Photo: Tesla
Tesla waited for the Internal Revenue Service (IRS) to decide which of its vehicles qualifies for the full $7,500 of the EV tax credit. A couple of weeks after seeing what’s what, the brand moved and applied heavy discounts. So, everything should be just smooth sailing from now on, right? Wrong.
Tesla made some major moves after it experimented with various incentives in December of last year. It started in 2023 with a wave of price reductions in China and other select Asian markets. Two weeks later, the automaker took Europe and North America by surprise when it published its new pricing policy. Suddenly, a Model Y Long Range became a great buying opportunity.
Essentially, the automaker did two great things with this overnight change. It made sure to have its most popular models fit into the new limits established by the Inflation Reduction Act (IRA) and managed to resuscitate public interest in its vehicles in a new car market that’s slowing down with each day that passes. At the same time, it one-upped its main competitors again. Slashing your prices overnight is a display of force, even though others might argue that it’s just a strategy to get rid of inventory units and add some new orders to the backlog, so the chances for high delivery numbers remain high.
But let’s get back to you – the consumer. Now that the five-seater Model Y Long Range qualifies for the updated EV tax credit, you might want one for yourself. After all, it is a good commuting appliance and, in the right environment, can even be fun. Plus, you can order one by adding optional paint and the tow hitch without going over the $55,000 MSRP limit set in place by the IRS.
But why should you rush with the ordering process? Right now, Americans who qualify for the EV tax credit and buy an eligible vehicle can receive $7,500 from the federal government. This isn’t redeemable, nor is it a rebate. You’ll have to file your taxes, fill out the necessary forms, and make sure you have all the relevant documents, and the credit will apply to what you owe the government in 2024.
The catch is that the federal EV tax credit (aka the clean vehicle credit) has a provision regarding the sourcing of critical minerals. Right now, this isn’t included by the IRS in its guidelines for the updated EV tax credit, so buyers of qualifying EVs can get one without worrying about where the automaker sources its battery materials. However, it will be included sometime in March.
Tesla and other carmakers will have to make sure that at least 40% of the minerals found in the vehicle’s battery come from domestic sources or countries with which the U.S. has a free trade agreement in place. If this rule is not respected, then the EV tax credit gets cut in half. You’ll get only $3,750 after the IRS activates this provision. That’s because most of Tesla’s battery minerals come from China.
Since supply chains are complicated and companies may not want to take the same risks as they did with semiconductors almost three years ago, Tesla might not be in any hurry to change its suppliers and refiners. This means only one thing – after the IRS includes the mineral sourcing provision as another condition to accessing the full EV tax credit, the maximum amount available for a qualifying Tesla will be $3,750 or less.
So, if you want to take advantage of everything that’s now on the table, make sure to order your next EV from Tesla as soon as possible. Moreover, as a couple of owners showed on forums and social media platforms, delivery times are now starting to extend beyond February for some well-specced BEVs like the Model 3 Performance.
Finally, current U.S. delivery estimates on Tesla’s website show that the Model 3 RWD may reach new customers by the end of February, while the rest of the manufacturer’s lineup already extends into March. This is always subject to change, so make sure to track your EV’s building process to make sure everything’s in order.
Essentially, the automaker did two great things with this overnight change. It made sure to have its most popular models fit into the new limits established by the Inflation Reduction Act (IRA) and managed to resuscitate public interest in its vehicles in a new car market that’s slowing down with each day that passes. At the same time, it one-upped its main competitors again. Slashing your prices overnight is a display of force, even though others might argue that it’s just a strategy to get rid of inventory units and add some new orders to the backlog, so the chances for high delivery numbers remain high.
But let’s get back to you – the consumer. Now that the five-seater Model Y Long Range qualifies for the updated EV tax credit, you might want one for yourself. After all, it is a good commuting appliance and, in the right environment, can even be fun. Plus, you can order one by adding optional paint and the tow hitch without going over the $55,000 MSRP limit set in place by the IRS.
But why should you rush with the ordering process? Right now, Americans who qualify for the EV tax credit and buy an eligible vehicle can receive $7,500 from the federal government. This isn’t redeemable, nor is it a rebate. You’ll have to file your taxes, fill out the necessary forms, and make sure you have all the relevant documents, and the credit will apply to what you owe the government in 2024.
The catch is that the federal EV tax credit (aka the clean vehicle credit) has a provision regarding the sourcing of critical minerals. Right now, this isn’t included by the IRS in its guidelines for the updated EV tax credit, so buyers of qualifying EVs can get one without worrying about where the automaker sources its battery materials. However, it will be included sometime in March.
Tesla and other carmakers will have to make sure that at least 40% of the minerals found in the vehicle’s battery come from domestic sources or countries with which the U.S. has a free trade agreement in place. If this rule is not respected, then the EV tax credit gets cut in half. You’ll get only $3,750 after the IRS activates this provision. That’s because most of Tesla’s battery minerals come from China.
Since supply chains are complicated and companies may not want to take the same risks as they did with semiconductors almost three years ago, Tesla might not be in any hurry to change its suppliers and refiners. This means only one thing – after the IRS includes the mineral sourcing provision as another condition to accessing the full EV tax credit, the maximum amount available for a qualifying Tesla will be $3,750 or less.
So, if you want to take advantage of everything that’s now on the table, make sure to order your next EV from Tesla as soon as possible. Moreover, as a couple of owners showed on forums and social media platforms, delivery times are now starting to extend beyond February for some well-specced BEVs like the Model 3 Performance.
Finally, current U.S. delivery estimates on Tesla’s website show that the Model 3 RWD may reach new customers by the end of February, while the rest of the manufacturer’s lineup already extends into March. This is always subject to change, so make sure to track your EV’s building process to make sure everything’s in order.
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