Buying a new car is one of the most significant purchases you’ll likely make in your life, so you want to make sure you’re getting the best deal available. That’s why it’s no surprise that the high sticker price of many electric vehicles, particularly Tesla models, has long been one of the main deterrents for people looking to buy a new car, truck, or SUV.
It’s no secret that the average sticker price on an EV is a whopping 33% more than a comparable gas-powered vehicle, which can be a significant deterrent for many potential car buyers. However, in California, as gas prices have soared and EV technology has continued to improve, we’ve started to see larger fuel savings on the back end, greater accessibility to charging stations, and a jump in electric vehicle popularity.
Which brings us to Tesla. Tesla’s electric vehicles are by far the most popular EVs in the country. In California, the Tesla Model Y and Model 3 are the two best-selling cars of any kind in the whole state. Yet, despite record sales, they still seem out of reach for most Californians. Not anymore.
In this article, we’re going to show you how California residents can save over $15,000 on Tesla Model 3 and Model Y by taking advantage of available EV tax credits, rebates, and incentives.
Federal and State EV Incentives
Because the recent boost in EV popularity is great for reducing emissions, California has been introducing even more programs aimed at helping people purchase electric vehicles, investing in their ultimate goal of eliminating the sale of gas-powered vehicles in the state by 2035. Here’s an overview of some of the programs we’ll be exploring in this article:
|Tax credit, rebate, or program||Incentives total: up to $26,000|
|Federal EV Tax Credit||$7,500|
|California Clean Vehicle Rebate Project (CVRP)||$7,500|
|Clean Vehicle Assistance Program||$5,000|
|Clean Cars 4 All program||$9,500|
|Consumer Assistance Program (CAP)||$1,500|
Federal EV Tax Credits
The Inflation Reduction Act of 2022
The most recent federal EV tax credit was redefined in the Inflation Reduction Act of 2022. It states that “you may qualify for a tax credit up to $7,500 under IRS Code Section 30D if you buy a new, qualified plug-in EV or fuel cell electric vehicle (FCV)” anytime from 2023 to 2032. The code references a number of eligible vehicles, including the Tesla Model 3 and Tesla Model Y.
The EV tax credit outlined in the Inflation Reduction Act of 2022 is non-refundable, meaning it can only be applied to money you already owe in the tax year you purchase your vehicle. Any unused funds are not available as a refund or to be used on the following year’s taxes. There are also a variety of factors relating to vehicle usage and specifications, MSRP, household income, and manufacturing stipulations that may affect the amount you qualify for.
To claim your federal tax credit, simply file this form with your tax return along with your VIN, and you can take up to $7,500 off your tax bill.
California EV Incentives
Clean Vehicle Rebate Program (CVRP)
On the state level, California has a number of programs aimed at incentivizing EV purchases. The state’s most popular program, the Clean Vehicle Rebate Project (CVRP), offers rebates from $1,000 to $7,500 for the purchase or lease of eligible zero-emission vehicles, including electric (EV), plug-in hybrid electric (PHEV), and fuel cell vehicles (FCEV).
While Tesla Model 3 and Tesla Model Y orders placed between March 16, 2022, and January 11, 2023, do not meet CVRP vehicle eligibility requirements and are not included in the program, new Tesla price reductions have made it so Tesla orders placed on or after January 12, 2023, may be eligible for a CVRP rebate.
Applicants to the program are subject to eligibility requirements related to income, vehicle model, funding availability, and ownership retention. These factors will determine how much of the $7,500 rebate you qualify for.
California Clean Vehicle Assistance Program
The Clean Vehicle Assistance Program helps lower-income Californians access more favorable loans in order to purchase or lease clean vehicles—including plug-in hybrid and battery electric vehicles.
Qualified residents can receive grants of up to $5,000 in buy-down assistance and special financing, plus free vehicle charging and installation. Applicants must be California residents, meet income qualifications and minimum vehicle purchase requirements, and complete online financing and advanced technology training to qualify.
In addition, if you live in an eligible disadvantaged neighborhood in the San Francisco Bay Area or Sacramento, you may also qualify for additional financing assistance, including low-interest loans up to $20,000 for clean vehicle purchases.
To access one of these grants for a Tesla Model 3 or Model Y, you must be approved prior to purchasing the vehicle and comply with all program requirements. This grant is issued directly to the dealer to lower the overall cost of the purchase.
Clean Cars 4 All
The Clean Cars 4 All program helps lower-income residents invest in EVs by replacing their older, higher-polluting vehicles with cleaner ones.
Residents of the Bay Area, South Coast Area (including Los Angeles), San Joaquin Valley, and Sacramento area who meet income and vehicle eligibility requirements for their area can receive a rebate of up to $9,500 toward the purchase of a new or used plug-in hybrid electric (PHEV), battery electric (BEV), or fuel cell electric vehicle (FCEV).
So, if you have an old gas guzzler that qualifies under the program, the state of California will pay you to swap it for a new Tesla Model Y or Model 3.
The Consumer Assistance Program (CAP)
California residents meeting income eligibility requirements can receive up to $1,500 to retire their vehicle; those who exceed the income cap may still receive up to $1,000. Note that Californians may not qualify for more than one vehicle retirement program, so consider the qualifications for each to determine the maximum rebate for your situation.
EV Climate Loan: Getting the Most Out of Your EV Incentives
Traditional auto lenders don’t believe EVs should be financed differently than gas-powered cars, but here at EV Life, we do.
Instead of waiting 6-18 months to get your tax credits and rebates back, our EV Climate Loan enables you to take advantage of your qualified EV tax credits and rebates upfront, lowering your loan payments by up to $200/month.
How our EV Climate Loan works:
- Pre-qualify in minutes.
Pick your Tesla and pre-qualify for all your tax credits and rebates based on personalized qualifications specific to you.
- Finance your Tesla for less.
Instead of waiting 6-18 months to benefit from EV incentives, applying for an EV Climate Loan enables you to take advantage of your tax credits and rebates instantly upfront to dramatically lower your payments.
- Drive big savings anywhere.
You can use your EV Climate Loan to purchase your new Tesla online or at nearly any dealership, ensuring you get the price and features you want.
- Apply incentives more easily.
Once you drive off the lot in your new Tesla, EV Life helps you automate the tax credit and rebate filing process through our website–making it easier to repay the deferred incentives in your loan.
If you’re in the market for a new Tesla, don’t let the sticker price deter you. Let EV Life help you take advantage of every tax credit, rebate, and incentive available to you.
Ready to see how much you could save? Pre-Qualify Now