The IRS has released which Tesla models will qualify for the 2023 tax credit
Tesla
As of January 1, 2023, Americans can claim a $7,500 tax credit when buying a Tesla (and other electric vehicles). The Inflation Reduction Act allows eligible buyers the opportunity to claim a clean vehicle tax credit of up to $7,500 under Internal Revenue Code Section 30D.
We knew this was coming, and it slowed demand as shoppers were delaying their purchases until the new year. However, Tesla introduced an end-of-year sale, discounting their vehicles by $7,500 to encourage people not to wait.
Tesla Models That Qualify for the Tax Credit
The Tesla discount disappears on December 31, 2022, and the new government tax credit kicks in. But it is important to note that not all Teslas qualify for the clean vehicle tax credit. Model S and Model X are not on the list of eligible vehicles due to price, but the rear wheel and long-range versions of the Model 3 did make the list if the manufacturer's suggested retail price is below $55,000.
Six versions of the Model Y also made the list. They include the all-wheel drive, long-range and performance versions in the five-seat and seven-seat variations. Interestingly, Tesla does not produce a Model Y Performance in the seven-passenger setup, but it’s available for credit.
The IRS appears to work closely with vehicle manufacturers to determine eligible models. This could be telling of what Tesla plans to offer in 2023.
We may not only see a seven-seater performance Model Y, but we may also see Tesla reintroduce the Long Range Model 3 or Model Y for under $55,000 in 2023.
The Model Y all-wheel drive, long-range and performance five-seat variants do not currently qualify for the tax rebate according to the IRS since their MSRP is above the $55,000 threshold. We'll have to see if Tesla makes any changes to these models to get them under the $55,000 MSRP limit.
Model Year
Vehicle Description
Applicable MSRP Limit
2023
Tesla Model 3 Rear Wheel Drive
$55,000
2023
Tesla Model 3 Long Range
$55,000
2023
Tesla Model Y All-Wheel Drive - 7 seat variant (3-rows)
$80,000
2023
Tesla Model Y Long Range - 7 seat variant (3-rows)
$80,000
2023
Tesla Model Y Performance - 7 seat variant (3-rows)
$80,000
2023
Tesla Model Y All-Wheel Drive - 5 seat variant (2-rows)
$55,000
2023
Tesla Model Y Long Range - 5 seat variant (2-rows)
$55,000
2023
Tesla Model Y Performance - 5 seat variant (2-rows)
$55,000
Older EVs also Qualify
The tax credits are not just for vehicles purchased in 2023. According to the IRS’ website, purchases made between August 17 (when the legislation was announced) and December 31, 2022, may also qualify for a tax break. There is also a used EV tax credit allowing consumers tax credits for up to $4,000 or 30% of the cost of a used EV that’s at least two years old.
To check if your vehicle meets requirements, use the vehicle identification number decoder on the Department of Energy’s website.
What is the Inflation Reduction Act?
The government says the Inflation Reduction Act is “the most significant climate legislation in U.S. history.” It includes $739 billion aimed at “green power, lower costs through tax credits, reduce emissions, and advance environmental justice.” When announced, the government said, “It will offer new access to tax credits as well as grants and incentives to reduce air pollution.”
The Inflation Reduction Act also has several credits available for EV charging. There is a property credit for companies that install EV chargers. The IRS will offset up to 30 percent of the total costs of purchase and installation of charging equipment, up to $100,000 per charger. Experts believe this new legislation will help the U.S. reduce emissions by 40% by 2030.
Tesla’s Cybertruck has officially earned a 5-Star Safety Rating from the NHTSA—an impressive achievement given the vehicle’s design. The achievement demonstrates Tesla’s engineering prowess. As one engineer points out, it wasn’t an easy feat.
Interestingly, the NHTSA only recently disclosed the results, despite the crash tests being completed a while ago. According to Lars Moravy, Tesla’s VP of Vehicle Engineering, the team had been aware of the 5-star rating for quite some time. While the reason for the delay remains unclear, now that the results are public, Tesla’s engineers can finally share how they achieved the rating.
Crumple Zones
Wes Morril, the Cybertruck’s Lead Engineer, wrote about the crash test video on X recently, addressing the claims that the Cybertruck doesn’t have a crumple zone. He also posted a side-by-side video (below) of the engineering analysis and the crash test itself.
Engineered Crash Safety
There’s a lot of engineering precision at play when a Cybertruck is involved in a crash. Unlike traditional crash structures that rely on crash cans and collapse points, the Cybertruck’s front gigacasting is designed to absorb and redirect impact forces in a highly controlled manner.
