having only been driven for 2,800 miles. Its value has plummeted by over twenty thousand dollars, especially with rumors of a more economical rear-wheel-drive model set to launch later this year.

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