Tesla confirms it will compensate for the loss of Model Y and Model 3 EV subsidies

Governments and public funds across the globe are scaling back their new or used electric vehicle subsidy programs, mostly at places where EV sales are proliferating anyway. After the US Department of Treasury issued a new EV subsidy guidance that made the bestselling Tesla Model 3 versions ineligible for federal tax credit, it's now the German government's turn to discontinue all EV subsidies.

In the US, these moves mostly affect Tesla, as it dominates the electric vehicle market, but in Europe with its wider choice of EV brands and models, the subsidy cut will affect everyone. Still, the Model Y has been the bestselling vehicle in Germany for a good while this year and the Model 3 Highland refresh is sold there, too, so Tesla sales would have been affected.

Tesla Model Y and Model 3 Highland subsidy compensation

Its reaction to the news, however, hints that it may keep and even expand its market share in one of Europe's most important EV markets. Immediately after the abrupt government announcement that it is ending its EV subsidy program prematurely, Tesla announced that it will "compensate for the termination of the government EV subsidy in Germany for new Model 3/Y orders."

The windows for the €4,500 compensation will be valid for all orders placed after December 17 when the federal subsidy expired, and for vehicles delivered by the end of the year. Not only that, but Tesla is also keeping its own €2,250 share of the subsidy for the duration:

The government funding for the sale of electrically powered vehicles (environmental bonus) was ended at short notice at the end of December 17, 2023. In order to continue to support the transition to sustainable energy, Tesla will maintain the manufacturer's share of 2,250 euros gross for Model 3 and Model Y even after the funding program ends. In addition, Tesla will compensate for the now no longer state share for all new orders with delivery by the end of 2023.

This essentially means that Model Y and Model 3 buyers will enjoy absolutely the same price discounts as before the government cut its EV subsidy program, so Model 3 Highland buyers will be able to get it for a bit over €36,000 when all of Tesla's "savings" are taken into account.

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