It all starts with the bumper beam, which crushes within the first few milliseconds of a high-speed impact. At the same time, the vehicle’s sensors rapidly analyze the crash dynamics and determine the optimal deployment of safety restraints, including airbags and seat belt pre-tensioners. These split-second actions are crucial in keeping occupants safe.
As the crash progresses, the vehicle’s structure deforms in a carefully engineered sequence. The drive unit cradle bends, directing the solid drive unit downward and out of the way, allowing the gigacasting to begin absorbing impact forces.
The casting crushes cell by cell, methodically dissipating energy in a controlled manner. This gradual deceleration reduces the g-forces transferred to occupants, making the crash much less severe. As the gigacast begins crushing, the safety restraints are deployed.
As Wes points out in his post - you can see how accurate the virtual analysis and modeling were. The video shows the simulated crash side by side with the real-life crash test and they’re almost identical. All that virtual testing helps provide feedback into the loop to design a better and safer system - one that is uniquely different than any other vehicle on the road.
All the armchair experts claimed the Cybertruck has no crumple zone and I get it, the proportions seem impossible. It was a tough one and there is a lot of engineering that went into it. Let me break it down for you:
Tesla has pioneered the use of single-piece castings for the front and rear sections of their vehicles, thanks to its innovative Gigapress process. Many automakers are now following suit, as this approach allows the crash structure to be integrated directly into the casting.
This makes the castings not only safer but also easier to manufacture in a single step, reducing costs and improving repairability. For example, replacing the entire rear frame of a Cybertruck is estimated to cost under $10,000 USD, with most of the expense coming from labor, according to estimates shared on X after high-speed rear collisions.
These insights come from Sandy Munro’s interview (posted below) with Lars Moravy, Tesla’s VP of Vehicle Engineering, highlighting how these advancements contribute to the improvements in Tesla’s latest vehicles, including the New Model Y.
However, with the new Model Y, Tesla has decided to go a different route and eliminated the front gigacast.
No Front Casting
Tesla’s factories aren’t equipped to produce both front and rear castings for the Model Y. Only Giga Texas and Giga Berlin used structural battery packs, but these were quickly phased out due to the underwhelming performance of the first-generation 4680 battery.
Tesla has gone back to building a common body across the globe, increasing part interchangeability and reducing supply chain complexity across the four factories that produce the Model Y. They’ve instead improved and reduced the number of unique parts up front to help simplify assembly and repair.
There is still potential for Tesla to switch back to using a front and rear casting - especially with their innovative unboxed assembly method. However, that will also require Tesla to begin using a structural battery pack again, which could potentially happen in the future with new battery technology.
Rear Casting Improvements
The rear casting has been completely redesigned, shedding 7 kg (15.4 lbs) and cutting machining time in half. Originally weighing around 67 kg (147 lbs), the new casting is now approximately 60 kg (132 lbs).
This 15% weight reduction improves both vehicle dynamics and range while also increasing the rear structure’s stiffness, reducing body flex during maneuvers.
Tesla leveraged its in-house fluid dynamics software to optimize the design, resulting in castings that resemble organic structures in some areas and flowing river patterns in others. Additionally, manufacturing efficiency has dramatically improved—the casting process, which originally took 180 seconds per part, has been reduced to just 75 seconds, a nearly 60% time reduction per unit.
Advancements in die-casting machines and cooling systems have allowed @Tesla to dramatically reduce cycle times and improve dimensional stability. pic.twitter.com/WB5ji67rvV
Tesla’s new casting method incorporates conformal cooling, which cools the die directly within the gigapress. Tesla has been refining the die-casting machines and collaborating with manufacturers to improve the gigapress process.
In 2023, Tesla patented a thermal control unit for the casting process. This system uses real-time temperature analysis and precise mixing of metal streams to optimize casting quality. SETI Park, which covers Tesla’s manufacturing patents on X, offers a great series for those interested in learning more.
The new system allows Tesla to control the flow of cooling liquid, precisely directing water to different parts of the die, cooling them at varying rates. This enables faster material flow and quicker cooling, improving both dimensional stability and the speed of removing the part from the press for the next stage.
With these new process improvements, Tesla now rolls out a new Model Y at Giga Berlin, Giga Texas, and Fremont every 43 seconds—an astounding achievement in auto manufacturing. Meanwhile, Giga Shanghai operates two Model Y lines, delivering a completed vehicle every 35 seconds.
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