[Last Chance For Model 3 $7,500 Tax Credit] Tesla Massively Slashes Price Of Model X, Making It Eligible For Federal Tax Credit And More!

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Update, 12/13: Tesla is now saying that based on current guidance, the federal tax credit for Model 3 RWD and Model 3 Long Range will be eliminated on 1/1. Of course that guidance is always subject to change…

Update, 12/5: Tesla announced that the federal tax credit for Model 3 RWD and Model 3 Long Range will be reduced from $7,500 to $3,750 on 1/1. The pricing chart below has been updated. Tesla is also offering 3 months free full self driving on all cars and 6 months free supercharging on Model 3 and Model Y via a referral link, though the purchase price is no longer discounted via a referral.

Originally posted on 9/1/23:

Massive Price Cuts:

As Tesla looks to close out Q3 with strong numbers, they have massively slashed the cost of their premium Model S sedan and Model X SUV, with cuts of $18,500 for most trims. The Model X Plaid is now a shocking $50,000 less than it cost just last year!

Additionally, the Model X cut to $79,990 means it now qualifies for the $7,500 EV tax credit! That will knock the price down to $72,490 for eligible buyers.

Stackable Referral Savings:

Plus, Tesla is offering a $1,000 discount on Model S and X and 3 months of free Full Self Driving via my referral link here. That will drop the Model X to $71,490 for eligible buyers.

There is also a $500 discount on Model 3 and Y and 3 months of free Full Self Driving via my referral link here.

I’d highly recommend requesting a demo drive to try out any model for yourself!

Inventory Discounts and Leasing Deals:

You can also search for inventory cars, which have increased savings available that vary based on location, but can make for some incredible bargains.

There are also some great lease deals available on made to order and inventory Teslas, check online and speak to your local dealership for more details on those. Note that while leases don’t qualify for the $7,500 tax credit, those discounts are often reflected in lower lease costs as the credit is available for the lessor to claim.

Free Color Selection:

Tesla is no longer charging for premium color selections for Model S or X, a savings of $2,000-$3,000. For Model 3 and Y, those still cost $1,000-$2,000.

FSD Price Drop and Free Transfers:

Tesla has also lowered the cost of Full Self Driving (FSD) from $15,000 to $12,000. Enhanced Autopilot (EAP), which is the sweet spot in my opinion, remains $6,000.

Tesla is also offering upgraders the ability to transfer their Full Self Driving software from older Teslas to new cars delivered by 9/30.

Phase-out of $7,500 Credit:

The $7,500 credit applies to sedans under $55,000 and SUVs under $80,000. Tesla says that the credits will likely be at least partially phased out for deliveries after 2023 due to stricter requirements that they won’t be able to meet.

$7,500 Non-Refundbale Tax Credit Details:

The tax credit applies in full if you have AGI in the current year or the previous year up to $300,000 for married couples filing jointly, $225,000 for heads of households, or $150,000 for all other filers. As long as your AGI is lower than those numbers in either year, you will qualify for the credit. The credit is non-refundable, so it can’t exceed your federal taxes owed for the year, but it will apply and you will receive a refund if your taxes are automatically withheld by your employer. An FAQ is available here.

Speak to a financial professional for more details about how the tax credit may affect you.

$7,500 Tax Credit For Businesses:

It’s worth noting that if you’re buying a car for business purposes, there is an alternate $7,500 commercial EV credit, that has no income limitations and will be valid on all Tesla models as it has no cost limit either. Speak to a financial professional for more details.

2023 Bonus Depreciation For Businesses:

And if you buy a Model X for business purposes, you may be able to take a first year section 179 20% depreciation, as well as a first year 80% bonus depreciation for cars weighing over 6,000 pounds that are delivered by 12/31/23. That can mean massive tax savings based on your marginal federal and local tax rate. Speak to a financial professional for more details.

State Incentives

Many states also offer incentives for buying an EV.

