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Wait a minute. A 20% discount plus I get a $7,500 tax credit!

Tesla Cuts Prices Across Models Sold in U.S.

Price adjustments could allow some buyers to qualify for a $7,500 U.S. electric-vehicle tax credit

Despite offering incentives, Tesla missed its 2022 growth target.

By Rebecca Elliott, WSJ

Jan. 13, 2023 12:01 am ET

Tesla Inc. TSLA 0.28%increase; green up pointing triangle cut prices for some of its vehicles sold in the U.S. by nearly 20%, aiming to lure new buyers at a time Wall Street is concerned appetite for the car maker’s vehicles is weakening.

The cuts, which span Tesla’s lineup, are likely to allow some buyers to qualify for a $7,500 U.S. government tax credit.

Elon Musk’s car company slashed the price of its baseline Model Y crossover by almost 20% to $52,990, not including certain fees. That enables buyers to qualify for the tax incentive by putting the vehicle below a $55,000 cap. Tesla’s 14% cut to the price of a high-performance version of its Model 3 sedan, which now costs $53,990, also puts that configuration within the price range needed for buyers to receive the tax benefit.

The Model 3 and Model Y are Tesla’s bestselling vehicles and represent the bulk of the company’s output. The company also lowered prices for its Model S luxury sedans and Model X sport-utility vehicles.

The company didn’t immediately respond to a request for comment.

The price cuts come a week after Tesla cut prices in China by as much as around 13% after deliveries of its Shanghai-made cars plunged in December.

Tesla is facing more competition in the electric-vehicle market as both traditional car companies and newer entrants introduce new models and capture market share.

Last month, Mr. Musk suggested that the higher-interest-rate environment was hurting vehicle demand. Tesla offered discounts to many buyers who agreed to take delivery of vehicles before January to goose sales in a year-end sales push.

Tesla closed its worst year in its stock’s history, shedding about $675 billion in market valuation in 2022—the same year CEO Elon Musk bought Twitter. But reasons for the selloff go well beyond the social media company. WSJ’s Sean McLain explains. Photo illustration: Amber Bragdon/Getty Images

Despite offering incentives, Tesla missed its 2022 growth target. It delivered about 1.31 million vehicles last year, up roughly 40% from 2021. The company initially aimed to increase annual vehicle deliveries by 50% or more.

The subdued delivery figures capped a difficult year for Tesla that saw its stock suffer its worst annual performance. The company’s stock fell about 65% in 2022.

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