The Tesla Model 3 and Tesla Model Y are already the best-selling cars of any kind in California, and they're both cheaper in 2023 than they've been in the past. This means they're not only eligible for the newly revamped US federal EV tax credit, but also California's $2,000 electric car rebate.

As states, local areas, and the US federal government offer various incentives for green-friendly adoption, there are typically caps. For example, the new federal EV tax credit has limitations based on people's incomes, as well as the price of the vehicles. This is so that very wealthy folks can't benefit from the credit to use toward exceptionally pricey cars.

It seems many incentive programs across the globe have phased out some, if not all of Tesla's EVs since they're premium cars and SUVs with high price tags. However, the truth is, the vast majority of today's electric vehicles are on the premium (or even full-on luxury) side and have high sticker prices. In order to get these EVs to qualify for incentives and increase adoption, either the rules need to change or automakers have to get creative with pricing.

With all of that said, once Tesla dropped the prices on its entire lineup of cars for 2023, some of its vehicles in some configurations immediately became eligible for incentives that they either no longer qualified for, or were never eligible for in the first place.

The California Air Resources Board’s Clean Vehicle Rebate Program has current MSRP limits set at $45,000 for cars and $60,000 for larger vehicles. The Model 3 now starts at $42,990 and the Model Y at $54,990. However, when Tesla first cut the prices, the EVs weren't immediately deemed eligible for the rebate program. According to Electrek, Tesla had to reapply for eligibility. 

Fortunately, it appears Tesla has taken care of business on its end, and people in California can take advantage of the $2,000 rebate on both the Model 3 and Model Y. In fact, if you ordered a qualifying car on or after January 12, 2023 (when Tesla's price changes first made the cars eligible), you can get a "retroactive" rebate. People can apply for the rebate within 90 days of registering the EV.

It's also important to note that lower-income buyers may be eligible for a larger rebate of $4,500 in California. Beginning February 28, 2023, that lower-income rebate is expected to be boosted to a whopping $7,500. Keep in mind that these rebates are separate from the $7,500 federal EV tax credit, which both cars also qualify for in addition to California's rebate.

You should always consult a professional before moving forward with an EV purchase and counting on a rebate or tax credit. There are many specific rules, and not everyone will qualify.

Got a tip for us? Email: