Tesla expects Model 3 and Model Y tax credits to decrease by 2024

Tesla vehicles are currently eligible for a $7,500 federal tax credit.

Tesla has warned customers that tax credits for the purchase of its Model 3 sedan and Model Y SUV are at risk of being reduced by 2024. The tax credits, introduced as part of a federal incentive program to promote the adoption of electric vehicles, are expected to gradually decrease as more EVs hit the market. In an email to customers, Tesla said that "federal tax credits are gradually phased out when a manufacturer sells more than 200,000 qualifying vehicles in the US. Tesla vehicles are currently eligible for a $7,500 federal tax credit. This is in the process of being phased out and is expected to be reduced to $1,875 by the end of the year."

The email went on to warn that "the timing and availability of any future tax credits are subject to change and could be impacted by a variety of factors, including legislation and IRS rules. "While many Tesla customers have taken advantage of the tax credits to reduce the cost of their vehicles, the incentive program has faced criticism from some quarters for being too generous to wealthy consumers. Nevertheless, the program has played a key role in making EVs more accessible to the general public and boosting the adoption of clean energy technologies.