Tesla drastically cuts prices on Model S and Model X; Base Model X now qualifies for federal tax credit

September 1, 2023

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Wow! Tesla just drastically cut prices of the Model S and Model X, by up to $18,500. The biggest news here is that the base Model X now starts at just under $80K (excluding the mandatory $1,390 destination fee), making it qualify for the $7,500 federal tax credit ⓘ. A Model X for $73,880 is a pretty unbelievable deal. More on that below. First, the rest of the prices:

Price Drops By Model

Prices include mandatory $1,390 destination fee
Model New Price Previous Price Price Cut
Model S $76,380 $89,880 $13,500 (15%)
Model S Plaid $91,380 $109,880 $18,500 (17%)
Model X $81,380 $99,880 $18,500 (19%)
Model X Plaid $91,380 $109,880 $18,500 (17%)

So the Model X base model appears to be an amazing deal at $73,880 if you qualify for the federal tax credit. The car is eligible now because it's under the magic $80K price cap set by the government, but there are a few addtional caveats here:

  • Because of the $80K price cap, and because the 6-seat and 7-seat interiors cost more money, only the 5-seater qualifies for the tax credit. This is a huge bummer because arguably the strongest selling point of the Model X is its large size. If you're shopping for a 200 inch long SUV, you probably want the third row.
  • Adding any other "physical" options to the car will also push the price above $80K. Fortunately Tesla made all exterior paint options free, so you can get whatever color you want on the outside. But, interior color options and the yoke (😂) will push the price over $80K.
  • Software options like Enhanced Autopilot and Full Self-Driving Capability don't count against the price limit. Yes, this is a confusing part of the tax credit rules, but Telsa's build page ↗ will show you all the pricing info once you customize.
  • As usual, in order to qualify for the tax credit, you need to make less than $150K for single filers and $300K for married filing jointly. $74K is a lot of money for a vehicle. In order to get the best deal, you would need to be right in the income sweet spot where you can afford the Model X and still qualify for the tax credit.

Even putting aside the potential tax credit, the new price drops put the Model X in a league of its own in the segment. Let's compare the 7-seater to some other 7-seater EVs:

Comparable 7-Seat EV SUVs

Vehicle Base Price Range
(miles)
Length
(inches)
Width
(inches)
Height
(inches)
Tesla Model X
With 7-Seater Option
$84,880 348 199 89 66
Mercedes EQS SUV
450 Plus With 7-Seater Option
$107,900 305 202 85 68
Rivian R1S $93,800 321 201 87 72

Tesla is now undercutting its competition by tens of thousands of dollars even without the tax credit. The 7-seat EQS SUV is $23,020 more expensive than the comparable Model X. The 5-seat would be over $30,000 more expensive. For that extra money on the EQS you are getting a better dealer network and maybe some nicer materials on the inside. But you're also getting less range, a tacky interior, way slower acceleration, a worse app experience, and one of the ugliest exteriors currently for sale (perhaps outdone only by the EQS sedan).

If you do want a large SUV with only need 5 seats, the other model you should consider is the Cadillac LYRIQ. It's slightly smaller and not as well equipped on the base model, but it's another huge step down in price at nearly $20K cheaper.

Comparable 5-Seat Large EV SUVs

Prices include $7,500 federal tax credit
Vehicle Base Price Range
(miles)
Length
(inches)
Width
(inches)
Height
(inches)
Tesla Model X $73,880 348 199 89 66
Cadillac LYRIQ AWD $54,590 307 197 87 64

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