Here Are The Latest Tesla EV Prices Now That Model 3 Long Range Qualifies For $7,500 Tax Credit

EV giant Tesla Inc TSLA on Monday said that the company’s Model 3 Long Range variant now qualifies for a federal tax credit of $7,500, making it merely $1,000 costlier than the cheapest variant of the vehicle for eligible customers.

What Happened: Both the Long Range variant of the Model 3 as well as its Performance version are now eligible for a federal EV tax credit of $7,500. The cheapest rear-wheel drive Model 3, however, is ineligible for any tax credit and starts at $38,990.

Model 3 VariantsStarting Price Before Tax CreditStarting Price After Tax Credit
Rear-Wheel Drive$38,990$38,990
Long Range All-Wheel Drive$47,490$39,990
Performance All-Wheel Drive$54,990$47,490
Source: Tesla

Until recently, neither of the lower-priced versions of the Model 3 qualified for a federal EV tax credit. The Performance variant, however, qualified, making both the Long Range and Performance variants similarly priced at the end for an eligible customer.

All versions of Tesla’s best-selling Model Y SUV as well as the Long Range variant of its more premium Model X are also eligible for a tax credit of $7,500. As a result, the rear-wheel drive version of the Model Y is cheaper than the corresponding Model 3, starting at $37,490 after tax credit.

Model Y VariantsStarting Price Before Tax CreditStarting Price After Tax Credit
Long Range Rear-Wheel Drive$44,990$37,490
Long Range All-Wheel Drive$47,990$40,490
Performance All-Wheel Drive$51,490$43,990
Source: Tesla

Why It Matters: Electric vehicles have an average starting price much above combustion engine vehicles owing to the higher cost of parts and manufacturing. Though the ongoing price war started by Tesla in early 2023 has helped bring down the purchase price of EVs significantly, it is still higher than its gas counterparts. The federal tax credit helps bring down the final purchase price for the end customer, thereby improving EV adoption.

Several American EV makers are currently looking to manufacture cheaper EVs to expand their addressable market amid dwindling demand, including Ford Motor Co., Rivian Automotive Inc., and Lucid Motors. Tesla itself said during the company’s first-quarter earnings in April that it would introduce new models including more affordable models by early 2025.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

Read More: Elon Musk’s Starlink Hardware Hits The Shelves At Walmart, Target, Home Depot, And Best Buy

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