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All Tesla Model 3 and Y Qualify for $7,500 U.S. Tax Credit

All of Tesla's Model 3 and Y vehicles now qualify for the $7,500 U.S. tax credit.
All Tesla Model 3 and Y Qualify for $7,500 U.S. Tax Credit

All of Tesla's Vehicles Qualify - Why?

All of Tesla's Model 3 and Model Y vehicles now qualify for the $7,500 U.S. tax credit, and this is a big win for Tesla. This includes the standard, long range, and performance models of each vehicle.

In hindsight, it would have been better for me to wait to buy my Model 3 RWD, but I didn't foresee this happening. I paid $44,000 base for my car and the price is $3,000 less than that now, along with the $7,500 tax credit. That's about $10,500 in savings I would have had, :) Ah well - I still love my car and enjoy driving it.

Anybody taking delivery starting on April 18, 2023, will be able to file their taxes next year in 2024 and qualify for this tax credit - assuming they meet the income requirements. As a reminder, those requirements are:

* Married couples filing jointly: less than $300,000
* Head of household: less than $225,000
* All other filings: $150,000

This puts the base Model 3 RWD as it stands, at $32,740, and after you factor in paint colors and other fees, you are looking at probably around $36,000, and then another few thousand dollars in interest for the loan. Still - a pretty good deal.

In order for the Model 3 RWD to qualify for the full tax credit, 40% of the minerals must be extracted or processed in the United States or a free-trade agreement partner - so something must have changed there. This will become more strict over the years, so Tesla will need to make sure minerals and manufacturing occur in the U.S. only. This is likely going to be the case with the new Lithium factory in Texas.

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Future of Tax Credit

This puts the Model 3 RWD at a price difference with a Honda Accord at about $5,000 more now. There is a $6,000 difference between the Toyota Camry and the Model 3 RWD. If these tax credits continue and Tesla finds a way to lower prices even more, the Model 3 will be a no-brainer for anyone looking for a sedan.

Many states offer tax credits and incentives for buying electric vehicles. Here are some of those, which lower the price of the Model 3 RWD even more:

State and base cost of Model 3 RWD with $7,500 federal and applicable state tax credit:

* Vermont: $26,320
* Massachusetts: $26,830
* Pennsylvania: $27,330
* Rhode Island: $27,820
* Delaware: $27,820
* New York: $28,320
* California: $28,330
* Colorado: $28,330
* Connecticut: $29,030
* Maine: $29,320

Not only that, Tesla is offering discounts on existing inventory of its Model 3 vehicles with a $2,410 of savings as well.

Most likely, the tax credit is going to continue for years to come and when Tesla releases their Model 2 or compact version, it's going to be interesting to see if there is a tax credit for those vehicles as well. The reason that will be interesting is that $7,500 off a $25,000 is a significant amount off.

What do you think of these discounts and tax credits for the Model 3? Is Tesla trying to get rid of its existing Model 3 vehicles in order to make way for Project Highland Model 3 vehicles?

In Related News: Tesla Model Y is Big Savings For Police Departments

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News.

Image Credit, Tesla, Screenshot

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