Tesla Model 3

Tesla Model 3 Now Qualifies for Full $7,500 Tax Credit

The cheapest Tesla Model 3, the Standard Range Plus, now qualifies for the full federal tax credit of $7,500.

Tesla has made an update to its website, announcing that customers purchasing a Tesla Model 3 in the United States can now enjoy the full federal tax credit of $7,500, regardless of the model they choose. This development means that both the rear-wheel drive Model 3 and its long-range and performance variants are now eligible for the maximum tax credit for electric vehicles (EVs). Furthermore, the same level of savings applies to buyers of the all-wheel drive, long-range, or performance Model Y.

In March, the US government revised the guidelines outlining which electric vehicles qualify for the federal tax credit of $7,500, in accordance with the Inflation Reduction Act regulations signed by the president last year. The updated guidelines came into effect on April 18th and stipulate that vehicles using battery components that are at least 50 percent made or assembled in the US are eligible for a tax credit of $3,750. Manufacturers can receive the full $7,500 credit if they source a minimum of 40 percent of their critical minerals from the US or its free trade partners, excluding China.



Following the implementation of the new guidelines, several EV models were removed from the list of qualifying vehicles. However, in the days that followed, some were reintroduced. Initially, Tesla’s rear-wheel drive and long-range Model 3 could only receive a $3,750 tax credit due to the updated guidelines. However, the recent update on Tesla’s website confirms that these models are now eligible for the full $7,500 tax credit. While the specifics of how Tesla achieved compliance with the new guidelines are unclear, it is likely that adjustments were made to the vehicles’ batteries or the sourcing of critical minerals.

With this development, customers in certain locations may be able to purchase the standard version of the Tesla Model 3 for just slightly over $30,000, or potentially even lower if their state offers additional incentives for EVs.

Tesla’s commitment to maximizing the benefits available to its customers reflects the company’s dedication to the widespread adoption of sustainable transportation. By providing access to the full federal tax credit, Tesla aims to make its electric vehicles more accessible and attractive to consumers, encouraging the transition to clean and efficient mobility solutions.

Prospective Tesla buyers in the US can now take advantage of significant cost savings when purchasing a Model 3, enjoying the benefits of driving an innovative, eco-friendly vehicle while contributing to the reduction of carbon emissions.