Tesla’s Model 3 Performance Emerges as an Attractive Option with 2024 EV Tax Credit
Updated Federal Tax Credit Alters Tesla’s EV Landscape
The U.S. Treasury’s recent update on the federal electric vehicle (EV) tax credit, effective from January 2024, has reshaped the attractiveness of Tesla’s Model 3 configurations. With changes in eligibility, Tesla’s Model 3 Performance variant now stands out as a surprisingly appealing choice for potential buyers.
Shifting Eligibility for Model 3 Variants
As of January 1, 2024, Tesla’s Model 3 Long Range (LR) and Rear-Wheel-Drive (RWD) configurations have lost their eligibility for the $7,500 federal tax credit. In contrast, the Performance model remains eligible and, with the tax credit applied, becomes more affordable than the Model 3 LR. The RWD variant still holds the title of Tesla’s most economical sedan, even without the tax rebate.
Current Pricing with Tax Credit:
- Model 3 RWD: $38,990 (ineligible for credit)
- Model 3 LR: $45,990 (ineligible for credit)
- Model 3 Performance: $43,490 (after tax credit)
Anticipation for Model 3 “Highland”
The updated Model 3, nicknamed “Highland,” has been making waves in global auto markets, though its North American debut is pending. Recent sightings in the U.S. hint at an imminent launch, with expectations of an official announcement from Tesla this month.
Other Tesla Models Still Qualify
Despite the Performance model being the only Model 3 variant eligible for the credit, according to Teslarati several other Tesla models continue to qualify:
- Model X AWD: $79,990 (after tax credit)
- Model Y RWD: $36,490 (after tax credit)
- Model Y LR: $41,490 (after tax credit)
- Model Y Performance: $44,990 (after tax credit)
Tax Credit Details and Additional Incentives
The tax credit imposes a maximum MSRP of $80,000 for vans, SUVs, and pickups, and $55,000 for other EVs. Additionally, eligibility depends on modified adjusted gross income (AGI) limits. Certain states like Colorado offer additional tax incentives that can be combined with the federal credit, further enhancing savings.
Status of Tesla Cybertruck
Currently, the Tesla Cybertruck is not eligible for the federal incentive, likely due to its pricing above the IRA credit’s MSRP cap. The forthcoming Cybertruck AWD variant, however, might eventually meet the criteria for the tax credit.
EVXL’s Take
The restructuring of federal EV tax credits has positioned Tesla’s Model 3 Performance as a more cost-effective option for consumers. This shift, along with the anticipated introduction of the Model 3 Highland and the varied eligibility of other Tesla models, reflects the dynamic nature of the EV market and government incentives shaping consumer choices.
