Tesla’s Model 3 might once again be offered at a cost that falls below the much-desired threshold of $35,000, considering the federal tax credits. As per the information provided on Tesla’s official website, all newly purchased Model 3 cars in the United States now qualify for the complete federal tax credit of $7,500.
This development follows a prior reduction in the credits by 50% on April 18th for the base-level Standard Range and Long Range RWD variants.
Suppose you decide to buy a Model 3 in California. Initially, the price would amount to $41,630 before taxes. Nevertheless, considering the available federal and state incentives, the overall cost would decrease to $32,130, assuming Tesla’s assurance of meeting the criteria for full federal credit is valid. The final price might even drop below $30,000 depending on the additional incentives offered by your particular state.
It should be emphasized that the accuracy of Tesla’s assertion remains unverified by the IRS, as reported by TechCrunch. The latest information available on the IRS website, as of June 1st, indicates a $3,750 credit for the RWD models, which is lower than the $7,500 claimed by Tesla.
Some vehicles are no longer eligible for the tax credit because their batteries do not meet sourcing requirements. These requirements mandate that a minimum of 40 percent of the minerals used must be sourced from the United States or a U.S. free-trade agreement partner, and at least 50 percent of the components must be manufactured or assembled in North America.
Yearly increments will be implemented to raise these percentages, aiming to achieve 80 percent compliance for battery minerals and components by 2027.
It is worth mentioning that the $7,500 tax credit is not applicable to every car or household. Eligibility is subject to income limitations, and there is a price limit if excessive accessories are added to a Tesla.