"Tesla has to adjust its pricing strategy now that the $7,500 tax credit is gone, and when it lost the previous tax credit after reaching its cap in 2019, it used a more affordable model to surge sales. At the time, that more affordable model was the Model 3. Tesla boosted deliveries by over 50 percent that year without any tax credit by simply offering a cheaper model."
"The credit, in a way, distorts the market, and companies, while attempting to innovate, are able to offer the discount with the help of the government. Tesla price cuts push EV market toward affordability with broader influence Companies will now have to weigh what they can discount their vehicles by to keep profits reasonable, but also stoke demand. Ultimately, Tesla has the ability to use manufacturing and technological efficiencies to increase affordability."
"Companies like Ford and General Motors have also reaped the benefits of the tax credit, but their situation is much different than Tesla's. Ford and GM are not profitable on their EV projects, so the EV tax credit has been relied upon to mask high production costs and dealer markups, which have widely impacted their demand. Ford is among the more popular brands that have dipped their toes into the EV market, but they have been forced to adjust their"
The $7,500 EV tax credit expired at midnight on September 30. Tesla may gain an advantage from the credit's removal by adjusting pricing strategy and offering more affordable models, as it did in 2019 with the Model 3, which boosted deliveries by over 50 percent without the credit. The credit had distorted market pricing by enabling discounts supported by government incentives. Automakers will need to weigh discounts against profits and demand. Tesla can leverage manufacturing and technological efficiencies to lower prices, while rivals like Ford and General Motors face unprofitable EV projects that had relied on the credit to mask high costs.
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