Tesla announces that its entry-level vehicles Model 3 and Model Y now qualify for the full $7,500 federal EV tax credit. Fortunately, this applies to all of the variants of both cars.
With a starting price tag of $40,240 — the base Tesla Model 3 Rear-Wheel Drive now costs $32,740 after applying the $7,500 federal tax credit for electric vehicles.
The starting price of a Tesla Model Y midsize electric SUV is $47,490 — the federal EV tax credit of $7,500 brings it just under $40K ($39,990).
But the federal tax credit is just icing on the cake. There are several local EV tax credits and rebate programs offered in several US at state-level as well. We have covered them in detail for California in the past which brought the price of a Tesla Model 3 down to around $25K in the state. But with the recent hike in inflation, it must have increased by a couple of thousand dollars.
Tesla (TSLA) investor and social media influencer Sawyer Merrit researched and calculated the local EV tax credits for multiple states. Vermont (VT) and Massachusetts (MT) are on top with the most amount of tax credits and incentives bringing down the price of a base Model 3 to $26,320 and $26,830 respectively.
Top 10 US states with the lowest price of a Tesla Model 3 after federal and local tax credits and rebate programs
Following is the list of 10 US states offering local EV tax credits and incentives bringing the price of a base Tesla Model 3 under $30K and to around ~$26K.
- VT: $26,320
- MA: $26,830
- PA: $27,330
- RI: $27,820
- DE: $27,820
- NY: $28,320
- CA: $28,330
- CO: $28,330
- CT: $29,030
- ME: $29,320
A wide array of federal and state tax credits and rebate schemes have enabled potential customers to consider having a Tesla Model Y or Model 3 which are the best affordable EVs in the market today.
The base variant of the Toyota Camry starts at $26,320, the same price that a Tesla Model 3 costs in Vermont. Honda Accord starts at $27,295 which is almost $1K more expensive than the lowest-cost Model 3.
It is interesting to see electric vehicles, especially Teslas catching up with the price brackets of internal combustion engine (ICE) cars.
Tesla CEO Elon Musk originally set a goal for a Model 3 to be a $35K electric car. With the prices going down as low as $26K, Musk’s dream has somewhat come to fruition.
However, the automaker is actively working on a smaller even more affordable Tesla hatchback EV that it intends to produce at its upcoming Gigafactory in Mexico.
Know more about getting the federal and local EV tax credits and eligibility criteria at Tesla’s incentives support website.
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