Tesla dominates the electric vehicle market.
Elon Musk’s group has seen its competitors gain market share because it is no longer the only company offering electric vehicles. In the US market alone, the traditional automakers Ford, General Motors, Nissan, Volkswagen, Mercedes, Porsche and the young Rivian, Lucid and Polestar, have stiff competition.
But Tesla remains the boss: The company is still by far the leader in electric vehicles, holding two-thirds (65%) of the market in the United States, according to data from S&P Global Mobility.
Of the more than 520,000 electric vehicle registrations in the United States in the first nine months of 2022, about 340,000 were Teslas, according to data from S&P Global Mobility.
The company is determined to maintain its rank and continue to dictate the direction the automotive industry should take. This applies to services, as well as technological innovations. And this also applies to the pricing policy.
A credit of $3,750
Tesla and its CEO Musk have cemented the idea that it is the services and innovations offered by the brand that will be profitable in the future. In the company, this is especially manifested with Full Self Driving (FSD), Tesla’s very advanced driver assistance system, which costs $ 15,000. FSD’s permanent updates make it almost a must-have in the Tesla galaxy. There’s no doubt that the more features the company adds to the FSD, the more its price will increase.
“Currently enabled features require active driver supervision and do not make the vehicle autonomous,” Tesla explained. But “as these self-driving capabilities evolve, your car will be continually updated via over-the-air software updates.”
The firm can then remain highly competitive by making commercial moves elsewhere. Tesla just made a spectacular offer to buyers. They will receive a $3,750 credit for each new Model 3 and Model Y purchased and delivered through December 2022. The promotion recently went into effect.
The offer is available in the “Existing Inventory” section of the Model 3 and Model Y pages on Tesla’s website, TheStreet noted. For example, a 2022 model year rear-wheel drive Model 3 currently retails at a base price of $48,350. But Tesla says the price after potential savings is $41,750. Battery range is 267 miles.
“Take delivery of a new Model 3 or Model Y in December 2022 for a $3,750 credit,” the company says without further details.
TheStreet also discovered that Tesla was offering FSD priced at $9,000 for some models, instead of the full $15,000.
Tesla vehicles currently do not receive a federal tax credit because the company has long since surpassed the 200,000 clean vehicle sales limit. But this limit will be removed from January 2023 with the Inflation Reduction Act (IRA), signed last August, giving potential buyers new incentives to choose a Tesla electric vehicle.
Under the new law, the federal electric vehicle tax credit will remain at $7,500. The eligibility period is from January 2023 to December 2032. The $7,500 tax credit is split in two: $3,750 applies if at least 40 percent of the minerals in the battery powering the vehicle come from the United States or a country with a free trade agreement with the United States.
The other $3,750 will apply if at least 50% of the battery components come from the United States or countries with a free trade agreement with the United States. In summary, the EV you buy is eligible for the full $7,500 tax credit, half, or none, depending on battery components and minerals.
Tesla’s marketing move is timely, as consumers face inflation that is at a 40-year high and affects their purchasing power. It can be a huge marketing coup, one that could force the hand of other EV makers if they are to remain competitive.
However, the timing is challenging: the industry continues to suffer from the disruption of supply chains and the increase in the price of raw materials.