The $7,500 federal EV tax credit is set to expire on September 30, prompting a surge in demand for Tesla Model 3 and Model Y vehicles. The IRS adjusted rules to allow legally binding contracts with marginal down payments by the deadline, enabling deliveries after September 30 to still qualify. Inventory across several U.S. markets is dwindling as customers rush to secure deliveries. Tesla is considering boosting production to meet orders and may increase Model Y pricing to protect margins, a move that could be unpopular with prospective buyers but would support higher revenue per vehicle.
With the $7,500 EV tax credit set to be removed on September 30, Tesla is experiencing increased demand for its Model 3 and Model Y. Customers are doing whatever they can to take delivery of the car they ordered as soon as possible. The IRS recently adjusted the EV tax credit's rules slightly. Previously, the vehicle had to be delivered by September 30, but a slight tweak the agency made last week will now allow customers to enter a legally binding contract along with a marginal down payment by that date. The delivery can occur after September 30, and the car can still qualify for the credit.
However, Tesla is thinking of bumping the price slightly, Raj Jegannathan, the company's VP of IT, AI Infrastructure, Apps, Infosec, and Vehicle Service Operations, said on X: Trending toward a need to expedite output even further, which could mean adjusting pricing upward in the coming days. Trying hard not to, will see. The price adjustment would come as a response to increasing production output, Jegannathan's response seems to indicate.
Inventory is dwindling in several markets across the United States, a good sign for the company, as it could have one of its best quarters in recent history in terms of deliveries. However, the bump would help Tesla's margins, but the idea that the company could adjust pricing by increasing it would not be popular with potential car buyers.
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