Tesla Model 3 Long Range: Now With a $7,500 Tax Credit and a Jaw-Dropping $40,000 Starting Price

There's big news in the electric vehicle world—Tesla's Model 3 Long Range is now officially eligible for a $7,500 federal tax credit, making this game-changing EV more affordable than ever.

In a landscape where new regulations on battery materials and sourcing are often causing confusion and limiting eligibility for tax credits, it's welcome news that the Model 3 Long Range now makes the cut. This change is expected to ripple through the market, pushing more buyers toward Tesla's already popular Model 3 lineup.

With the addition of the federal tax credit, the price of the Tesla Model 3 Long Range drops to an enticing $40,000. This is only $1,000 more than the Model 3 Rear-Wheel Drive, which unfortunately misses out on the tax break due to its use of LFP battery cells sourced from China. It's a minor bump in price for a major upgrade in range and performance.

The eligibility for the tax credit seems to have emerged from a strategic change—Tesla is likely now using batteries that meet federal guidelines. This move makes the already appealing Model 3 Long Range even more attractive to prospective buyers, especially those who might have been hesitant due to the upfront cost.

Why the Tax Credit Matters

For many, the federal tax credit can be a deciding factor in the purchase of an electric vehicle. With restrictions and requirements shifting, Tesla's Model 3 Long Range becoming eligible marks a significant milestone. These credits are designed to make EVs more accessible and to encourage the shift away from fossil fuels, aligning perfectly with Tesla's mission.

It's worth noting that to benefit from the full $7,500 tax credit, buyers must meet certain income criteria. Single filers need to have a yearly income of under $150,000, while joint filers need to keep it under $300,000. Those meeting these limits can now acquire a high-quality electric vehicle at a price point competitive with lower-end gasoline vehicles.

Electrek’s Take: A Boost for Tesla

$40,000 for a Model 3 Long Range isn't just a good deal—it's a potentially market-changing offer. With the average new car selling for approximately $47,000 in the U.S., the reduced cost of the Model 3 Long Range could drive a significant upturn in Tesla's sales. Especially interesting is how this might affect the competition, pushing other automakers to find ways to make their electric vehicles eligible for similar incentives.

Tesla has faced some tough competition lately, particularly from their own lineup. The Model 3's sales have been slightly overshadowed by the rapidly rising Model Y. Yet, this new pricing strategy, boosted by the tax credit, could swing the pendulum back in favor of the Model 3.

Overall, this adjustment is poised to help Tesla further solidify its foothold in a rapidly expanding market. If you're in the market for an electric vehicle or simply considering your options, the newly eligible Model 3 Long Range should be at the top of your list.

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