The most lucrative version is in NJ, where buyers pay no sales tax on EVs and can receive an instant rebate of $4,000 for cars with an MSRP of up to $45,000 or a $1,500 instant rebate for cars with an MSRP from $45,001-$55,000. NJ also has charging installation rebates.

The NJ rebates will even apply as a down payment towards a lease!

NY offers a $2,000 EV rebate and HOV lane stickers.

Colorado offers a $5,000 tax credit for EVs up to $80,000.

See more state incentives here.

5 Years With My Tesla Model 3

I’ve written several articles on Tesla after ordering a Model 3 back in July 2018.

Shortly after I got the car, Tesla accidentally handed over full control over their forums to me, which made national news headlines.

I wrote about my thoughts on the car after 2 years here.

After 5 years, I’m still thrilled with my Model 3 Long Range with acceleration boost, and love the software updates that improve the car as time goes on. There was one software update in that time period that made things worse by requiring more clicks, but that was since rectified.

The car is truly fun to drive on both short-haul and long-haul trips. And I love never having to do an oil change or go to a gas station!

Best of all, I never lose my keys as everything is controlled with your phone. The car automatically locks when you walk away from it and unlocks when you approach it. You can preheat or precool it all via the app.

When you’re stopped at a red light you don’t have to hold the brake and when the light turns green, the car can chime to let you know.

Thanks to 3rd party apps like TeslaFi, you can even prove your speed history to help you get out of a ticket!

If you are buying a Tesla, it’s worth noting that Tesla includes autopilot for free on all cars. I’d recommend getting the Enhanced Autopilot (EAP) for $6,000, which among many features, allows for auto lane changes on highways, which is what makes long-haul driving such a pleasure in a Tesla. I’d recommend against spending $12,000 for full self driving (FSD), which is very much still a beta product that isn’t currently worth the extra $6,000 in my opinion. You can always upgrade to FSD later on, should the product improve.

EAP also turns your car into a remote control car with smart summon. I’ve used that to get into my car by backing it up when someone parks too close to me, or to pick me up from the front door of shul when it’s raining.

Thanks to autopilot and EAP, long-haul driving no longer leaves me feeling fatigued at all!

Tesla Vision: The Bizarre Removal Of Ultrasonic Sensors And Radar

All that being said, I’d be remiss not to note that as of earlier this year, Tesla has removed ultrasonic sensors and radar for all of their new cars being sold, instead relying on cameras for Tesla Vision.

I recently test drove a Model X with Tesla Vision, and it’s noticeably worse in many ways than previous Teslas with those sensors. It can’t do many of the EAP/FSD features like Smart Summon and Autopark and it even struggles with measuring parking obstacle distances. Tesla says they’re working on fixing that, but it seems they may struggle with that, as they struggled to get the windshield wipers to work properly when they switched from a rain sensor to a Vision based system.

I drove in a friend’s new Model Y with FSD beta and Tesla vision earlier this week and it’s significantly worse than my FSD beta with ultrasonic sensors and radar.

I also disliked the new push button turn signal on the steering wheel and the lack of a gear selector. I despised the yoke, though now you can select a wheel now instead of a yoke.

In general, I found that the Model X’s drive felt much less sporty than the Model 3, with poorer handling around corners.

The falcon wing doors are very cool, but those doors and the trunk wouldn’t open all the way in the garage despite there being enough clearance. I tried to override that and save the location to remember, but it didn’t work, so I had to hold a button to manually override each time. Maybe I’m missing something here?

While older Model X cars’ front doors open all the way when you approach, on newer cars without ultrasonic sensors, this feature has been disabled and the door opens just a crack as it can’t tell if there are obstacles in the way. You also have to wait for it to open a crack before you can open it further or close it.

On the other hand, Plaid mode acceleration is amazing, I’ve never experienced anything like that! The seats were very comfy and the cooled seats are a great summer feature.

But the Tesla Vision system makes me hesitant to upgrade my car, despite all of these great incentives to do so.

