Tesla Model 3 Gains New Discounts, Updated Tax Credit Eligibility

Tesla Model 3 Gains New Discounts, Updated Tax Credit Eligibility

With the aid of federal tax credits, prices on many of Tesla’s vehicles have been on a downward trend since the start of the year, making them some of the market’s most affordable electric vehicles available. Although some Model 3 units weren’t previously eligible for the full incentive under new tax credit requirements, Tesla’s website now states that all of the sedan’s offerings can reap the entire $7,500 benefit.

Above: A Tesla Model 3 (Image: Casey Murphy / EVANNEX).

Tesla is also offering increased discounts on Model 3 units in its inventory, bringing some prices down to nearly $30,000 when adding the updated tax credit, as Forbes points out. Although updated requirements from the IRS shared in April brought the credit down to $3,750 for some Model 3 trims, Tesla’s website now states that all of the sedan’s offerings are eligible for the full credit.

At the time of writing, new Model 3 units with rear-wheel drive can be found in Tesla’s inventory catalog for as low as $37,830 in most U.S. locations, discounted from the new production price of $40,240. When factoring in the $7,500 tax credit, the price of these inventory Model 3 units comes down to just $30,330. Certain states also offer additional rebates of up to $5,000, dropping that price even lower.

Some have speculated that Tesla is discounting its Model 3 in an attempt to liquidate inventory before releasing the refreshed “Highland” Model 3. Many also thought that Tesla would be announcing the refreshed Model 3 during CEO Elon Musk’s recent trip to China, though the automaker has yet to announce anything specific about the vehicle.

Still, at last month’s Tesla Shareholder Meeting, Musk showed the silhouette of a sedan and referred to a “new product” that would be coming soon. Additionally, the “Highland” Model 3 project has been rumored and reported for months, and it's expected to simplify the Model 3’s interior and exterior design and components.

Tesla has also announced plans to produce an affordable mass-market EV at an upcoming Gigafactory in Mexico. Musk recently discussed decreasing costs on raw materials and components, even detailing a less-expensive drive unit for its next generation of EVs. The drive unit is set to unlock decreased battery cell costs, along with the added benefits of foregoing rare earth metals. Instead, Musk explained, the next-gen drive unit will use a permanent magnet motor.

Whether or not Tesla is clearing out Model 3 inventory for the “Highland” refresh is still unclear. Others suggest that Tesla could simply be trying to get rid of excess inventory or the automaker could be testing demand at the lower price points, as Forbes notes. Either way, the discount may mark a good opportunity for prospective buyers looking to get a Model 3 at a low price.


Sources: Forbes / Tesla