Tesla Model X Qualifies For Full EV Tax Credit After Big Price Drops On It And Model S
It's becoming a lot more affordable to purchase a Tesla Model X, thanks in part to a big price drop by the EV manufacturer, as well as a federal tax credit that the price drop now makes it eligible for. The 2023 Dual Motor Tesla Model X, formerly known as the Long Range model, was previously $88,490 and is now $8,500 cheaper. That just so happens to bring its retail price down to $79,990, which is $10 under the cutoff price for an EV to be eligible for a full tax credit. This price is for a two-row configuration with black interior, plus a tow package; some premium features, like an additional row of seats or a different-colored interior, will price the Model X over the full tax credit threshold.
The federal tax credit, which was expanded under the Inflation Reduction Act, has a maximum of $7,500 for new EVs priced under $80,000. With the new rules in place, used EVs are also eligible for a tax credit of up to $4,000, limited to 30% of the cost of the pre-owned vehicle. There is also a limit to who can receive the tax credit based on modified adjusted gross income, with a cutoff ranging from $150,000 to $300,000, depending on tax filing status. Only one credit can be claimed per EV by a taxpayer, and there are several other restrictions and caveats in the fine print.
Tesla is also lowering the cost of FSD, among other price drops
In addition to the price drop and eligible tax credit, all five color options are available for the Model X for no extra fee. Plus, Tesla is lowering the cost of its FSD Beta, a Level 2 advanced driver-assistance system. Previously $15,000, Tesla's FSD capability will now cost $12,000, a price drop of 20 percent. Because you can add FSD to your car after buying it, this extra $12,000 doesn't have to affect the Tesla's tax credit eligibility. Its monthly subscription price will remain the same for now, which is $99 or $199, depending on how advanced the autopilot is. With Enhanced Autopilot, Teslas can automatically change lanes, merge on and off highways, park (both parallel and perpendicular), and be summoned in a parking lot by your smartphone. FSD also includes the ability for a Tesla to autonomously stop at red lights. Tesla customers have not been entirely satisfied with Tesla's autonomous driving features, however.
All in all, though, these price drops mean you can now purchase a new Model X at a much lower cost than before, and not limit yourself to its standard gray color to save money. Additionally, Tesla has also been making other models more affordable. Along with the Model X, the company announced it's lowering the cost of the Model S to $74,990, which is $3,500 less than its previous sticker price. That means that, for both models, the larger-battery trims are now cheaper than what the smaller-battery options were before the price cut. Even Tesla's pricier Plaid models are now significantly cheaper, though still too expensive to be eligible for a full EV tax credit.