Every Tesla Model Y Now Qualifies For The Full Federal EV Tax Credit

When the federal government first released its guidelines for the EV tax credit, many noticed a strange disparity.

Tesla's Model Y did not qualify for the tax credit unless it was ordered with the 7-seat option.

This came down to a weight and price discrepancy. Without 7 seats, the Model Y was too light for the $80,000 price cut-off and too expensive for the $55,000 price cut-off. With 7 seats, the car was more expensive but heavy enough to qualify for the $7,500 credit with its new $80,000 limit.

Tesla quickly responded by dramatically lowering prices, and this meant almost all Model Y trims would qualify for the tax credit. While the top trim Model Y Performance did not qualify, customers had to be careful adding options — adding even two options to the vehicle would make it too expensive to qualify for the credit.

But in a surprising move, the IRS has updated the guidelines for the tax credit, and as of now, every single Model Y variant will qualify for the full $7,500 tax credit.

https://t.co/vYem0aBhRg pic.twitter.com/qb9SW4iwVq

— Gary Black (@garyblack00) February 3, 2023

This also left room for Tesla to raise prices again. Whether the company would is unknown, but CEO Elon Musk had said demand for the Model Y greatly increased since the price reductions happened, already leading to a small increase in the price within days of the original price cut.

Photo: Courtesy of Tesla