The Blubber

The base version of the Tesla Cybertruck is now eligible for a $7,500 federal tax credit in the U.S., a move that could help boost sales amid challenges with demand. However, this incentive may be short-lived as both Tesla CEO Elon Musk and President Donald Trump have expressed intentions to eliminate the federal electric vehicle subsidy.

When Tesla introduced the production version of the Cybertruck in late 2023, its pricing was significantly higher than initially promised. Despite this, Tesla managed to price the dual-motor version just under $80,000, the threshold for electric SUVs and pickup trucks to qualify for the federal tax credit.

Initially, Tesla began deliveries with the pricier Foundation Series Cybertruck, starting at $20,000 above the base model, making it ineligible for the tax credit. In October 2024, Tesla started delivering the non-Foundation Series Cybertruck priced at $80,000, but it was not immediately eligible for the incentive for unclear reasons.

This situation has now changed. The IRS recently updated its website to confirm that the Cybertruck Dual Motor and the Single Motor (not yet in production) are eligible for the $7,500 tax credit for electric vehicles.

The delay in eligibility might stem from compliance with additional government requirements beyond pricing, particularly around the sourcing of parts and materials. Notably, the Cybertruck is the only Tesla vehicle to feature the company’s in-house manufactured battery cells, which may have required additional approval processes.

The tax credit is expected to aid Cybertruck sales, which have faced headwinds. Tesla has reportedly struggled to sell the vehicle in the U.S., resorting to measures like buffing off Foundation Series badges to market them as standard models and homologating U.S.-intended trucks for Canada.

However, the extent to which the tax credit will drive demand remains uncertain. Eligibility requirements also apply to buyers, limiting the incentive to individuals earning less than $150,000 (or $300,000 for joint filers). This could pose a challenge, as higher-income individuals, who often purchase luxury vehicles like the Cybertruck, may not qualify for the credit.