IRA Tax Credit Update
The IRA tax credit in the U.S. has been updated for many SUV vehicles to make them qualify now under $80,000, instead of $55,000. There were many people who were posting on Twitter that the original proposal was unjust, and it looks like those people were heard.
Under the new IRA tax credit structure, the following is now true for 2022 and 2023 models for these Tesla vehicles:
VehicleApplicable MSRP Limit
Model 3 RWD$55,000
Model 3 Long Range$55,000
Model 3 Performance$55,000
Model Y AWD$80,000
Model Y Long Range$80,000
Model Y Performance$80,000
This is good for both Tesla vehicle types, the Model 3 and the Model Y and what is interesting is that this qualifies for vehicle models made in 2022 and 2023. Does that mean if you buy a 2021 Tesla Model 3 or Model Y - you will not get any tax credit?
Also, other vehicle types from other companies like Ford were adjusted. The Mach-E and other vehicles that are an SUV also benefit from the same tax credit treatment.
You may also be interested in:
- The staggering economics of the Tesla semi.
- Should You Buy a 2023 Tesla Model Y?
- How regenerative braking works in EVs.
Model Y Demand Is Going to Increase
These adjustments are going to increase Model Y demand, particularly if Tesla continues its ramp at Giga Texas and gets the Model Y with 4680 batteries ramped to volume production. This is the Model Y AWD, and this vehicle will become a major seller if Tesla can sell it for around $50,000 or less.
When you look at charts of Model Y demand, the line is going down and wait times are increasing. Currently, a Model Y long range in the U.S. has a wait time from March to May 2023.
Is demand going to continue to surge for the Tesla Model Y at current prices? I think it definitely is. Now that the Model Y long range has some breathing room to go up in price over $55,000, I think we might see that happen.
My prediction is we'll see in the coming weeks an announcement from Tesla that the price of the Tesla Model Y long range is going up, and it's going to be about $59,000. If I were in the market for a Model Y long range right now, I would get one immediately.
What do you think of the IRA tax credit adjustments - are these fair?
It looks like the EV tax credit guidelines from the IRS have been updated to raise the cap on ALL Model Y vehicles to $80,000. $TSLA pic.twitter.com/hgUJpI9pN9— Rob Maurer (@TeslaPodcast) February 3, 2023
Leave your comments below, share the article with friends and tweet it out to your followers.
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.