Tesla Model 3 Performance Now a Bargain with 2024 Federal EV Tax Credit

The United States Treasury's amended guideline on the federal electric vehicle (EV) tax credit went into effect on January 1. With certain of Tesla's vehicles losing credit in 2024, one Model 3 configuration appears to be more enticing than ever.

Cheapest Tesla Model 3 With 2024 Tax Credit May Surprise You

As of January 1, the Tesla Model 3 Long Range (LR) and Rear-Wheel-Drive (RWD) versions are no longer qualified for the $7,500 tax credit. The Performance model, on the other hand, is still eligible and may be purchased for less than the Model 3 LR, as noted on the Model 3 order configurator at the time of writing, as per Teslarati.

The Performance Model 3 option has now become the second most economical configuration with the utilization of the tax credit, however, the RWD trim remains Tesla's cheapest car even without the federal incentive. The following are Tesla's current Model 3 prices, including the tax credit:

• Model 3 RWD: $38,990 (no longer eligible)

• Model 3 LR: $45,990 (no longer eligible)

• Model 3 Performance: $43,490 (after a $7,500 federal tax credit)

The Model 3 eligibility adjustment comes as the new "Highland" has started delivering in vehicle markets throughout the world, though it has yet to arrive in North America. However, sightings of the Model 3 Highland in the United States appear to signal that its launch in the United States is imminent, and some have speculated that Tesla may make a corresponding announcement this month.

Despite the fact that the Performance variation is the only one of Tesla's Model 3 trims that is currently qualified, many of the automaker's other vehicles are as well.

• Model X AWD: $72,490 (after a $7,500 federal tax credit)

• Model Y RWD: $36,490 (after a $7,500 federal tax credit)

• Model Y LR: $41,490 (after a $7,500 federal tax credit)

• Model Y Performance: $44,990 (after a $7,500 federal tax credit)

EV Tax Credits Capped by Price and Income, Cybertruck Misses Federal Incentive

According to the IRS website, the tax credit has a maximum MSRP of $80,000 for vans, SUVs, and pickups, and a maximum of $55,000 for other EVs. Furthermore, AGI cannot exceed $300,000 for married couples filing jointly, $225,000 for heads of households, or $150,000 for all other taxpayers.

In some states, purchasers can save even more money, such as Colorado, where new EV purchases are eligible for up to $5,000 in tax credits that can be combined with the federal benefit.

The Tesla Cybertruck is now ineligible for the federal incentive, and while the reason is unknown, it's worth noting that the Cyberbeast exceeds the IRA credit's MSRP price cap. Meanwhile, the Cybertruck AWD will take some time to arrive, while it is likely that this type will finally qualify.

Photo: Taun Stewart/Unsplash