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.
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The map above compares Tesla's current geofence with their potential expansion in yellow.
Not a Tesla App
With Tesla’s first major expansion of the Robotaxi Geofence now complete and operational, they’ve been hard at work with validation in new locations - and some are quite the drive from the current Austin Geofence.
Validation fleet vehicles have been spotted operating in a wider perimeter around the city, from rural roads in the west end to the more complex area closer to the airport. Tesla mentioned during their earnings call that the Robotaxi has already completed 7,000 miles in Austin, and it will expand its area of operation to roughly 10 times what it is now. This lines up with the validation vehicles we’ve been tracking around Austin.
Based on the spread of the new sightings, the potential next geofence could cover a staggering 450 square miles - a tenfold increase from the current service area of roughly 42 square miles.
If Tesla decides to expand into these new areas, it would represent a tenfold increase over their current geofence, matching Tesla’s statement. The new area would cover approximately 10% of the 4,500-square-mile Austin metropolitan area. If Tesla can offer Robotaxi services in that entire area, it would prove they can tackle just about any city in the United States.
In the map below, the blue icons are sightings of Tesla validation vehicles, while the yellow map area represents their potential expansion. The map overlays Tesla’s phases 1 and 2 and compares them to Waymo’s first two phases. You can toggle each one by tapping the icon at the top left and choosing which geofences you’d like to view.
From Urban Core to Rural Roads
The locations of the validation vehicles show a clear intent to move beyond the initial urban and suburban core and prepare the Robotaxi service for a much wider range of uses.
In the west, validation fleet vehicles have been spotted as far as Marble Falls - a much more rural environment that features different road types, higher speed limits, and potentially different challenges.
In the south, Tesla has been expanding towards Kyle, which is part of the growing Austin-San Antonio suburban corridor spanning Highway 35. San Antonio is only 80 miles (roughly a 90-minute drive) away, and could easily become part of the existing Robotaxi area if Tesla obtains regulatory approval there.
In the East, we haven’t spotted any new validation vehicles. This is likely because Tesla’s validation vehicles originate from Giga Texas, which is located East of Austin. We won’t really know if Tesla is expanding in this direction until they start pushing past Giga Texas and toward Houston.
Finally, there have been some validation vehicles spotted just North of the new expanded boundaries, meaning that Tesla isn’t done in that direction either. This direction consists of the largest suburban areas of Austin, which have so far not been serviced by any form of autonomous vehicle.
Rapid Scaling
This new, widespread validation effort confirms what we already know. Tesla is pushing for an intensive period of public data gathering and system testing in a new area, right before conducting geofence expansions. The sheer scale of this new validation zone tells us that Tesla isn’t taking this slowly - the next step is going to be a great leap instead, and they essentially confirmed this during this Q&A session on the recent call. The goal is clearly to bring the entire Austin Metropolitan area into the Robotaxi Network.
While the previous expansion showed off just how Tesla can scale the network, this new phase of validation testing is a demonstration of just how fast they can validate and expand their network. The move to validate across rural, suburban, and urban areas simultaneously shows their confidence in these new Robotaxi FSD builds.
Eventually, all these improvements from Robotaxi will make their way to customer FSD builds sometime in Q3 2025, so there is a lot to look forward to.
For years, the progress of Tesla’s FSD has been measured by smoother turns, better lane centering, and more confident unprotected left turns. But as the system matures, a new, more subtle form of intelligence is emerging - one that shifts its attention to the human nuances of navigating roads. A new video posted to X shows the most recent FSD build, V13.2.9, demonstrating this in a remarkable real-world scenario.
Toll Booth Magic
In the video, a Model Y running FSD pulls up to a toll booth and smoothly comes to a stop, allowing the driver to handle payment. The car waits patiently as the driver interacts with the attendant. Then, at the precise moment the toll booth operator finishes the transaction and says “Have a great day”, the vehicle starts moving, proceeding through the booth - all without any input from the driver.
If you notice, there’s no gate here at this toll booth. This interaction all happened naturally with FSD.
While the timing was perfect, the FSD wasn’t listening to the conversation for clues (maybe one day, with Grok?) The reality, as explained by Ashok Elluswamy, Tesla’s VP of AI, is even more impressive.
It can see the transaction happening using the repeater & pillar cameras. Hence FSD proceeds on its own when the transaction is complete 😎
FSD is simply using the cameras on the side of the vehicle to watch the exchange between the driver and attendant. The neural network has been trained on enough data that it can visually recognize the conclusion of a transaction - the exchange of money or a card and the hands pulling away - and understands that this is the trigger to proceed.
The Bigger Picture
This capability is far more significant than just a simple party trick. FSD is gaining the ability to perceive and navigate a world built for humans in the most human-like fashion possible.
If FSD can learn what a completed toll transaction looks like, it’s an example of the countless other complex scenarios it’ll be able to handle in the future. This same visual understanding could be applied to navigating a fast-food drive-thru, interacting with a parking garage attendant, passing through a security checkpoint, or boarding a ferry or vehicle train — all things we thought that would come much later.
These human-focused interactions will eventually become even more useful, as FSD becomes ever more confident in responding to humans on the road, like when a police officer tells a vehicle to go a certain direction, or a construction worker flags you through a site. These are real-world events that happen every day, and it isn’t surprising to see FSD picking up on the subtleties and nuances of human interaction.
This isn’t a pre-programmed feature for a specific toll booth. It is an emergent capability of the end-to-end AI neural nets. By learning from millions of videos across billions of miles, FSD is beginning to build a true contextual understanding of the world. The best part - with a 10x context increase on its way, this understanding will grow rapidly and become far more powerful.
These small, subtle moments of intelligence are the necessary steps to a truly robust autonomous system that can handle the messy, unpredictable nature of human society.
![No Driver Needed: Tesla FSD Stops at Toll, Waits for Driver to Pay and Takes Off Again [VIDEO]](https://www.notateslaapp.com/img/containers/article_images/fsd-beta/fsd-toll-booth.webp/57e008aff60c6c1e998e304eca200cda/fsd-toll-booth.jpg)
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