Tesla Model 3 RWD and Long Range AWD to lose the entire $7,500 federal tax credit in 2024



When accessing the Tesla Model 3 online ordering page for the United States, the electric automaker is showing an important message related to the fading tax credit.

Until 31st December 2023, two variants of the Tesla Model 3 i.e. the base Rear-Wheel Drive (RWD) and the mid-tier Long Range All-Wheel Drive (AWD) are eligible for the full Federal Tax Credit of $7,500. As soon as the next year (2024) begins, these two variants of the Tesla Model 3 will lose the tax credit entirely.

The Tesla Model 3 online ordering page says:

All new Model 3 vehicles currently qualify for a federal tax credit for eligible buyers. $7,500 tax credit will end for Model 3 Rear-Wheel Drive and Model 3 Long Range on Dec 31, 2023. Take delivery by Dec 31 for full tax credit.

– Advertisement –
Screenshot of the Tesla Model 3 online configurator for the United States, showing the phase-out of the federal tax credit.
Screenshot of the Tesla Model 3 online configurator for the United States, showing the phase-out of the federal tax credit. Credit: Courtesy of Telsa, Inc.

This is a surprising notice from Tesla to potential Model 3 buyers. Before this new tax credit notice, it was believed that the federal tax credit of $7,500 would be halved to $3,750 at the start of 2024. However, the new Inflation Reduction Act (IRA) guidance by the IRS disqualifies the Tesla Model 3 RWD and Long Range AWD models entirely from the federal tax credit scheme.

The ‘See Details’ dialog box sheds more light on why Tesla (TSLA) is losing the entire tax credit on these two Model 3 variants. “Tax credit will end for Model 3 Rear-Wheel Drive and Model 3 Long Range on Dec 31 based on current view of new IRA guidance,” Tesla’s website explains.

The US Environmental Protection Agency (EPA) website currently shows Tesla Model 3 RWD and Long Range AWD as eligible for the $7,500 tax credit. The current live version of the IRS guidance webpage for EV tax credit requirements and eligibility does not mention a criteria that disqualifies two Tesla Model 3 variants from the tax credit.

A Tesla Model 3 RWD is priced at $38,990. With the federal tax credit of $7,500, the car can be had for $31,490 and even much lower if there are state-level incentives and rebates involved like in California.

However, it’s unclear at the moment why the IRS selected only Tesla Model 3 RWD and Long Range variants to drop the entire tax credit. The Tesla Model 3 Performance variant still apparently has the full or half credit going into next year.

Tesla is also asking Model Y customers to order their vehicle before 31st December to get the full tax credit of $7,500. However, it’s unclear from the Tesla Model Y configurator page message if the federal tax credit will phase out entirely or be reduced in half. Stay tuned for the updates.

– Advertisement –

Stay tuned for constant Tesla updates, follow us on: 
Google News | Flipboard | RSS (Feedly).


Iqtidar Ali
Iqtidar Alihttp://www.teslaoracle.com
Iqtidar has been writing about Tesla, Elon Musk, and EVs for more than 3 years on XAutoWorld.com, many of his articles have been republished on CleanTechnica and InsideEVs, maintains a healthy relationship with the Tesla community across the Social Media sphere. You can reach him on Twitter @IqtidarAlii

Latest News

Cybertruck takes Monaco Hairpin turn with ease using 4-wheel steering, steals attention from ultra-luxury cars

Fairmont Hairpin Curve is a popular tourist destination in  Monte Carlo, Monaco — and what better place is to...

Chuck Cook tests Tesla FSD v12.4.1 at his difficult unprotected left turn (video)

It has been almost two weeks since Tesla started rolling out FSD v12.4.1 to a limited number of external...

Cheaper non-Foundation Tesla Cybertruck production to start in Q3 2024

During the Tesla (TSLA) Annual Shareholder Meeting Q & A session last week, the CEO Elon Musk gave an...

Tesla investors approve Elon Musk’s $56B pay package, he shares the vision for a $25T market cap

Tesla (TSLA) CEO Elon Musk was more than happy as he danced his way to the presentation floor at...
- Advertisement -

Flight 4 Starship survives reentry burn and makes a successful splashdown landing

Yesterday’s Starship launch (Flight 4/IFT-4) accomplished all of its goals. The successful launch and reentry of both Super Heavy...

SpaceX announces new Starship Flight 4 date, adds Hot-stage Jettison to the timeline, more

Elon Musk’s SpaceX has announced the earliest date of Starship Flight 4 i.e. 6th June 2024. The spaceflight company...

Starship updates: New Flight 4 schedule, watch full stack test, developments at Starbase, more

SpaceX’s orbital launch site in Starbase, Texas had a tough work routine this past week with multiple operations going...

Tesla Tips & Tricks

Watch what happens when the Tesla Model 3 screen is smashed with a hammer while driving

A tech YouTuber Taras Maksimuk has performed a very...

Even red wine doesn’t stain Tesla white seats (video)

Tesla's futuristic white interior option is the most popular...

Cybertruck rust or just dust — and how to fix the issue

It has been almost 3 months since Tesla started...

Tesla Quarterly Reports & Eearnings

- Advertisement -

You might also likeRELATED
Recommended for You