If you’re thinking about making a big holiday gift this year and want to attach it to an equally big price discount, perhaps a new electric vehicle is the way to go.
There is good news and bad news on this front.
Related: Analyst casts doubt on Tesla Model 3 schedule
The U.S. government, through the Internal Revenue Service, has provided an expanded tax credit of $7,500 to electric vehicle buyers in 2023. The exemption was included in the Inflation Reduction Act of 2022, granting no not only the $7,500 tax break for new electric vehicle buyers, but also a tax break of up to $4,000. tax credit for buyers of used vehicles.
The agreement was valid for 2023 and buyers can deduct the tax exemption from the tax returns they will file in 2024.
On the negative side, it appears the tax credit is losing some of its shine.
tesla (TSLA) – Get a free report is reporting on your Model 3 web page The vehicle’s $7,500 tax break will be reduced to $3,500 by Dec. 31 unless the federal government steps in and extends the tax credit. So far, there is no evidence that the government will do so.
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“Take delivery (of a new Tesla Model 3) by December 31 to guarantee the full incentive,” Tesla advises potential customers on its website.
There is a school of thought that the government is introducing the full $7,500 tax incentive to help the EV industry move more vehicles, since its green energy initiative depends on the public buying more efficient cars and SUVs. energetically.
Whatever the reason, the full $7,500 EV tax credit is about to disappear at a time when the industry’s automakers are already slashing vehicle prices, largely due to declining sales. .
Tesla, for example, just reduced prices for the Model 3 by up to $2,250 in early October, while prices for the Tesla Model Y LR and Performance model were reduced by $2,000.
Tesla is also reducing the base lease price for its Model 3 from $419 per month to $329 and is reducing its lease price for the Model Y line from $499 per month to $399.
The company has not focused precisely on leasing, with only 5% of its electric vehicles leased in the second quarter of 2023.
However, with sales falling and a sizable tax cut starting in 2024, it’s no surprise that electric vehicle makers like Tesla are getting aggressive with discounts to attract new customers.
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