The Tesla Model 3 just became less expensive than a Toyota Camry in California thanks to the company’s confirmation that each of the all-electric sedan’s trim levels qualifies for the full $7,500 federal tax credit.
In early June, Tesla changed the language on its Model 3 Design Studio to reflect updated tax credit qualifications, indicating all three configurations of the sedan qualified for the full tax credit amount.
Previously, only one variant, the Performance trim, qualified, while the other two builds were only set to receive half, of $3,750, of the total credit.
The updated credit amount, when combined with local incentive amounts in some regions, like California, are helping Tesla vehicles reach price parity with gas cars. In some instances, they’re even undercutting the cost of some of the most popular sedans on the market in California, like the Toyota Camry.
Reutersreported June 6 the FuelEconomy.gov website officially updated its website to reflect the new Model 3 tax credit qualifications, enabled by the use of domestic battery packs in the vehicles. Previously, the lower two configurations of the Model 3 used batteries built in China.
When the Model 3’s Rear-Wheel-Drive trim level is purchased at its sticker price of $40,240, the $7,500 federal tax credit and the $7,500 California tax rebate brings down the price to $25,240, which undercuts the cost of the Camry, listed at $26,320 in its entry-level configuration.
While other automakers are saying price parity won’t come until the end of the decade, Tesla has seemingly already reached it with certain trim levels.
The Model 3 receiving the full tax credit across the board is not only a huge disadvantage to competing EV makers, but also to the big gas companies that have yet to source their vehicles completely from domestic regions that can’t offer comparable prices due to lack of scalability.
Abby Andrews