Tesla is doubling discounts on its Model 3 and Model Y EVs delivered in the United States this month to $7,500, the same amount customers will get next year in the form of the full federal tax credit.
According to Tesla's customer website, Model 3 and Model Y vehicles delivered before the end of the year are offered with a $7,500 credit plus free supercharging for 10,000 miles (16,093 kilometers).
That is up from the $3,750 credit Tesla has offered on Model 3 and Model Y vehicles delivered before year-end. The move comes amid concerns the automaker is facing dwindling demand as EV tax incentives loom and economies slow.
The latest discount also comes just days after the US Treasury Department delayed restrictions on EV incentives until March, which means Teslas and other US-made EVs are likely to qualify for the full $7,500 credit temporarily starting January 1, 2023.
Reuters reports that many customers have canceled their orders and held off their purchases until the new credits take effect in January. To qualify for the new tax credit instated by the Inflation Reduction Act, buyers need to take delivery of their vehicles on or after January 1.
This has obviously taken its toll on Tesla demand and has also contributed to an increase in cancellations as the company is not allowing buyers to delay orders for delivery in January. Tesla is also offering $5,000 credit in Canada on Model 3 and Model Y vehicles delivered before the end of the year, and has also given a discount of 6,000 yuan ($860) on some models in China to the end of 2022.
Such discounts—that's exactly what they are, despite Elon Musk previously saying Tesla doesn't do discounts— are rare for the EV maker, which has increased prices repeatedly over the past couple of years, blaming supply chain disruptions and inflation for that. Now, it looks like the automaker is trying to boost deliveries as the year draws to a close.
In October, Tesla said it would miss its vehicle delivery target this year, but downplayed concerns about demand after its revenue missed Wall Street estimates. Some analysts believe the most recent price cuts do not send the right message to the markets, failing to raise confidence for investors.