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Only select few Teslas still qualify for the $7,500 federal EV incentive — here's which models made the cut

"There is no doubt in my mind that Tesla will lower the cost to stay competitive."

"There is no doubt in my mind that Tesla will lower the cost to stay competitive."

Photo Credit: Getty Images

Federal incentives for purchasing electric vehicles are changing in 2024, and Tesla has announced which of its vehicles will still be eligible for a $7,500 tax credit this year.

As reported by Electrek, the five remaining eligible Tesla models are the Model 3 Performance, the Model X Dual Motor, the Model Y Rear-Wheel Drive, the Model Y Long Range, and the Model Y Performance.

The change comes from a shift in American policy, which now stipulates that 50% of minerals for EV batteries be sourced from North America and 60% of battery components be assembled on the continent, which marks a tightening of the previous parameters to qualify for the incentive. 

The policy shift is intended to lessen the U.S.' dependency on other countries like China for battery production. As a result, the total number of eligible EV models has dropped from 43 to 19, according to federal data cited by Investopedia. 

There's one additional Tesla that makes the cut but with a catch: Since there's a price cap of $80,000 for SUVs and pickup trucks, the $79,990 Model X Dual Motors still qualifies, but only the base model — all other models are out of the price range, per Electrek.

It's also important to note that there are still limits on buyers' incomes to remain eligible for the tax credit: married couples filing jointly may make no more than $300,000 per year, heads of households may make no more than $225,000, and all other filers may make no more than $150,000.

Fortunately, the new Model 3 Highland is expected to help bring overall EV prices down.

Electrek commenters added important context to the discussion around the vehicles. 

"All variants of the Model 3 except for the RWD weren't supposed to receive the full tax credit last year either, but somehow Tesla announced that they did," one user noted. "If it's true that the RWD and LR versions of the Model 3 now lose the tax credit, then there is no doubt in my mind that Tesla will lower the cost to stay competitive. Dealerships that can take advantage of a point of sale credit is going to bring in a lot of business."

"All VW ID.4s seem to have fallen off the Treasury list of IRS Tax Credit eligible cars. One less competitor for Tesla," another user said.

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