Tesla confirms latest price cuts make cars eligible for full $7,000 German EV subsidy

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Credit: Tesla

Tesla’s price cuts earlier this month made the Model 3 and Model Y eligible for incentives in Canada and the US. Now Tesla has confirmed the price cuts across Europe have had the same effect in Germany, where some of its cars will benefit from the full $7,000 subsidy offered by the German government.

The global price drops in Tesla vehicles mean buyers will pay significantly less for the same Tesla cars. However, the new price regime is unlocking more means for buyers to save money; through government-backed EV tax incentives.

In German, the price reductions were enough to make the Tesla Model 3 and Model Y qualify for the full $7,000 EV subsidy for the first time. The company had before complained it was deliberately targeted to not qualify by the German auto industry which has a heavy influence on the process.

However, multiple price increases had taken the two models beyond the accepted price bands for the full incentive. The new prices have now reversed that, according to a post by Tesla on LinkedIn in Germany.

The incentive comprises BAFA’s and manufacturer’s shares. It means the Model 3 could be purchased for $43,988 while the Model Y could cost $4,966. It is interesting that the difference between the two most affordable Tesla cars is effectively less than $1,000.

This change in prices will have a significant impact on the German EV industry. In China, buyers flocked to Tesla after the price cutsforcing other brands to announce their own counter move.

The development couldn’t have come at a better time for Tesla as it tries to ramp up production at Giga Berlin.