Not long after Tesla’s 2022 end-of-year discounts and incentives, it upped the ante much higher. For example, the Model Y’s starting price dropped from $65,990 to $52,990, and now it’s eligible for a $7,500 US federal EV tax credit on top.
Many carmakers, especially those that don’t offer many EVs, are having a tough time with profit margins, to the point that they’re losing money. The lost revenue is actually coming from these OEMs’ plug-in sales, since they’re not able to produce EVs yet with huge margins like Tesla, and they may have to lower their prices notably to encourage continued sales.
If competitors lower their prices, it may encourage Tesla not to raise prices too high, but in the meantime, those rivals will likely lose even more money.
