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Tax Rebates See Tesla Model S Still Touching 50K

Benjamin Hunting
by Benjamin Hunting
March 20, 2009

Those who dream of buying an electric car that combines a dash of pizzazz with an impressive level of performance were given hope with the announcement that the will end up costing less than $50,000. The beleaguered electric car company, which has had problems fulfilling its backlog of orders as well as communicating with the public and customers alike as to its sales and service strategy, is making use of a significant tax break on the books for buyers of pure electric automobiles in the hopes of luring potential eco-friendly drivers into showrooms. The Model S is the forthcoming sedan from Tesla, who have previously released a sporty Roadster capable of hitting 60 miles per hour from a standing start in under 4 seconds - an impressive feat for even a gasoline powered automobile. Although larger and heavier, the Tesla Model S is billed as offering similar performance, as well as a range of between 150 and 300 miles, depending upon configuration. The exact release date of the sedan is somewhat obscure, although most Tesla representatives have indicated that sometime in 2011 seems most likely. While many in the automotive industry have been critical of Tesla's premium pricing, with most of their proposed vehicles seemingly too expensive to have any mass appeal, the Model S will see its $57,400 MSRP dropped by $7,500 thanks to Uncle Sam. This places the actual purchase cost of the electric car at just under $50,000, and makes it a compelling choice for those drivers who may have instead been shopping for a mid-size BMW or Audi. When announcing the price this week, Tesla made sure to point out the impact that the tax rebate has had on the affordability of the Model S. Price reductions are well and good, but the issue remains that most electric vehicles either cost as much as an exotic automobile (the is close to $90,000), are facing huge production delays (all current Tesla products are backlogged through October of next year), or have yet to leave the drawing board in production form (the Volt). Government incentives targeted at buyers have not been at all effective at prodding electric car makers in the United States to make inexpensive electric automobiles available. This has left many drivers considering imported electric options such as the forthcoming automobiles from rather than trust that they may eventually be able to take delivery of a pricey Tesla or hit the lottery and drive home in a Fisker. Regardless of the incentives on the table, American electric car companies run the risk of being shut out of all but the upper crust of EV sales. Drivers are typically willing to adopt new technologies provided there are no significant barriers to get in their way. Elevated costs and long waiting lists could do a lot to hurt the chances of a domestic electric vehicle industry from ever taking off in the minds of buyers.


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