Tesla announced that some versions of its popular Model 3 sedan will lose access to the full $7,500 federal electric vehicle tax credit starting in 2024.
On January 1, 2024, the tax credit amount will reduce to $3,750 for the rear-wheel drive and long range versions of the Model 3, according to the company. Customers who take delivery by December 31, 2023 can still qualify for the full $7,500 amount.
The performance version of the Model 3, which starts at an MSRP of $50,990, will still qualify for the full tax credit in 2024.
Additionally, purchasers must meet requirements related to income and vehicle price caps to receive the full tax credit amount. Married couples filing jointly can earn up to $300,000 in adjusted gross income, while the cap is $225,000 for heads of households and $150,000 for other filers. The Model 3’s purchase price cannot exceed $55,000.
There are currently three different versions of the Model 3 available from Tesla. The rear-wheel drive model starts at $38,990 MSRP, while the long range model starts at $45,990 and the performance begins at $50,990.
Buyers can apply the credit to offset their federal tax bill. Tesla will also offer to apply the credit at the point of sale to reduce the purchase price in 2024. State and local electric vehicle incentives may also still apply.
The phase out of part of the tax credit is due to China being foreign entity of concern according to Department of Energy.
Should you buy now?
The Highland Model 3 update is coming soon, maybe within weeks. Trying to save money now by not waiting for the latest tech may leave you with buyer’s remorse. Personally, I’m eyeing on the new long range when it becomes available.