Tesla Semi will be incredibly affordable with US’ revamped EV tax credit

Credit: Tesla Inc.

Long-range all-electric trucks like the Tesla Semi will not come cheap. Battery costs are declining quickly, but even Tesla still lists its 300-mile Semi variant with an estimated starting price of $150,000. That’s higher than the cost of a comparable diesel-powered Class 8 truck, so the Tesla Semi would have to be very compelling to convince drivers and fleet owners to make the switch to electric.

With the Schumer-Manchin reconciliation bill or the Inflation Reduction Act of 2022, vehicles like the Tesla Semi will have more than a fighting chance in the market. The bill allocates $369 billion for programs that help fight climate change and preserve the environment, and it also includes a number of revamped EV tax credits.

While the bill’s extension of the $7,500 tax credit for consumer electric vehicles may be compelling, it is still important to note that heavy-duty commercial vehicles also stand to gain from the Inflation Reduction Act of 2022. As per the bill, commercial vehicles that weigh over 14,000 pounds are eligible for a $40,000 tax credit or an incentive worth 30% of the cost of the vehicle, whichever one is less. The Tesla Semi would likely qualify for these incentives.

Granted, the Tesla Semi has been delayed for several years now, though Elon Musk has previously noted that he believes the all-electric Class 8 truck will finally enter production sometime next year. This should go in line with Tesla’s ramp of its 4680 cells, which are expected to help the company reduce its vehicle production costs.

Tesla’s official website for the Semi indicates that the expected base price of the vehicle’s 300-mile variant is $150,000. With a $40,000 incentive, the Tesla Semi could be purchased at a price that is more affordable than a Tesla Model S and Model X Plaid without incentives. That’s a very good deal for an all-electric truck that comes with Autopilot as standard and which consumes less than 2 kWh per mile.

Interestingly enough, some states already have generous incentives for battery-electric Class 8 trucks. California, for example, offers the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), which features incentives of up to $120,000 for Class 8 sustainable vehicles. With the Inflation Reduction Act of 2022’s $40,000 incentive, the Tesla Semi would be more than affordable in states like California.

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Tesla Semi will be incredibly affordable with US’ revamped EV tax credit
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