Tesla has benefitted greatly in 2023 with the reintroduction of EV tax credits that consumers were able to take advantage of when purchasing a new Tesla Model 3 or Model Y. Event the Tesla Model X in base configuration now qualifies for the EV tax credit of up to $7,500.

As we close out 2023 and look at the start of 2024, new rules come into effect regarding the EV tax credits, as part of the Inflation Reduction Act of 2022. These new rules go into effect on January 1st, 2024, and they make qualifying for the tax credits even more difficult. These increased requirements on Battery Components and Critical Minerals will continue to become more difficult every year for the next 5 years.

Tesla has finally given some good guidance on their EV Tax credit qualification expectations for the new rules of 2024. In their latest update, the vehicles we thought would lose half of the credit are actually going to lose the entire credit. The Model 3 RWD or SR, and the Model 3 LR are both looking at a full removal of tax credit qualification for 2024.

On the flip side, Tesla started to hint that the Tesla Model Y may be at risk of losing some of the tax credit for 2024, but that has since disappeared and there is no mention of the Model Y being impacted, in any trim, for the full tax credit of $7,500 for 2024. Further more, the Tesla Model X will still receive the full tax credit, and even the Cybertruck is now listed as being qualified for the full tax credit also.

With these new rules, Tesla is only one automaker that is looking at impacts to their product offerings. Others like Ford and GM are also looking at impacts to their product lineup in qualification for the tax credits. These impacts are likely to continue to pressure automakers that want to sell EV's in the United States to focus their investments in North America.

With these updates, the real question is should I wait until 2024, or should I buy now before these new rules come into effect? Well, the answer really depends. For the Model 3, if you dont qualify for the existing credit, but will qualify next year, it makes sense to wait. If you do qualify for the tax credit this year, then you really need to ask yourself if you want the bigger discount in leu of the refresh Model 3, or commonly called Project Highland?

For the Model Y, it's a bit more simple. If you qualify for the existing tax credit, it may be worth taking advantage of the discounts Tesla is offering on inventory vehicles. If you dont qualify for the full tax credit today, then you should probably wait until January 1st. Even if you want these discounts and the tax credits, waiting until the end of Q1 2024 may be the happy medium to capture some of the inventory discount and the tax credit of $7,500.

Tesla Inventory Tracker: https://tesla-info.com


*NOT FINANCIAL ADVICE*