ERIC KIM ₿

Inflation Reduction Act?

Commercial Vehicles

To purchase Tesla vehicles as a business or organization, contact the Tesla Fleet team.

Inflation Reduction Act

As part of the 2023 Inflation Reduction Act, eligible businesses and tax-exempt organizations can claim up to a $7,500 credit when purchasing new Tesla vehicles with a gross vehicle weight rating (GVWR) of up to 14,000 pounds. All Tesla passenger vehicles qualify for this incentive:  

  • Model S
  • Model 3
  • Model X
  • Model Y

Additionally, Semi qualifies for a tax credit of up to $40,000. 

For the full list of current requirements for commercial clean vehicle credits, review the IRS website. 

Note: For businesses, the tax credits are nonrefundable, so you can’t get back more on the credit than you owe in taxes. Tax-exempt entities have the option to take a direct payment in lieu of the credit. This business tax credit amount applies to deliveries now. There are currently no AGI or price cap limitations for businesses or tax-exempt organizations. 

Section 179 Deduction 

Qualifying businesses can claim a deduction of up to $28,900 when purchasing a new Tesla vehicle with a gross vehicle weight rating (GVWR) of at least 6,000 pounds. To qualify for the tax deduction, vehicles must be operated for legitimate business use >50% the time.  

For the full list of current requirements and limitations, review the IRS website and consult your tax advisor.  

Consumer Vehicles

Inflation Reduction Act

On January 1, 2023, the Inflation Reduction Act of 2022 qualified certain electric vehicles (EVs) for a tax credit of up to $7,500 for eligible buyers.

Qualifications include:  

  • Customers must buy it for their own use, not for resale
  • Use the vehicle primarily in the U.S.
  • Adjusted Gross Income (“AGI”) limitations
  • MSRP price caps

For the full list of the current requirements, review the IRS website.

New Vehicles

Customers who take delivery of a qualified new Tesla vehicle and meet all federal requirements are eligible for a tax credit up to $7,500, which can be deducted from the purchase price at time of delivery for eligible cash or loan purchases through Tesla. Customers are limited to two time-of-sale tax credits per year. 

Tax Credit for Each Vehicle:

  • Model 3 Performance: $7,500 
  • Model X Dual Motor: $7,500
  • 2024 Model Y Rear-Wheel Drive: $7,500
  • Model Y Long Range: $7,500 
  • Model Y Performance: $7,500 

AGI Limitations

  • $300,000 for married couples filing jointly  
  • $225,000 for heads of households 
  • $150,000 for all other filers 

Price Caps

The vehicle MSRP at time of delivery must not exceed the following caps. This price includes optional equipment physically attached to the vehicle at the time of delivery and excludes software features, accessories, taxes and fees.

The following models currently qualify for federal tax credits for eligible buyers who meet all other federal requirements (including AGI limitations):

Price caps set by the federal government are subject to change.   

Inflation Reduction Act

Eligible businesses and tax-exempt organizations can claim up to $7,500 for new Tesla vehicle purchases, including:

  1. Model S
  2. Model 3
  3. Model X
  4. Model Y

For businesses, tax credits are non-refundable, so you can’t get back more on the credit than you owe in taxes. Tax-exempt entities have the option to take a direct payment in lieu of the credit.

Section 179 Deduction

Qualifying businesses can claim a deduction of up to $28,900 for vehicles with a Gross Vehicle Weight Rating (GVWR) of more than 6,000 lbs.

Your eligibility for any tax credits depends on your personal tax situation. We recommend speaking with a tax professional for guidance.

Learn more

California Federal

State Incentives

Electric Vehicles

  • Tesla owners displaying currently valid Clean Air Vehicle decals may use California’s HOV lanes without meeting the occupancy restrictions.
    *Exclusions apply for vehicles purchased before 2018 or by high income earners if a CVRP rebate was used.
  • In the Bay Area, through Clean Cars 4 All, various amounts ($5,500-$9,500) are available to replace an older ICE vehicle with an EV; income limits apply.

