At the top of the Tesla.com is a banner that shows Tesla Model 3 qualifies for the full Inflation Reduction Act (IRA)’s $7,500 tax credit for consumers. With that adjustment, Tesla’s entire mass volume vehicle line up of Model 3 and Model Y qualify for the max tax credit.
Let’s run the math and see how much a Model 3 would cost with this tax credit.
| Model 3 Rear-Wheel Drive (RWD) As of Jun 4, 2023 | $40,240 |
| Federal Inflation Reduction Act Tax credit | -$7,500 |
| Price After Federal Tax credit | $32,740 |
| For resident of California and meet income limits Clean Vehicle Rebate Project (CVRP) $135,000 single filer $175, 000 head of household $200,000 joint filer https://cleanvehiclerebate.org/en/eligibility-guidelines | -$2,000 |
| Price After California rebate | $30,740 |
| For resident of Colorado and pay Colorado tax, increases to $5,000 after July 1, 2023 for MSRP up to $80,000 and after January 1, 2024, MSRP under $35,000 qualifies for additional $2,500 https://evco.colorado.gov/get-the-facts/save-money | -$2,000 |
| Price after Colorado rebate | $30,740 |
| For New York residents Drive Clean Rebate for Electric Cars https://www.nyserda.ny.gov/All-Programs/Drive-Clean-Rebate-For-Electric-Cars-Program | -$2,000 |
| Price after New York rebate | $30,740 |
| For Oregon residents, Oregon Clean Vehicle Rebate Program All Oregon residents qualify for this. https://goelectric.oregon.gov/incentives-rebates (Low income qualify for additional $5,000 but that program is currently suspended due to popularity.) | -$2,500 |
| Price after Oregon rebate | $30,240 |
| Tesla estimates that in 6 years of ownership, the owners will enjoy gas savings of $4,800. | -$4,800 |
| If you include the gas savings to the all the credits, | New York, Colorado, California: $25,940 Oregon: $25,440 |
Someone who qualifies for Federal tax credit and one of the state rebates would effectively pay under $31,000. That is within the price range for a base Honda Accord and below some models. 2023 Honda Accord LX MSRP is $27,295, EX is $29,060, and Sports Hybrid is $31,345, EX-L Hybrid $32,990, Sports-L Hybrid $33,325, and Touring Hybrid $37,340. Add in the gas savings and it’s below the price of all Honda Accord models. The Tesla Model 3 is also competitively priced compared to the popular Toyota Camry. Camry LE starts at $26,320, LE Hybrid $28, 655, SE $27,860, SE Hybrid $30,190, SE Hybrid Nightshade $31,190, XLE $31,070. XLE Hybrid $33,545, XSE $31,620, XSE Hybrid $34,095, TRD $33,385, XLE V6 $36,195, XSE V6 $36,745.
In 2022, Toyota sold 295,201 Camrys in the U.S. In the same year, Honda sold 154,612 Accords.
https://pressroom.toyota.com/toyota-motor-north-america-reports-year-end-2022-u-s-sales-results/
BMW has the i4 eDrive35 with 70.2 kWh battery, 281 HP/295 lb-ft torque 0-60 mph in 5.8s and a range of 256 miles has MSRP at $52,000. i4 eDrive 40 has 335 hp and 317 lb-flt torque and high capacity battery pack of 81 kWh drops the 0-60 mph to 5.5s with price increasing to $57,100 MSRP.
Model 3 Rear-Wheel Drive: $7,500
Model 3 Long Range: $7,500
Model 3 Performance: $7,500
Model Y All-Wheel Drive: $7,500
Model Y Long Range: $7,500
Model Y Performance: $7,500
The IRA tax credit has an income limit. Adjust gross income (AGI) requirements are as follows:
$300,000 for married couples filing jointly
$225,000 for heads of households
$150,000 for all other filers
In addition there is a max price limit. Software options such as Enhanced Autopilot or Full Self Driving are excluded from this limit. The price caps are as follows:
Full detail here: