The Tesla Cybertruck, a highly anticipated electric vehicle, has recently been approved for a $7,500 federal tax credit. This development has sparked considerable interest and discussion in the automotive world since its Cyberbeast variant exceeds the eligibility limit.
How did Cybertruck qualify for federal tax credits?
Firstly, it’s important to understand the specifics of the tax credit approval. According to the U.S. Department of Energy, as reported by InsideEVs, two versions of the Cybertruck qualify for the full $7,500 incentive: the all-wheel drive version and the top-of-the-line, tri-motor Cyberbeast version. However, the rear-wheel drive version, slated for release in 2025, is not yet listed.
This tax incentive is exclusive to pickup trucks priced under $80,000, which is a critical factor since the base price of the Cyberbeast is $99,990, exceeding the price cap. The AWD model, estimated at $79,990, theoretically qualifies, but deliveries are only expected to start in 2024, suggesting that no Cybertrucks may benefit from the tax credit this year.
Are there exceptions?
The Cyberbeast, despite its price exceeding the $80,000 cap, is listed as qualified. This inclusion is somewhat confusing, as no other model starting above this price cap is listed as qualified on the EPA site like Tesla Model X Plaid or Tesla Model X Long Range AWD. The tax credit eligibility of the Cybertruck is not just a financial incentive; it’s also a recognition of the vehicle’s technological and environmental merits.
Tesla has been developing its own battery cells, known as the 4680 cells, which are larger and more energy-dense than traditional cells. These cells are expected to significantly reduce the cost per kilowatt-hour (kWh), a key factor in making EVs more affordable.
Furthermore, Tesla’s focus on improving energy density means that its vehicles can store more energy in the same space, leading to longer ranges without the need for proportionally larger or heavier batteries.
In response to the Inflation Reduction Act, which encourages domestic production, Tesla is focusing on localizing its supply chain. This includes sourcing materials and manufacturing components within the United States or from countries that are not deemed “foreign entities of concern” under the Act.
The Act puts a spotlight on the sourcing of critical minerals used in battery production, such as lithium, nickel, and cobalt. Tesla has been working on securing sources for these minerals that are ethically and environmentally responsible. This includes investments in mining projects and agreements with suppliers that meet these criteria.
What are we looking ahead to?
Tesla has indicated that deliveries for this model will only commence in 2024. As a result, it appears that no Cybertrucks may benefit from the tax credit in the current year. The pricing strategy and the timing of the deliveries are critical factors in determining the immediate impact of the tax credit on Tesla’s sales and consumer interest.
Furthermore, the estimated prices for the different Cybertruck models vary significantly:
- Rear-Wheel Drive (RWD): $60,990, expected in 2025
- All-Wheel Drive (AWD): $79,990, expected in 2024
- Cyberbeast: $99,990, expected in late 2023
The pricing of the Cybertruck has been a topic of discussion since its initial rollout. The tax credit could make the truck more affordable for consumers, potentially impacting overall sales. However, with the rear-wheel drive model not included in the list and deliveries set to begin in 2024, the immediate impact on sales is uncertain. Additionally, upcoming changes in the EV tax credit system might influence the Cybertruck’s eligibility for full tax credits in 2024.
The Cybertruck’s eligibility for the federal tax credit is not just a testament to its innovative design but also reflects Tesla’s broader strategy of aligning with regulatory frameworks like the Inflation Reduction Act. This alignment not only benefits Tesla in terms of incentives like tax credits but also positions it as a leader in the transition towards more sustainable and efficient automotive technologies.