Tag: federal tax credit

  • Tesla Confirms $7,500 EV Tax Credit Valid for September 30 Orders

    Tesla Confirms $7,500 EV Tax Credit Valid for September 30 Orders

    Key Takeaways

    1. The US federal tax credit for electric vehicles is ending on September 30, prompting Tesla to encourage customers to order before the deadline.
    2. Tesla’s website now prominently displays “Order by September 30 to Qualify” to inform potential buyers about the tax credit timeline.
    3. The IRS has confirmed that orders placed on September 30 can still qualify for the tax credit, even if delivery happens later.
    4. Customers can make a down payment or trade-in to show commitment and secure the tax incentive.
    5. The updated ordering process allows buyers to customize their vehicles while managing Tesla’s inventory more effectively.

    It’s already known that the US federal tax credit is set to end on September 30. In response, Tesla is making an effort to encourage as many customers as they can to utilize the incentive before time runs out. They have refreshed their US website with clear information regarding orders made on the final day of the program.

    Update on Tesla’s Website

    On the homepage, Tesla’s site now shows “Order by September 30 to Qualify” alongside the federal tax credit promotion. This is meant to provide peace of mind for potential buyers who might be confused about what the end date of the program entails.

    IRS Guidance Confirmation

    This update is in line with the most recent instructions from the Internal Revenue Service (IRS). The agency clarified that electric vehicle orders made on September 30 are eligible for the credit, even if delivery doesn’t occur until later. All that customers need to do is show commitment, which could be through a down payment or a trade-in.

    Flexibility for Buyers

    The ability to secure and pay in full weeks or even months ahead gives purchasers some leeway. They can personalize their vehicle and wait for it to be built in the factory instead of hurrying to select from the available inventory.

    This setup helps Tesla manage its stock more efficiently and also aims to increase sales during the final quarter of 2025.

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  • Tesla Model 3 Performance Lease: Free Colors & Tax Credit White Interior

    Tesla Model 3 Performance Lease: Free Colors & Tax Credit White Interior

    Key Takeaways

    1. Tesla is maximizing car sales with promotions and incentives before the federal tax credit expires.
    2. A new lease offer for the Model 3 Performance trim is introduced, keeping it under the $55,000 limit to qualify for the full $7,500 federal tax credit.
    3. Tesla offers zero interest financing on the Model 3 with FSD purchase and a free Supercharging promo for the first 18 months.
    4. The $699 monthly lease for the Model 3 Performance offers good value compared to the average car lease in the US, which is $745.
    5. The Model 3 Performance’s speed and pricing make it a competitive choice against other sports sedans, potentially boosting Tesla’s sales before the tax credit deadline.

    Tesla has clearly gone all out with promotions and incentives to maximize car sales before the federal tax credit expires at the end of the quarter.

    New Lease Deal Introduced

    It seems they are not finished yet, as they have introduced a lease offer for the powerful Model 3 Performance trim, which can accelerate as fast as vehicles that cost three times more. To keep the Model 3 Performance below the $55,000 price limit—allowing the popular white interior trim to qualify for the full $7,500 federal tax credit—Tesla is now providing any color at no extra cost, including the Ultra Red, which typically costs $2,000.

    Financing Offers and Promotions

    In addition to this, Tesla continues to offer zero interest financing on the Model 3 with FSD purchase, alongside a free Supercharging promo available for the first 18 months of ownership. Since most Tesla owners choose to lease, the company has just announced a Model 3 Performance lease that requires $3,000 down and then $699 per month, which includes the federal tax credit, even if you select the popular Ultra Red paint with the white interior.

    Value of the Performance Trim

    Although a $700 lease might not sound like a bargain, it is a good deal for the Performance variant that can sprint from 0-60 mph in just 2.9 seconds. Considering that the average monthly car lease in the US is currently $745, enthusiasts of sports sedans will definitely receive more value for their investment compared to the average vehicle.

