Tesla Inc.’s TSLA Cybertruck now qualifies for $7,500 electric vehicle consumer tax credits, the U.S. government confirmed on its fueleconomy.gov website.
What Happened: Upon taking delivery of the Cybertruck this year, customers can get an EV tax credit of $7,500 on both the dual motor variant and the single motor variant of the stainless steel truck. Tesla is yet to start production of the single-motor variant of the truck but it will qualify for the tax credit once the company starts selling it.
With the tax credit, the effective starting price of the Cybertruck all-wheel variant will go down to $72,490 for those who qualify. The rear-wheel drive single-motor variant will start at $53,490 after the tax credit once delivery starts.
The Cyberbeast premium variant of the Cybertruck will likely not qualify for the tax credit given its starting price of $99,990, which is over the $80,000 price limit for the tax credit.
Currently, all variants of the Model Y and Model 3 in addition to the Model X all-wheel drive variant sold in the U.S. are also eligible for $7,500 electric vehicle consumer tax credits.
Why It Matters: However, the very existence of the electric vehicle consumer tax credits is currently in question. In November, Reuters reported that President-elect Donald Trump’s transition team is planning to kill the $7,500 consumer tax credit for electric vehicle purchases as part of broader tax-reform legislation. Tesla representatives reportedly supported the proposal to end the subsidy.
"In my view, we should end all government subsidies, including those for EVs, oil and gas," Tesla CEO Elon Musk wrote on X following the report.
During Tesla’s second-quarter earnings in late July, Musk alleged that the impact of the elimination of subsidies would only be slight for Tesla but devastating for its competitors. The elimination of EV subsidies would probably help Tesla in the long term, he added.
However, not all are in agreement. According to The Future Fund Managing Partner Gary Black, the killing of the consumer tax credit will have a negative impact on Tesla's EPS similar to the one experienced by the company when it resorted to price cuts to increase delivery volume in 2023. The decision will likely not impact legacy automakers given EVs are only a small segment of their business, he added.
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Photo courtesy: Tesla
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