The Tesla Model 3 Long Range qualifies for the full Federal EV credit in the United States. Now, the car Elon Musk calls “amazing” is more affordable for consumers.
The base price for the Model 3 Long Range has a starting price of $47,490. The full $7,500 Federal EV credit drops that price to $39,990.
According to the Tesla car builder, the company actually lists the starting price as $34,990, accounting for an estimated five-year gas savings of $5,000
“The new Model 3 Long Range is an amazing car,” Tesla founder Elon Musk posted on X, the platform formerly known as Twitter, in response to the news.
What exactly is the Federal EV credit and why does the Model 3 Long Range qualify?
The Inflation Reduction Act of 2022 made it possible for certain buyers to qualify for a $7,500 credit on new “clean” vehicles purchased after Jan. 1, 2023.
According to the IRS, there are multiple qualifications these buyers and vehicles must meet to be eligible for the full EV credit. For example, buyers must use the EVs primarily in the United States. The vehicle must be for their own use and not for resale.
The buyers must also be below the modified adjusted gross income (AGI). The AGI for a married couple filing taxes jointly or a surviving spouse must be below $300,000. The heads of households must have an AGI below $225,000. The AGI for all other filers must be below $150,000.
The Federal EV credit for the vehicle starts at $2,500. The credit increases with certain milestones.
- Plus $417 for a vehicle with at least 7 kilowatt hours of battery capacity
- Plus $417 for each kilowatt hour of battery capacity beyond 5 kilowatt hours
The IRS says that “in general, the minimum credit will be $3,751 ($2,500 + 3 times $417)” for a vehicle with a minimum 7 kilowatt hours of battery capacity.