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Lucid announced on Thursday that it would be offering buyers a $7,500 “credit” on the purchase of a certain new Air Touring and Air Grand Touring models between now and March 31.

Lucid is positioning its promotion as a response to its electric sedan not meeting the price cutoff for federal EV tax credits. The move follows discounts from Tesla and other EV manufacturers that have prompted fears of an EV price war in the industry.

“We think our customers still deserve a $7,500 credit for choosing an EV,” said Zak Edson, Lucid’s VP of sales and service. “Lucid Air owners have told us how much they love this car, from the world-class driving experience to the elegant design and spacious interior. With this limited time offer, we hope to get Lucid Air into the hands of even more customers so they can experience the best for themselves.”

Read: Tesla Slashes Up To $13k Off Prices In U.S. And Europe To Counter Sales Slowdown

Lucid Enters EV Price War With $7,500 Discount On Select Models

The market leader, Tesla, recently announced that it would be lowering the prices of its vehicles by up to $13,000 in the U.S. Having had time to build up its production base and create economies of scale, the move was seen as a way to put pressure on startups, like Lucid, whose vehicles cost more to make.

This isn’t the first time that Lucid has offered rebates, however. Since late 2022, the automaker has been discounting its vehicles, offering lessees up to $7,500 off if they went through Lucid Financial Services.

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The EV Brand has also offered discounts of up to $18,000 to buyers who had reserved a build spot but never made an order. Reports in December, meanwhile, alleged that Lucid had called customers up to 14 times in order to save a sale.

All point to low demand for the Lucid Air, the startup’s first vehicle, despite strong critical reception. The Air Touring makes 620 hp (462 kW/629 PS), can go up to 425 miles (684 km) on a charge, and prices start at $107,400. The Grand Touring, meanwhile, makes 819 hp (611 kW/830 PS), has a range of 516 miles (830 km), and starts at $138,000.

Both sedans are priced well above the cutoff for federal tax credits on electric sedans in the U.S. In order to qualify for incentives in the U.S., sedans most have an MSRP of less than $55,000, while SUVs must cost less than $80,000.

Lucid Enters EV Price War With $7,500 Discount On Select Models