Tesla cuts prices to boost sales of its cars – El Financiero

The Treasury Department and the Internal Revenue Service released guidelines late last year that irritated Musk because the Model Y wasn’t heavy enough to be considered an SUV. That means five-seat versions of the vehicle are subject to the $55,000 price limit that applies to sedans, instead of the $80,000 limit for SUVs.

Tesla now notes on its website that the $7,500 federal tax credits for which certain customers are now eligible will apply to vehicles you turn in through March.

While some parts of the new US law went into effect on January 1, the Treasury Department is still finalizing battery content sourcing requirements that could cut in half the tax credit for which certain electric vehicles are eligible.

Toni Sacconaghi, an analyst at Bernstein who gives the Tesla stock a rating equivalent to “sell,” he wrote last week that the automaker was facing “a significant demand problem” and that their challenges would persist in part because its models were too expensive to qualify for tax credits.

“We believe that Tesla you will need to lower your growth targets (and run its factories below capacity) or maintain and potentially add to recent price cuts globally, putting pressure on margins,” Sacconaghi wrote in a Jan. 2 report. “We see that heDemand woes will persist until Tesla can offer lower prices in volume, which will not be before 2025″.