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Tesla Launches Budget EVs as $7,500 Tax Credit Ends

Tesla Launches Budget EVs as $7,500 Tax Credit Ends
Editorial
  • PublishedOctober 8, 2025

BREAKING: The end of the **$7,500 tax credit** has sent shockwaves through the electric vehicle (EV) market. Just a week after the credits expired on **September 30, 2023**, **Tesla** has unveiled stripped-down versions of its popular **Model 3** and **Model Y**, aimed at maintaining sales momentum in a rapidly changing landscape.

With federal support for EV purchases now gone, automakers are scrambling to adapt. Tesla’s new models feature significant reductions in price—around **$5,000**—by eliminating features like power seats and the **Autopilot** driver-assistance software. This drastic move highlights the urgent need for car manufacturers to rethink their strategies in a post-tax credit era.

In tandem with Tesla’s announcement, other automakers are also reacting. **Hyundai** is promoting an **$11,000 cash back incentive** for select trims of the **2025 Ioniq 5** to lure buyers. Meanwhile, **Ford** and **General Motors** are reportedly exploring ways to extend the tax credit benefits through dealer financing options, as per a recent **Reuters** report.

Officials comment that the end of these incentives has prompted a wave of creativity among automakers. According to **Ivan Drury**, director of insights at **Edmunds**, “The overarching message of tax credits going away for EVs has had a very different set of approaches from each automaker.” He emphasizes that the focus now isn’t on increasing sales but rather on sustaining them in a challenging market.

Some major manufacturers are even reconsidering their entire EV lineups. Just last month, **Stellantis** announced it would cease production of the **Ram REV 1500**, a full-sized electric pickup, citing a slowdown in demand across North America. “Stellantis is reassessing its product strategy,” the company stated.

In a similar vein, **Acura** confirmed it would halt production of the **ZDX**, an all-electric SUV. This decision aims to better align with the brand’s long-term goals, even as they plan to revive the iconic **RSX** nameplate with an all-electric compact SUV slated for release in the **second half of 2026**.

The impact of Tesla’s budget-friendly EVs on overall sales remains uncertain, as Drury notes, “We’re going to have to give that a few months.” The distinct approaches taken by each automaker will reveal which strategies resonate best with consumers during this pivotal moment.

As the EV landscape evolves, the urgency for automakers to adapt grows more critical. With the absence of tax credits, buyers are faced with new deals and options, making this an essential time for consumers to explore their choices.

Stay tuned for updates as this story develops and automakers continue to navigate the shifting tides of the EV market.

Editorial
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Editorial

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