The $7,500 federal EV tax credit is scheduled to expire on September 30, prompting a surge in orders for Tesla's Model 3 and Model Y. The IRS adjusted rules to allow a legally binding contract plus a marginal down payment by the deadline to secure the credit even if delivery occurs later. Inventory of Model Y is dwindling across several U.S. markets as customers rush to secure deliveries. Tesla is considering boosting production output and slightly increasing Model Y pricing to manage demand and improve margins. Company leadership warned expedited output may necessitate near-term price adjustments.
With the $7,500 EV tax credit set to be removed on September 30, Tesla is experiencing increased demand for its Model 3 and Model Y. Customers are doing whatever they can to take delivery of the car they ordered as soon as possible. The IRS recently adjusted the EV tax credit's rules slightly. Previously, the vehicle had to be delivered by September 30, but a slight tweak the agency made last week will now allow customers to enter a legally binding contract along with a marginal down payment by that date. The delivery can occur after September 30, and the car can still qualify for the credit.
However, demand is getting so crazy for the Model Y that Tesla is considering a price increase on the all-electric crossover, as well as a potential boost in production output to keep up with orders. Inventory is dwindling in several markets across the United States, a good sign for the company, as it could have one of its best quarters in recent history in terms of deliveries. However, Tesla is thinking of bumping the price slightly, Raj Jegannathan, the company's VP of IT, AI Infrastructure, Apps, Infosec, and Vehicle Service Operations, said on X: Trending toward a need to expedite output even further, which could mean adjusting pricing upward in the coming days. Trying hard not to, will see. - Raj Jegannathan (@r_jegaa) August 25, 2025
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