Tesla is giving a significant incentive for customers who opt for the Full Self-Driving (FSD) package on their Model 3 Performance and Model X vehicles. To make these vehicles eligible for the federal tax credit, Tesla is offering free hardware upgrades that would otherwise contribute to the MSRP limit.
The federal tax credit for electric vehicles has specific price limits: $55,000 for sedans and $80,000 for SUVs. Hardware options usually add to the vehicle’s MSRP, potentially disqualifying it from the tax credit. However, software options like Tesla’s FSD package do not count toward this limit. Tesla is now leveraging this distinction to help customers keep their vehicles under the price cap.
For the Model 3 Performance, Tesla is offering different paint colors for free when customers purchase the FSD package, which costs $8,000. Normally, paint upgrades can add up to $2,000 to the vehicle’s price, potentially pushing it over the $55,000 limit. By including the paint upgrade for free, Tesla ensures the vehicle remains eligible for the $7,500 tax credit.
Similarly, for the Model X, Tesla is including the 7-seat option at no extra cost when the FSD package is added. The 7-seat configuration typically costs $3,500, which could push the vehicle’s price above the $80,000 limit for SUVs. Offering this option for free allows the Model X to qualify for the federal tax credit.
This strategy effectively discounts the Full Self-Driving package, encouraging more customers to opt for it. The FSD package, which can be purchased after delivery for $8,000, is an option customers must choose at the time of purchase to benefit from the free hardware upgrades.
Tesla CEO Elon Musk has long promised that the price of the FSD package would rise as its features improve through over-the-air updates. Despite increasing the price to $15,000 at the end of 2022, Tesla has since reduced it to $8,000, making it more attractive to potential buyers.
The initiative has sparked mixed reactions. A top comment from Johnny Nemo, liked by 15 people, highlights skepticism: “FSD is WAY overpriced for software that still doesn’t work after 10 years of promises.”
Nevertheless, Tesla’s latest move aims to make its vehicles more affordable while boosting the adoption of its Full Self-Driving technology, aligning with its long-term vision of an autonomous future.