Refreshed Model 3:

Finally, it’s worth keeping in mind that Tesla will be coming out with a fully refreshed version of the Model 3, nicknamed Highland, likely later this year. It’s expected to have better range, a rear touchscreen, cooled front seats, and more features. However, it’s also expected to have the annoying push button turn signal and lack of a gear selector, and it will likely cost more, so maybe that’s incentive to buy the existing model while it’s still available?

Price History Chart:

Here is a chart showing how Tesla pricing has changed over the past few years, from the lowest prices offered during the pandemic, to the quick increase in pricing due to the chip shortage and inflation, to the rapid drop in pricing now to boost demand as both output and competition increases.

ModelLate 2020/Early 2021 PricingMid 2022 PricingApril 2023 PricingMay 2023 PricingSeptember 2023 PricingOctober 2023 PricingDecember 2023 PricingJuly 2024 PricingCurrent Pricing After Tax Credit
Model 3 Rear-Wheel Drive/Standard Range$35,000, in-store onlyDiscontinuedDiscontinuedDiscontinuedDiscontinuedDiscontinuedDiscontinuedDiscontinued-
Model 3 Rear-Wheel Drive/Standard Range+$37,990$46,990$39,990$40,240$39,740 after $500 referral discount$38,740 after $250 referral discount$38,990$38,990$38,990
Model 3 Rear-Wheel Drive/Long RangeWas unavailableWas unavailableWas unavailableWas unavailableWas unavailableWas unavailableWas unavailable$42,490$34,990
Model 3 All-Wheel Drive/Long Range$46,990$57,990Was unavailable$47,240$46,740 after $500 referral discount$45,740 after $250 referral discount$45,990$47,990$39,990
Model 3 All-Wheel Drive/Performance$54,990$62,990$52,990$53,240$52,740 after $500 referral discount$50,740 after $250 referral discount$50,990$54,990$47,490
Model Y Rear-Wheel Drive/Standard RangeWas unavailableWas unavailableWas unavailableWas unavailableWas unavailable$43,740 after $250 referral discount$43,990Discontinued-
Model Y Rear-Wheel Drive/Long RangeWas unavailableWas unavailableWas unavailableWas unavailableWas unavailableWas unavailableWas unavailable$44,990$37,490
Model Y All-Wheel Drive/Standard Range$41,990Was unavailable$46,990$47,490$47,240 after $500 referral discountDiscontinuedDiscontinuedDiscontinued-
Model Y All-Wheel Drive/Long Range$49,990$65,990$49,990$50,490$49,990 after $500 referral discount$48,240 after $250 referral discount$48,990$47.990$40,490
Model Y All-Wheel Drive/Performance$59,990$69,990$53,990$54,490$53,990 after $500 referral discount$52,240 after $250 referral discount$52,490$51,490$43,990
Model S All-Wheel Drive/Long Range$79,990$104,990$84,990$88,490$73,990 after $1,000 referral discount$77,740 after $250 referral discount$74,990$72,990Ineligible for credit.
Model S Plaid$119,990$135,990$104,990$108,490$88,990 after $1,000 referral discount$89,740 after $1,000 referral discount$89,990$87,990Ineligible for credit.
Model X All-Wheel Drive/Long Range$89,990$120,990$94,990$98,490$78,990 after $1,000 referral discount$79,740 after $1,000 referral discount$79,990
Model X Plaid$119,990$138,990$104,990$108,490$88,990 after $1,000 referral discount$89,740 after $1,000 referral discount$94,990$92,990Ineligible for credit.
Cybertruck Rear-Wheel Drive-------$60,990Ineligible for credit.
Cybertruck All-Wheel Drive-------$79,990Ineligible for credit.
Cybertruck Cyberbeast-------$99,990Ineligible for credit.

Do you own a Tesla? Will you upgrade it with these incentives?

HT: Leon F.

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68 Comments On "[Last Chance For Model 3 $7,500 Tax Credit] Tesla Massively Slashes Price Of Model X, Making It Eligible For Federal Tax Credit And More!"

