Why is Tesla putting $7,500 discounts on certain models?

Tesla Inc.will offer US consumers $7,500 to have the two cheapest models delivered by the end of the year.

The discount Tesla is dangling on its new Model 3 sedan and Model Y crossover is double what the company was offering earlier this month and could be tied to changes to the US tax credit that take effect in 2023. There is a nature.

Tesla was expected to be eligible for a $3,750 credit starting in January as part of changes to federal electric vehicle incentives. Inflation control law. That changed this week when the U.S. Treasury announced that Delayed Guidance on how to meet the new battery content requirements, which could make certain consumers eligible for the full $7,500 credit early next year.

It’s very unusual for Tesla to offer such perks. Elon Musk We have had a no discount policy for years. The incentives are the latest sign that CEOs’ predictions for this year’s “magnificent” year-end aren’t working out. Tesla has cut prices and production in China, and Musk has repeatedly criticized the Federal Reserve for raising interest rates.

Tesla has already said it expects to fall just short of its target of increasing shipments by 50% this year. The automaker’s production topped deliveries of more than 22,000 vehicles during the third quarter, assuring investors that there will be another mismatch at the end of the year.