Solar and Energy Storage

Local and Utility Incentives

Electric Vehicles

  • PG&E, SCE, SMUD and SDG&E all offer reduced electricity rates based on time-of-use for EV owners.
  • PG&E offers up to $500 for one Level 2 charger and up to $2,000 for panel upgrades. Applies to single-family households who have recently purchased or leased an EV within six months prior to applying to the program. Income limits apply. Launches early 2023.
  • Anaheim Public Utilities offers up to $1,500 per any Level 2 charger for customers not participating in one of the TOU or EV Rate programs; a $3,000 rate is applied for networked chargers if the customer is signed up for the TOU program. 
  • Alameda Municipal Power offers a rebate reward card up to $800 when residents purchase and install a Level 2 (240V) EV charger at home.
  • Apple Valley Choice Energy offers EV-specific energy rates for home charging.
  • Bay Area Air Quality Management offers up to $2,000 in additional funding for a Level 2 home charger installation and up to $600 for Level 2 portable charger for a new, used or leased plug-in hybrid (PHEV) or battery electric vehicle (BEV).
  • Burbank Water and Power offers residents up to $500 for smart-network enabled L2 chargers, and $600 for eligible customers from disadvantaged communities.
  • Glendale Water and Power residential customers can receive up to $599 for installing a home charger. Rebates are available on a first-come, first-served basis until funds are exhausted.
  • King City CCA provides two EV-specific energy rates for home charging.
  • Eligible Los Angeles Department of Water and Power (LADWP) customers may receive a rebate of up to $1,000 for the purchase and installation of a qualified Level 2 (240-volt) charging station and a $250 rebate for the installation of a dedicated EV meter. Customers participating in LADWP’s Lifeline or EZ-SAVE Low-Income Customer Assistance (EZ-SAVE) Program are eligible for an additional $500 rebate.
    Note: The Tesla Wall Connector with proprietary Tesla connector is not eligible for a rebate. However, Tesla drivers are eligible to apply for a charging station rebate if they purchase the Tesla J1772 charging station.
  • Marin Clean Energy provides customers a $3,500 rebate for newly purchased and leased EVs, and lower rates for off-peak home EV charging.
  • The City of Pasadena offers residents a rebate up to $250 when they purchase or lease a new or used plug-in EV and an additional $1,000 for those enrolled in an income-qualifying PWP program.
  • Clean Power Alliance offers EV-specific energy rates for home charging.
  • Pasadena Water and Power customers can receive up to $1,250 rebate for buying/leasing an EV, and businesses can receive up to $50,000 for installing public EV chargers.
    Residential electric customers are eligible for a $600 rebate when they install a qualifying Wi-Fi enabled EV charger at their home, or a $200 rebate when they install a standard (Non Wi-Fi) EV charger. Income eligible participants can earn up to $1,500.
  • Pioneer Community Energy offers two EV-specific energy rates for home charging.
  • Property-Assessed Clean Energy (PACE) financing allows property owners to borrow funds to pay for energy improvements, including purchasing and installing EVSE.The borrower repays over a defined period of time through a special assessment on the property. Local governments in California are authorized to establish PACE programs. Property owners must agree to a contractual assessment on the property tax bill, have a clean property title, and be current on property taxes and mortgages. Financing limits are 15% of the first $700,000 of the property value and 10% of the remaining property value.
  • San Joaquin Valley Air Pollution Control District offers a rebate up to $3,000 for eligible customers.
  • San Jose Community Energy offers EV-specific energy rates for home charging.
  • Incentive of up to $4,000 for purchase of a used EV for low income San Mateo residents.
  • Silicon Valley Clean Energy provides residential and commercial rates for EV charging.
  • Sonoma Clean Power customers can apply for a reimbursement of a smart electric vehicle Level 2 charger.
  • South Coast Air Quality Management offers rebates up to $800 for EV home charging installation.
  • Southern California Edison (SCE) offers rebates up to $1,000 for a used electric vehicle and a discounted rate to customers for electricity used to charge EV’s.