All opinions expressed below are user generated and the opinions aren’t provided, reviewed or endorsed by any advertiser or DansDeals.

Mia Flyer

whats about the new updated model 3 ?


New Highland revision details are out. Mostly positive but totally ridiculous turn signal and gear selector again. And no USS. Why in the world do they make these crazy decisions that absolutely no one is happy about and is objectively a huge step backwards, I don’t understand.


Tempting but interest rates are too high


Now that the highland is out, inventory discounts are back in NJ.


I ordered the model Y a few days ago and used your link.


What other EVs are going to hit the market soon and how will this Model X Price cut Rock the already shaky EV market?


My lease is up at the end of the year. Would you get a model X all wheel now or do you think it will get cheaper? Can I order/purchase it now for delivery end of December?


Is it true that the Tesla can now be filtered? That’s the deal breaker for me. Was holding off.


wheres best place to finance it for NJ? any will hold value better than another?


Given market condition and fedral credit wait when Plaid model will be under tax credit limit, may be by end of the year


that is crazy!!


I bought my Y last year, 7 seater long range for basically the same price as the cheapest model X is selling for right now (and it qualifies for tax credit- last year I did not). bummer!


i never owned an electric car. Can someone break down for me the difference between a gas car and an electric. Most importantly, how far can i go?


Functionally, they’re the same. Both get you to where you need to go. Electric cars have shorter range and take longer to fill up. Under most circumstances they’re cheaper than gas when filling up at home, but slightly more expensive if filling at a fast charger. Acceleration is great on an electric vehicle.

The main reason i got an electric vehicle was because i get free charging at work.

Otherwise, there’s really no reason to buy one yet. Battery technology (both range and charging) will be much better (on par with gas) in a few years.


Maybe I’m missing something but most if not all of the Model X’s near me are over 80K
(by at least $240) which would make the car ineligible for the tax credit……at least that’s the way I read the criteria.

Please correct me if I’m out to lunch on this.

I was about to pull the trigger on a Model Y, but now reconsidering the X if I can get the $7500. Any insight is appreciated.



Great article and thank you for the information!


I would disagree with spending $6,000 on EAP because it makes long-haul trips a bit easier (as long as you don’t mind the random phantom braking and other issues that still exist…but that’s with all Teslas using the cruise control, not just with EAP or Full).

IF you’re planning a longer trip and want the benefits of EAP, you’re better off just “subscribing” for a month for $200. You can do that as often as you want, and there’s no contract. You’ll thank me later if you had planned on paying $6,000 or $12,000 but instead chose to subscribe for a month here and there instead.


due to Maga extreme right wing views I would never buy a tesla and his antisemitic post shock me you support


That is just plain stupid, stop watching MSNBC


what bummer the 7 seater is out off the tax credit limit


I agree


Competition is heating up, you kill future competition by gobbling them up before they can deliver Cough Rivian heating up – Dumped model 3 for my RS1 pre price hike which I just took delivery of. The truck is THE SH*T!


What qualifies as a business car?


Just got an order in for 36220-7500-4000 and 500 off for referral model 3s are going for 37120 and occasionally lower


Do you need to be a NJ resident or US citizen to get this?

Myra B Goodman

The shape and look of the Teslas remind me of hunched over mice. The way the car is shaped, rear view, side view. There is NO flair, or attractiveness to this car whatsoever. They all look the exactly the same on the road. It seems like an invasion of some sort of large giant rodent on the highways and streets. The colors available are also drab and lack any personality at all. I guess these cars are fine if you have no taste and no desire for individuality.


True. I own one and that’s how I feel driving one and seeing them on the road. In LA feels like living in a simulator sometimes at a stop light/sign or freeway there’s literally a Tesla every car around me. When I drive in my rear view if I see a Tesla on the highway (1 in maybe 10 cars) I feel like they’re trying to get me. HALP!


You’re not wrong but it’s an appliance that gets you from point A to point B.


what exactly is autopilot?


