Tesla taps Biden tax credits to offset EV price cuts - Autoblog

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Tesla taps Biden tax credits to offset EV price cuts - Autoblog
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Tesla taps Biden tax credits to offset EV price cuts

, costs 20% less in the U.S. than at Christmas 2022. Including the $7,500 Biden tax credit, the price is down 35%.

The battery tax credits in the Inflation Reduction Act, which kicked in this year, amounted to a subsidy of about $900 to $1,400 on every Tesla sold in the United States in the second quarter, according to the Reuters analysis based on Tesla's forecast and U.S. sales. "Tesla's manufacturing tax credits should help to at least partially offset some of the price cuts Tesla had to implement to spur demand," Morningstar analyst Seth Goldstein said in an interview. Tesla is the biggest beneficiary of battery production credits under the IRA, which offers incentives to U.S. manufacturers. It produces batteries with supplier Panasonic in Nevada and is increasing output at its own Texas plant.

"The value of credits this year will not be gigantic, but I think it could be gigantic. We think it probably will be very significant in the future," Musk said during Tesla's earnings conference call in January.

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