    With this new lease and color offer, Tesla continues to expand its already remarkable range of promotions, with the Model 3 being the focus of nearly every incentive type the sales team has ever created.

    Despite the monthly lease payment seeming high at first glance, the Model 3 Performance remains a top choice for affordable sports sedans.

    The recently announced Hyundai Ioniq 6 N competitor, for example, is slower and carries a higher price tag, suggesting that Tesla might experience a boost in sales before the tax credit ends on September 30, 2025.

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  • Tesla Model Y Price Increase Due to Loss of Federal Tax Credit

    Tesla Model Y Price Increase Due to Loss of Federal Tax Credit

    Key Takeaways

    1. Federal Tax Credit Changes: Proposed legislation may eliminate federal tax credits for electric vehicles starting in 2026, affecting both new and used EV buyers.

    2. Tesla’s Ineligibility: Tesla will not qualify for future federal subsidies due to its high sales volume, impacting pricing and demand for the Model Y.

    3. Increased Costs for Buyers: The removal of tax credits could lead to significant increases in monthly payments for Model Y buyers, with estimates of over $100 to $150 more per month.

    4. Impact on Demand: Without federal tax credits, Tesla may face challenges in maintaining demand for its vehicles, including the Model Y and Cybertruck.

    5. Musk’s Outlook: Elon Musk believes the loss of tax incentives may favor Tesla long-term, but current declines in demand could test this view.

    Tesla might see a surge in Model Y sales later this year, as the options to use federal tax credits for down payments or to lower leasing costs could be ending in 2026.

    Changes in Tax Credits

    The Republican “One Big, Beautiful Bill” tax proposal aims to eliminate the clean energy credits and tax incentives that were part of the Biden administration’s Inflation Reduction Act. This new GOP legislation would reduce some of the tax cuts from Trump’s first term, but it would also cut the federal tax credit for both new and used electric vehicles.

    Starting in 2026, there will be no $4,000 discounts available for used electric cars, and the $7,500 tax credit for new EV buyers will only apply to manufacturers that have sold fewer than 200,000 vehicles to date.

    Tesla’s Situation

    Tesla will not be eligible for the 2026 federal subsidy, given that it is currently the second-largest EV producer globally, just behind BYD, and sells more vehicles than any other electric car maker in the US. So, from January 1, 2026, the new Model Y will not qualify for the $7,500 federal tax credit that it currently benefits from.

    Furthermore, the government plans to remove the $7,500 tax credit for commercial electric vehicles to help fund the extension of the 2017 tax cuts. This change could significantly affect Model Y buyers, as most electric vehicles in the US are leased. If the bill passes, automakers and dealers will need to charge the full MSRP after December 31 instead of passing the commercial EV tax credit to the buyer.

    Pricing Impact

    Currently priced at $44,990 for the base model, this change could lead to over a $100 increase in the monthly payment for the RWD Model Y. The difference in monthly payments for the Model Y AWD, which currently has an attractive APR financing deal, is expected to be around $150 more.

    As a result, Tesla may struggle with demand since none of its vehicles will be eligible for the federal tax credit in the coming year. Even the Cybertruck, which has sales lower than the 200,000 unit limit right now, will not qualify because the bill considers the manufacturer’s total sales.

    The government has been spending around $200 million each month to subsidize the price of the Tesla Model Y and other electric vehicles from different manufacturers, but these subsidies may be ending in 2026.

    Musk’s Response

    Back in November, Elon Musk downplayed the potential loss of EV tax incentives, suggesting it wouldn’t heavily impact Tesla. He remarked, “I guess that there would be some impact, but I think it would be devastating for our competitors.” Musk also mentioned that “long term, this probably actually helps Tesla,” but with the current decline in demand for Tesla vehicles, this assertion may soon be tested.

    To cope with the removal of the federal tax credit, Tesla might need to reduce prices, introduce new models like a rumored cheaper and smaller Model Y, or brace for the expected drop in demand due to the early elimination of these tax credits.

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