Tesla Offers Free Upgrades On Model 3 Performance And Model X AWD For EV Tax Credit

Tesla has disclosed a new strategy to help buyers qualify for federal tax credits on its higher-end electric vehicles (EVs) by now offering free hardware upgrades on the Model 3 Performance and Model X All-Wheel Drive (AWD) when adding the Full Self-Driving (FSD) package to the order.

For the Model 3 Performance, Tesla is including premium paint options at no extra cost when FSD is added. This allows buyers to choose more costly color options without surpassing the $55,000 price limit for the $7,500 federal tax credit.

Similarly, for the Model X AWD, Tesla is offering complimentary seating upgrades including the seven-seat option (normally a $3,500 add-on), to keep the EV’s price under the $80,000 threshold for electric SUV tax credits.

As a result, this strategy takes advantage of the federal EV tax credit regulations. While hardware options contribute to the MSRP limit for eligibility, software options like FSD do not. The FSD package is currently priced at $8,000.

Read More: Clean Vehicle Tax Credit: What You Need to Know for New EVs

With Tesla facing increasing competition in the EV industry, it underscores the complex interplay between pricing, features, and government incentives in the evolving EV market.

Keeping this in mind, this strategy allows Tesla to maintain higher prices on its premium models while still making them eligible for the tax credit. It also potentially boosts the adoption of the FSD package. Tesla’s offer is available for a limited time and is subject to change.

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