Tesla Model Y is not eligible for IRA subsidies, and its market share in North America is worrying

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On December 30, 2022, the first tax credit model catalog of the "Inflation Reduction Act" (IRA Act) was announced, and models from Audi, Tesla and many other brands were listed. The IRA Act came into effect on January 1, 2023, and the bill is valid until 2032. According to the IRA Act, if requirements including retail price, local assembly, local proportion of battery raw materials, and consumer income restrictions are met, the IRA will provide consumers with a tax credit of up to $7,500 for the purchase of new electric vehicles. Among them, the retail price restrictions include: the retail price of electric cars is ≤ 55,000 US dollars, and the retail price of SUVs, vans and pickups is ≤ 80,000 US dollars. We compare the official website retail price of the first batch of models with the maximum retail price of the law to determine whether the model meets the retail price restrictions.

Tesla Model Y’s long-range and performance versions (five-seater) sell better, priced at $58,190 and $62,190 respectively, both of which fail to meet the maximum retail price limit of $55,000 for electric cars, making it difficult to obtain bill subsidies. Tesla has a high market share in the North American electric vehicle market. From January to September 22, there were 525,000 newly registered electric vehicles in the United States, of which about 65% were Teslas. After the IRA takes effect at the beginning of 23, it may suppress the sales of some Tesla models. In addition, Audi, BMW, Ford, GM Chevrolet, Rivian, Stellaantis, Volkswagen and other brand models are basically satisfied.

In general, the IRA bill is significantly stronger than the current policy, which is expected to accelerate the growth of electric vehicle sales in the United States, but it will have a certain impact on Tesla's market share.