Tesla Model 3 & Y Are Eligible for $7,500 US Federal Tax Credit

Tesla Model 3 & Y Are Eligible for $7,500 US Federal Tax Credit

Image: Tesla

Tesla Model 3 and Model Y are eligible for a $7,500 US federal tax credit. At the moment, clear requirements for vehicles have not been published, but some configurations of the Tesla vehicles mentioned above are eligible for tax credit starting January 1, 2023.

The IRS has released a list of clean vehicles (EVs, plug-in hybrids, fuel cell vehicles) that are eligible for a $7,500 US federal tax credit starting January 1, 2023. The US Treasury is currently known to be delaying the guidances regarding clean vehicle requirements until March, so the list is based on qualified vehicle manufacturers who have reported that their vehicles are currently eligible for credit subject to other requirements.

The main known requirements are:

  • Have undergone final assembly in North America 
  • Not exceed a manufacturer suggested retail price (MSRP) of
    • $80,000 for vans, sport utility vehicles and pickup trucks
    • $55,000 for other vehicles

According to these requirements, some Tesla car configurations made it to the list. In particular, the base Model 3, which costs $46,990 is eligible. The Performance version is not eligible for the tax credit as it costs $62,990, which is higher than the $55,000 maximum.

An interesting point is that Model Y in a 5-seat configuration was capped at $55,000 as it is a compact SUV, making it impossible to get a tax credit when buying it, as the car starts at $65,990 in the US. However, for Tesla Model Y in the 7-seat configuration, the price cap is $80,000, making it eligible for a tax break. Thus, buyers of the 7-seater Model Y Long Range and Performance can receive a tax credit of $7,500, since their cost is below the maximum set. This is very positive news for both Tesla and its customers.

© 2022, Eva Fox | Tesmanian. All rights reserved.


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Article edited by @SmokeyShorts; follow him on Twitter

About the Author

Eva Fox

Eva Fox

Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.

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