FYI, beginning 1/1/24, the tax credit is refundable, and available at point of sale. Meaning, even if you have no tax liability, you won’t have to pay back the point-of-sale rebate.


That comment about “not having to pay back the point of sale rebate” is not accurate, there will be an accounting and affidavit required at POS, and in subsequent filing year. They WILL take prior year/s into account, but it’s not a credit at POS without any possible recourse.


Are the Inventory cars eligible for the $7500 tax rebate and the state-specific incentives?
I looked it up online, and it seemed to me that used EVs are only eligible for up to $4000 tax credit. Also, I live in NJ, and the site for the incentive rebate states:

“Charge Up New Jersey promotes clean vehicle adoption in the state by offering incentives of up to $4,000 for the purchase or lease of new, eligible battery electric vehicles (EV) and $250 for purchasing an eligible EV charger.”

This sounds like it also would only apply to a new EV. I found one in inventory I’d be interested in, but it would only make sense with the tax credit and rebate. Otherwise I’d buy new. Can you please clarify for me if these incentives are available for Tesla used Inventory vehicles? TIA!


Inventory just means they already “made” the car… it’s still new…
(they actually sell used too, but when you go into the car it’ll say it’s a new car…)
The rebates only care if the car is new, doesn’t matter if it’s from Inventory or custom ordered…


Any referral for the cybertruck


Seems like they took off the $500 for model 3/Y referral, and instead are offering 6 months free supercharging, and 3 months free FSD.
Which if you buy in December the only things you’re really getting (from the referral) is the 3 months FSD because 6 months free supercharging is offered to everyone (unless it stacks, which I HIGHLY doubt).
But on the other hand the referer gets 10k referral credits, which I believe was lower when they offered the $500…
(If you know the referer you can technically ask them to refer you, and then get you a wall charger… (For 9k credits) So you save 475…)


Can I transfer full self driving from my current lease to a new lease or is that only on purchased vehicles?

Jacob Hakimi

What about the tax credit for model Y? Is it staying at $7,500?


I would recommend not jumping on this “deal” as of yet. I would recommend waiting for the Highland version of the model 3 which will be released in the US very soon. The Highland version is supposed to be much more quiet, less bumpy and have much better mileage. The standard model in the North-East-winter will give you only about 200 miles on a full charge. In regard to the federal rebate, knowing Tesla, when push comes to shove, they will figure out a way how to be eligible for the full 7,500.
I currently have of the M3.


Dan can you help me? I reserved a tesla last night based on your updated post relying on the NJ rebate for the down payment but today the company told me the rebate ended on Nov. 21st. Now they say I won’t get back my $250


Nobody can help. Some years ago I ordered it during mid December but the final delivery date was January, meaning I would lose half of the $7,500 credit. They did have an estimated delivery in December, so I used that to get the order fee back after canceling my order.

It will probably say an estimated delivery of December now, go to the next step to set up a delivery date to see what you get. If there is nothing this month, then you have a case because they also claim a $7,500 credit. You don’t even need to apply for the loan or put your banking information to see the available delivery dates. I’m doing it now and they only have to dates available.


Is there still the NJ tax incentive on the model 3?


Does them mean we will see better deals on all electric cars by 12/31/23 as dealers try and make use of this credit on lease deals?


In many areas you can save a few thousand dollars by taking an inventory model. In NJ there is inventory with $3,500 discount.


Is nj still offering $4k off purchase price?



No quick buck

I have wanted to buy one and put it on Turo. Every time I see a price cut I am further tempted. But when I check the Turo carculator, Teslas don’t do to well especially in colder climates. Any thoughts out there?


Your referral link worked very nice, got my first free charge! Gives me also plenty of time to set up charging at home. Thank you.


Dan, which Tesla models are still eligible for the tax credit in 2024? Would be nice to take advantage of the new way the credit is paid out dealers.

Lazer Ungar

Hey Dan, any updates on the tesla prices and values?