The starting price of a Tesla Model 3 — after federal tax credits — could once again be below the legendary $35,000 mark. Tesla’s website now claims each new Model 3 is eligible for the full $7,500 federal tax credit in the United States, after those credits were cut in half earlier on April 18 for the entry-level Standard Range and Long Range RWD models.
Here in California, a short distance from Tesla’s Fremont factory, I’d pay $41,630 before tax – but only $32,130 after federal and state incentives, assuming Tesla is right that its cars now qualify for the full federal credit. It can cost less than $30,000 depending on your state’s incentives.
Screenshot of Sean Hollister / The Verge
The reason some cars dropped out of qualification is because their batteries didn’t meet procurement requirements, that specify that 40 percent of their minerals must be “extracted or processed in the United States or a U.S. free trade agreement partner” and that 50 percent of their components must be “manufactured or assembled in North America.”
Those percentages are rising every year — by 2027, 80 percent of battery minerals and components must meet those requirements for vehicles to qualify for the credit.
Not every car or family also qualifies for the $7,500 tax credit: You have to be under a certain income and you can’t put too many accessories on a Tesla or it will hit a price cap.