Teslas are by far the most popular electric vehicles in the industry today, controlling over 60% of the EV market. But despite their popularity, the company still needs to make pricing modifications in response to market changes to remain competitive. Recently, Tesla has been adjusting the pricing for many of its vehicles, with some models changing four times in just the last month. With so many price cuts and bumps, it can be hard to keep up.

The reason for the price changes is due to several factors, including shifts in demand and changes to federal rules regarding which electric vehicles qualify for tax credits. In January, the manufacturer announced price cuts to its lower-cost EVs, ranging from $3,000 to $13,000, up to 20% off the sticker price, depending on the model. Then, in February, Tesla announced slight increases to its Model Y Long Range and Model Y Performance pricing, raising the cost by 2% and 2.7%, respectively, in response to an increase in demand.

Most of these price changes are directly related to new rules introduced in the Inflation Reduction Act of 2022, which updated EV tax credits to include electric pickup trucks, SUVs, and vans with sticker prices up to $80,000 and new electric cars, sedans, and wagons priced up to $55,000. Qualifying for the tax credit depends on several factors, including the vehicle’s MSRP, its final assembly location, the sourcing location of the battery components and critical minerals used by automakers, and your modified adjusted gross income (AGI). With their new price tags, the Model Y and Model 3 now qualify for the federal EV tax credit, except for the Tesla Model 3 Standard Range, which had its tax credit lowered to $3,750 on April 18, 2023, due to battery component sourcing. 

Model	Current Price	Federal tax credit	Clean Vehicle Rebate Project	Clean Vehicle Assistance Program
Model Y	$52,990	$7,500	$7,500	$7,500
Model 3	$41,990	$3,750	$7,500	$7,500
Model S	$87,490	N/A	N/A	N/A
Model X	$97,490	N/A	N/A	N/A

Tesla EV Incentives by Model

Each federal and state EV incentive has its own complex set of requirements that vary for each program, vehicle model, and driver. And with all the new updates to EV incentive guidelines and vehicle pricing changes, it can be difficult to know how much you might be eligible to save on your EV purchase through existing tax credits, grants, rebates, and other programs, especially if you’re in the market for a Tesla.

That’s why EV Life has put together this guide for prospective Tesla buyers to help clarify which programs certain models are eligible for, so you can maximize your savings. In addition to the federal EV tax credit, we’ll examine the various state rebates and grants available to California drivers who qualify. We’ll also show you how to take immediate advantage and get the most financing potential out of your tax credits and rebates by pre-qualifying for an EV Climate Loan through EV Life.  

Tesla Model Y

Launched in 2019, the Model Y serves as a middle ground between the Model 3 and the Model X. The compact SUV seats five and is a great option for drivers looking for a lower-priced alternative to the Model X.

Current price: $52,990

Range: 283 miles

Recent price changes:

Model	Old price	New price	Difference
Model Y	$65,990	$52,990	-$13,000

Vehicle eligibility

Federal tax credit ($7,500): Yes

California electric vehicle incentives

Clean Vehicle Rebate Project ($7,500): Yes

Clean Vehicle Assistance Program ($7,500): Yes*

Tesla Model 3

Released in 2016 as an affordable option to the Model S, the four-door Model 3 sedan has since dropped further in price, becoming Tesla’s most affordable option to date and also their best-selling model.

Current starting price: $41,990

Range: 272 miles

Recent price changes:

Model	Old price	New price	Difference
Model 3	$46,990	$41,990	-$5,000

Vehicle eligibility

Federal tax credit ($3,750): Yes*

*Tesla Model 3 Standard Range is only eligible for half of the tax credit due to non-locally sourced components used in its battery.  

California electric vehicle incentives

Clean Vehicle Rebate Project ($7,500): Yes

Clean Vehicle Assistance Program ($7,500): Yes*

Tesla Model S

Originally launched in 2012, the Tesla Model S is a luxury vehicle with a lot of power under the hood. The latest Model S is all-wheel-drive, and its newest version, the Plaid, boasts tri-motor propulsion that can achieve 0-60 acceleration in under two seconds. Because of its higher price tag, no versions of the Model S EVs currently qualify for the federal electric vehicle tax credit, which has a limit of $55,000 for electric cars, sedans, and wagons. The Model S comes with three years of free Supercharging.

Current starting price: $87,490

Range: 405 miles

Recent price changes:

Model	Old price	New price	Difference
Model S	$96,990	$87,490	-$9,500

Vehicle eligibility

Federal tax credit ($7,500): N/A

California electric vehicle incentives

Clean Vehicle Rebate Project ($7,500): N/A

Clean Vehicle Assistance Program ($7,500): N/A

Tesla Model X

Released in 2015, the Model X is Tesla’s most spacious offering, with versions of the Model X capable of seating up to seven people. These futuristic-looking SUVs feature DeLorean-style falcon wing rear doors, touchscreen navigation, and multiple seating configurations available. The Model X comes with three years of free Supercharging.

Current price: $109,990

Range: 351 miles

Recent price changes:

Model	Old price	New price	Difference
Model X	$109,990	$97,490	-$12,500

Vehicle eligibility

Federal tax credit ($7,500): N/A

California electric vehicle incentives

Clean Vehicle Rebate Project ($7,500): N/A

Clean Vehicle Assistance Program ($7,500): N/A

Finance Your Tesla with EV Life

If you’re a California driver in the market to purchase a new Tesla or other EV, PHEV (Plug-In Hybrid Electric Vehicle), or FCV (Fuel Cell Vehicle), there are a number of federal and state programs available to help offset the purchase price. In addition to the federal EV tax credit, the Clean Vehicle Rebate Project, and the Clean Vehicle Assistance Program, there are also a variety of other programs that can help you save money on your new EV.

There are state incentive programs that offer you money to retire your older, gas-powered vehicles, grants and rebates to cover the cost of home EV charger stations and installation, as well as a number of local EV incentives for lower-income households that include free charging locations, clean vehicle credits, carpool and express lane decals, toll discounts, and more.

The only problem? Each one of these programs has its own complicated set of vehicle and driver eligibility requirements, which can make it difficult to figure out whether you and your preferred EV qualify. And you won’t get much help from dealerships and traditional auto lenders, who aren’t willing to risk helping you sort through the fine print on government websites or factoring your potential rebates into your loan. Instead, you end up sorting through page after page of complex legalese before you can even apply, then waiting 6-18 months before you see any of the money.

EV Life eliminates this complicated process and helps you use your tax credits, rebates, and incentives to finance your EV purchase immediately. Here’s how the EV Climate Loan works, step-by-step:

1.  Find your savings. EV Life will help you comb through each federal, state, and local program for which you might qualify so you don’t miss out on a single dollar you’re eligible for.

2.  Apply your savings. EV will prequalify you in minutes for your incentives, then set you up for an EV Climate Loan to finance the purchase of your new Tesla, using your anticipated EV rebates and credit as an incremental down payment, reducing your loan payments by as much as $200 per month and saving you an average of $10,000 on your purchase.

3.  Take your saving anywhere. EV Life’s EV Climate Loan can be used just about anywhere, so you can shop around to make sure you get the exact model and features you want.

Want to see how much you could save on your Tesla?

Pre-Qualify Now