Solar and Energy Storage

  • Anaheim Public Utilities offers up to $2,500 for the installation of a Powerwall.
  • PG&E offers eligible customers a $5,000 rebate on the purchase and installation of Powerwall.
  • PG&E, SCE, and SDG&E customers can earn $60 per kW off the cash or financing price of solar panels or Solar Roof by trading their Solar Renewable Energy Credits (SREC) (filed on behalf of the customer).
  • Tesla is installing Tesla Backup Switch in Lathrop Irrigation District territory and is currently offering all customers in this service territory a $500 discount on any new Powerwall plus solar installation.
  • Tesla is installing Tesla Backup Switch in Pacific Gas and Electric Company territory and is currently offering all customers in this service territory a $500 discount on any new Powerwall plus solar installation.
  • Tesla is installing Tesla Backup Switch in Pacific Power territory and is currently offering all customers in this service territory a $500 discount on any new Powerwall plus solar installation.
  • Tesla is installing Tesla Backup Switch in Sacramento Municipal Utility District (SMUD) territory and is currently offering all customers in this service territory a $500 discount on any new Powerwall plus solar installation.
  • Tesla is installing Tesla Backup Switch in SDG&E territory and is currently offering all customers in this service territory a $500 discount on any new Powerwall plus solar installation.
Federal Incentives

View federal income tax credits for solar and Powerwall.

Inflation Reduction Act

The Inflation Reduction Act, signed into law in August 2022, represents a significant legislative effort by the United States government to address several key issues: reducing inflation, combating climate change, lowering prescription drug costs, and reforming the tax code. Here’s a pragmatic and insightful overview of its main components and how they align with innovation, entrepreneurship, and a forward-thinking approach to societal challenges:

Climate Change and Energy Policy

  • Renewable Energy Investments: The Act allocates hundreds of billions of dollars toward renewable energy projects, including tax credits for solar and wind energy production, electric vehicle (EV) credits, and investments in clean energy technologies. This opens vast opportunities for innovation and entrepreneurship in the green energy sector, encouraging the development of new technologies and businesses focused on sustainability.
  • Energy Efficiency: There are incentives for businesses and homeowners to improve energy efficiency, which could spur innovation in construction, materials science, and smart home technology.

Health Care

  • Prescription Drug Costs: The Act gives Medicare the power to negotiate prices for certain prescription drugs, which could lead to lower healthcare costs for millions of Americans. It also caps out-of-pocket expenses for Medicare beneficiaries, providing a more stable and predictable market for pharmaceuticals and healthcare innovation.
  • Health Insurance: It extends subsidies for health insurance premiums for those purchasing coverage through the Affordable Care Act (ACA) marketplaces, aiming to make healthcare more affordable and accessible.

Tax Reforms and Fiscal Measures

  • Corporate Taxation: The Act introduces a minimum corporate tax rate of 15% for companies with profits over $1 billion, aiming to ensure that large, profitable corporations contribute a fair share to the economy. It also enforces a tax on stock buybacks, which could influence corporate financial strategies.
  • IRS Funding: Additional funding for the Internal Revenue Service (IRS) is intended to enhance tax enforcement and compliance, potentially reducing tax evasion and increasing government revenues.

Impact on Inflation

  • The Act’s title suggests a focus on reducing inflation. By making long-term investments in energy independence and healthcare, the goal is to ease some of the cost pressures that contribute to inflation. However, the direct impact on inflation in the short term is a subject of debate among economists.

Implications for Aesthetics, Philosophy, and Entrepreneurship

  • Aesthetics: The shift towards sustainable and energy-efficient technologies can influence design philosophies, encouraging a more minimalist and functional aesthetic in architecture, product design, and urban planning.
  • Philosophy: The Act embodies a pragmatic approach to addressing complex societal challenges, reflecting a philosophical shift towards collective action for the common good and sustainability.
  • Entrepreneurship: By opening up new funding opportunities and markets, the Act encourages innovation in sectors critical for the future, including clean energy, healthcare, and technology. Entrepreneurs can leverage these changes to create solutions that are both profitable and beneficial to society.

In essence, the Inflation Reduction Act is a multifaceted piece of legislation that not only aims to address immediate economic concerns but also sets the stage for long-term innovation and growth in key sectors of the economy. Its emphasis on sustainability, healthcare, and fiscal responsibility reflects a holistic approach to tackling today’s challenges while paving the way for future opportunities in entrepreneurship and innovation.

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