The Tesla Model 3’s starting price — after federal tax credits — could once again be below the legendary $35,000 mark. Tesla’s website now claims everyone the new Model 3 qualifies for the full $7,500 federal tax credit in the United States after those credits were previously halved on April 18 for the base Standard Range and Long Range RWD models.
Here in California, a short distance from Tesla’s Fremont factory, I’d pay $41,630 before taxes — but only $32,130 after federal and state incentives, assuming Tesla is right that its cars already qualify for the full federal credit. It can cost as little as $30,000 depending on your state’s incentives.
Screenshot by Sean Hollister/The Verge
The reason some cars stop qualifying is because their batteries don’t meet sourcing requirements, which specify that 40 percent of their minerals must be “mined or processed in the United States or a free trade agreement partner of the United States.” , and 50 percent of their components must be “manufactured or assembled in North America.”
These percentages increase each year – until 2027, 80 percent of the minerals and battery components must meet these requirements for vehicles to qualify for the credit.
Not every car or family will qualify for the $7,500 tax credit, either: you’ll have to be under a certain income, and you can’t put too many accessories on a Tesla or it’ll hit a price cap.