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Tesla announces major changes to Model 3 tax incentives

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Tesla has announced major changes to the tax incentives for the Model 3, which brings pricing down significantly.

Tesla said that all three trim levels of the Model 3 now qualify for the full tax credit of $7,500, as previously, the Model 3 Performance was the only vehicle that qualified for this amount. The Model 3 Rear-Wheel Drive and Model 3 Long Range both qualified for half the amount, $3,750.

Tesla adjusts Model 3 prices amid lowered $3,750 federal tax credit

It appears Tesla is reserving vehicles with China-made batteries for other markets. It recently started shipping Model Ys from China to Canada, which may have been a strategy for reserving as many vehicles for the U.S. market that would qualify for the full tax incentive.

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Previously, the Model 3 RWD and Long Range equipped LFP prismatic cells built by CATL from China, which disqualified the vehicles for the full amount.

As a part of the Inflation Reduction Act, the Biden Administration has set aside North American-produced battery cells and vehicles for government tax credits.

The adjustments to the pricing via the tax credits bring the Model 3 RWD to just above $30,000, making it the most affordable Tesla vehicle. However, some local incentives would bring the cost of the Model 3 RWD below $30,000, making it one of the most affordable EVs on the market.

The Model 3 Long Range will now be well under $40,000.

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However, these prices also include the potential savings that Tesla factors in, which includes other potential incentives and estimated gas savings of $2,400.

Tesla states that the qualifying vehicles must be purchased new.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Tesla owners explore potential FSD pricing options as uncertainty looms

We asked Tesla owners what the company should price Full Self-Driving moving forward, as now it’s going to be subscription-based. There were some interesting proposals.

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Tesla is starting the process of removing the ability to purchase the Full Self-Driving suite outright, as it pulled the purchase option in the United States over the weekend.

However, there has been some indication by CEO Elon Musk that the price of the subscription will increase as the suite becomes more robust. But Tesla finds itself in an interesting situation with this: the take rate for Full Self-Driving at $99 per month is about 12 percent, and Musk needs a significant increase in this rate to reach a tranche in his new compensation package.

This leaves Tesla and owners in their own respective limbos: Tesla needs to find a price that will incentivize consumers to use FSD, while owners need Tesla to offer something that is attractive price-wise.

We asked Tesla owners what the company should price Full Self-Driving moving forward, as now it’s going to be subscription-based. There were some interesting proposals.

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Price Reduction

Although people are willing to pay the $99 per month for the FSD suite, it certainly is too high for some owners. Many suggested that if Tesla would back down the price to $49, or somewhere around that region, many owners would immediately subscribe.

Others suggested $69, which would make a lot of sense considering Musk’s obsession with that number.

Different Pricing for Supervised and Unsupervised

With the release of the Unsupervised version of Full Self-Driving, Tesla has a unique opportunity to offer pricing for different attention level requirements.

Unsupervised Full Self-Driving would be significantly more expensive, but not needed by everyone. Many people indicate they would still like to drive their cars manually from time to time, but others said they’d just simply be more than okay with only having Supervised FSD available in their cars.

Time-Based Pricing

Tesla could price FSD on a duration-based pricing model, including Daily, Weekly, Monthly, and Annual rates, which would incentivize longer durations with better pricing.

Annually, the rate could be $999 per year, while Monthly would stay at $99. However, a Daily pass of FSD would cost somewhere around $10, while a $30 per week cost seems to be ideal.

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These all seem to be in line with what consumers might want. However, Tesla’s attitude with FSD is that it is the future of transportation, and with it offering only a Monthly option currently, it does not seem as if it will look as short-term as a Daily pass.

Tiered Pricing

This is perhaps the most popular option, according to what we’ve seen in comments and replies.

This would be a way to allow owners to pick and choose which FSD features they would like most and pay for them. The more features available to you, the more it costs.

For example, if someone only wanted Supervised driving and Autopark, it could be priced at $50 per month. Add in Summon, it could be $75.

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This would allow people to pick only the features they would use daily.

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Tesla leaves a single loophole to purchase Full Self-Driving outright

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Credit: Tesla

Tesla has left a single loophole to purchase Full Self-Driving outright. On Sunday, the option officially disappeared from the Online Design Studio in the United States, as Tesla transitioned to a Subscription-only purchasing plan for the FSD suite.

However, there is still one way to get the Full Self-Driving suite in an outright manner, which would not require the vehicle owner to pay monthly for the driver assistance program — but you have to buy a Model S or Model X.

Months ago, Tesla launched a special “Luxe Package” for the Model S and Model X, which included Full Self-Driving for the life of the vehicle, as well as free Supercharging at over 75,000 locations, as well as free Premium Connectivity, and a Four-Year Premium Service package, which includes wheel and tire protection, windshiel protection, and recommended maintenance.

It would also be available through the purchase of a Cyberbeast, the top trim of the Cybertruck lineup.

This small loophole would allow owners to avoid the monthly payment, but there have been some changes in the fine print of the program, as Tesla has added that it will not be transferable to subsequent vehicle owners or to another vehicle.

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This goes for the FSD and the Supercharging offers that come with the Luxe Package.

For now, Tesla still has the Full Self-Driving subscription priced at $99 per month. However, that price is expected to increase over the course of some time, especially as its capabilities improve. Tesla seems to be nearing Unsupervised FSD based on Musk’s estimates for the Cybercab program.

There is the potential that Tesla offers both Unsupervised and Supervised FSD for varying prices, but this is not confirmed.

In other countries, Tesla has pushed back the deadline to purchase the suite outright, as in Australia, it has been adjusted to March 31.

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Tesla Sweden’s port deal sparks political clash in Trelleborg

The extension of Tesla’s lease has drawn criticism from the local Social Democratic opposition.

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Andrzej Otrębski, CC BY-SA 4.0 , via Wikimedia Commons

Tesla Sweden’s lease agreement at the Port of Trelleborg has triggered a political dispute, with local leaders divided over whether the municipally owned port should continue renting space to the electric vehicle maker amidst its ongoing conflict with the IF Metall union.

Tesla Sweden’s recently extended contract with the Port of Trelleborg has triggered calls for greater political oversight of future agreements.

Tesla has used the Port of Trelleborg to import vehicles into Sweden amid a blockade by the Transport Workers’ Union, as noted in a report from Dagens Arbete (DA). By routing cars via trucks on passenger ferries, the company has maintained deliveries despite the labor dispute. Vehicles have also been stored and prepared in facilities leased from the municipal port company.

The extension of Tesla’s lease has drawn criticism from the local Social Democratic opposition. Initially, the Port of Trelleborg hinted that it would not enter into new agreements with Tesla, but it eventually opted to renew its existing contract with the EV maker anyway.

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Lennart Höckert, an opposition councilor, described the port’s decision as a “betrayal of the Swedish model,” arguing that a municipally owned entity should not appear to side with one party in an active labor dispute.

“If you want to protect the Swedish model, you shouldn’t get involved in a conflict and help one of the parties. When you as a company do this, it means that you are actually taking a position and making things worse in an already ongoing conflict,” Höckert said. 

He added that the party now wants politicians to review and approve future rental agreements involving municipal properties at the port.

The proposal has been sharply criticized by Mathias Andersson of the Sweden Democrats, who chairs the municipal board. In comments to local media, Andersson described the Social Democrats’ approach as “Kim Jong Un-style,” arguing that political leaders should not micromanage a company governed by its own board.

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“I believe that the port should be run like any other business,” Andersson said. He also noted that operational decisions fall under the authority of the Port of Trelleborg’s board instead of elected officials.

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