Tesla Model Y Most Likely Won’t Hold Full EV Tax Credit in 2024

Tesla enthusiasts, brace yourselves for changes in the federal EV tax credit landscape, especially concerning the highly sought-after Tesla Model Y.

Recent updates from Tesla’s online configurator and official announcements shed light on adjustments expected to take effect after 2023.

Tesla Model Y and the Federal EV Tax Credits

The Tesla Model Y, a groundbreaking electric vehicle (EV), is changing its condition for the complete $7,500 federal EV tax credit.

According to information available on the Tesla Model Y online configurator, the company anticipates a reduction in the tax credit amount beyond December 31, 2023.

Notably, all configurations of the Model Y currently qualify for the full $7,500 credit, provided customers take delivery before the end of the year.

Changes Affecting Model 3 Variants

In addition to the Model Y adjustments, Tesla confirms that starting in 2024, the Model 3 Rear-Wheel Drive and Model 3 Long Range variants will no longer be eligible for the $7,500 tax credit.

However, the Model 3 Performance variant may still qualify for the credit, giving customers a potential window of opportunity if they take delivery before the year-end deadline.

The shift in eligibility criteria aligns with the federal tax credit’s tighter rules on foreign content, which were introduced in 2024. Observers note that the Tesla Model 3 variants losing eligibility for the credit in 2024 are equipped with China-sourced LFP cells.

This thing raises questions about whether the Model Y variants destined for the U.S. market will follow a similar sourcing pattern.

Despite these changes, Tesla’s leasing options, and those of other EV manufacturers, may still tap into commercial credits. This strategy allows manufacturers with captive leasing companies to claim a $7,500 credit, passing on equivalent savings to customers.

Lessees, regardless of whether their chosen vehicles exceed price caps or battery-content requirements, stand to benefit from this approach.

Future Prospects and Dealer Rebates

Starting in 2024, the federal tax credit will transform into an instant rebate—a development eagerly anticipated by dealership franchises. During changes affecting many, Tesla stands out with its unique strategy. The renowned EV company, recognized for its direct-to-customer sales model, persists in selling its vehicles without the conventional franchise middleman.

Also, see; Tesla Model 3 Facelift Unveiled at French Owners Club

FAQs

1. Can Model 3 Performance variants still qualify for the tax credit after 2024?

As per the latest information, Model 3 Performance variants may continue to qualify for the $7,500 tax credit if customers take delivery before December 31, 2024.

2. Can I still benefit from the $7,500 tax credit if I lease a Tesla Model Y after 2023?

Leasing options, including those offered by Tesla, may continue to utilize commercial credits, allowing lessees to enjoy equivalent savings. For the latest details, it’s advisable to verify with the manufacturer as its specifications could change.

3. Why are Model 3 variants losing eligibility for the tax credit in 2024?

Model 3 variants losing eligibility are reportedly using China-sourced LFP cells, which may no longer comply with the tighter foreign content rules introduced in 2024.

In summary, as we approach 2024, the evolving landscape of federal EV tax credits introduces new considerations for Tesla Model Y enthusiasts and the broader electric vehicle community.  

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Aliha Zulfiqar
Aliha Zulfiqarhttp://thetricenet.com
With a major in English Language and Literature, I'm a dedicated SEO Content Writer. Also, I love to write about technology. With over 2 years of experience, I've had the privilege of contributing to various renowned platforms. As I look forward to the future, I am committed to refining my work and delivering content that stands out.

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