Tesla is cutting its car prices in the United States by $2,000, but unfortunately, customers won’t see much of a difference in their wallets.
The company is lowering its prices to offset the loss of a federal tax credit, given to people who help the planet by buying electric vehicles. The federal government only offers the tax credit to companies that have sold fewer than 200,000 plug-in vehicles. In July, Tesla passed that mark and triggered a phase-out of the tax credit, when, according to CNN, it became the first carmaker in the United States to sell more than 200,000 plug-in vehicles.
Before January 1, Tesla buyers were entitled to a tax credit of $7,500. Now, Tesla buyers only get half that credit, or $3,750, for the next six months, before it falls to $1,875 in July. Come 2020, the tax credit disappears entirely (although no one will care since two-thirds of the world’s wild animals are on track to disappear by 2020, too).
To lure would-be Tesla owners, the company announced that it is lowering its prices. However, the $2,000 price cut doesn’t come close to matching the discount associated with the $7,500 tax credit and appears to have spooked investors, with Bloomberg reporting a nearly 10% fall in stock price in the wake of the announcement and “fourth-quarter deliveries that fell just short of analysts’ estimates.”
Even with the price cut, absent the federal tax credit, Tesla customers may simply wait until the long-promised $35,000 Tesla Model 3 is finally on the market. CEO Elon Musk said in an interview on 60 Minutes that he expects the lower-priced Tesla model to be available in five to six months.