Buying a New Tesla? The EV Tax Credit Will Soon Come Off at Time of Purchase

By Kevin Armstrong
In 2024, the US EV tax credit will come off the car at the time of purchase
In 2024, the US EV tax credit will come off the car at the time of purchase
Tesla

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) announced measures that could benefit Tesla buyers. Consumers will soon enjoy the benefits of the federal tax credits at the point of sale for new and previously owned clean vehicles, a move that aligns perfectly with Tesla's mission to accelerate the world's transition to sustainable energy.

Immediate Rebates on New and Used EVs

Starting January 1, 2024, under the Inflation Reduction Act, buyers of new clean vehicles like Teslas can transfer a credit of up to $7,500 directly to car dealers. For those eyeing previously owned clean vehicles, a credit of up to $4,000 can be transferred. This system effectively reduces the vehicle's purchase price instantly. No longer will buyers have to wait for their annual tax return to see the benefits; instead, they can enjoy an immediate reduction in their Tesla's price.

This initiative is not just a win for consumers but also for dealers. The IRS is launching a new website, IRS Energy Credits Online, where dealers must register to facilitate these clean energy tax credits. Starting in January, dealers registered on this platform can submit information on clean vehicle sales and quickly receive payments for transferred credits, often within a 72-hour window.

Ensuring Transparency and Authenticity

Buyers transferring the credit will see the purchase price of their Tesla reduced or receive a cash amount equivalent to the available credit for the eligible vehicle. Dealers must provide clear disclosures during the credit transfer process, ensuring buyers fully know the credit's amount and eligibility.

In addition to ensuring clarity for consumers, the guidance also emphasizes safeguards against fraudulent practices. Verification processes will be in place to ensure that only legitimate, tax-compliant dealers benefit from these advance payments and that only qualifying vehicles receive the credit.

Tax Implications Simplified

The newly proposed rules also address these transactions' federal income tax implications. For Tesla, credit transfers and advance payments won't significantly impact their tax liability. And for buyers, payments made by dealers, whether as cash or towards the vehicle's down payment, won't be considered part of their gross income.

The Inflation Reduction Act paves the way for more affordable access to clean vehicles. After a confusing start to these credits, it appears the IRS is now responding to consumer and market needs. This move is poised to further propel Tesla's already skyrocketing popularity, making sustainable driving more accessible.

Tesla Cybertruck's High-Profile Auction Sale Underlines Strict Contractual Resale Conditions

By Kevin Armstrong
Cybertruck Sold at Auction
Cybertruck Sold at Auction

A Foundation Series Tesla Cybertruck fetched a remarkable $244,000 at auction via Cox Automotive's Manheim platform, surpassing its MSRP by more than $120,000 and capturing widespread attention. It's crucial to take into account Tesla's distinctive contract stipulations related to the resale of this highly sought-after, iconic vehicle.

Tesla's Resale Terms

Tesla has outlined specific terms for the resale of the Cybertruck, given its initial limited release. Although the information is not on the website, it does appear with the purchase agreement. According to the contract, owners are prohibited from selling or attempting to sell the vehicle within the first year of delivery. Should an owner need to sell the vehicle within this period due to unforeseen circumstances, they must notify Tesla in writing, allowing the company to repurchase the vehicle at the original purchase price, adjusted for mileage, wear and tear, and repair costs to meet Tesla's standards.

This policy highlights Tesla's intent to control the resale market and maintain the vehicle's exclusivity. Owners found breaching these terms face the possibility of significant penalties, including a $50,000 fine or the full value received from the sale, emphasizing the seriousness with which Tesla views compliance.

However, are we supposed to believe celebrities like Kim Kardashian, Lady Gaga, and Jay-Z were sitting at their computers waiting for the reservation list to open? A-list celebs driving Teslas is good for the brand, but it's questionable how they scooped up the Cybertruck so quickly if it wasn’t a private sale.

Buyer's Intent and Tesla's Stance

The purchase by a Porsche dealership in Orlando adds another layer of intrigue, as it remains unclear whether the vehicle will be showcased, resold, or used for comparative analysis. Automotive manufacturers often acquire competitors' models for research and development purposes, suggesting that this acquisition could offer Porsche valuable insights into Tesla's cutting-edge electric vehicle technology.

This high-profile auction sale could inspire other Cybertruck owners to explore the resale market, hoping for similar financial gains. However, Tesla's stringent resale conditions may deter some, casting a shadow of speculation over how the company will enforce its policy. The effectiveness of Tesla's strategy compared to other automakers' efforts to prevent flipping remains to be seen, with this incident possibly setting a precedent for future transactions.

This isn't the first instance of a Cybertruck making waves at auction. Previously, a Cybertruck was auctioned at the Petersen Museum Gala event, fetching an impressive $400,000. Whether this sale will encourage more owners to navigate Tesla's resale policy for profit or if it will underscore the company's control over its secondary market remains to be seen. What is clear, however, is the Cybertruck's undiminished impact on both the electric vehicle landscape and the broader automotive industry.

Tesla Model 3's 2024 IIHS Safety Award Snub, While Model Y Shines

By Kevin Armstrong
Model Y Top Safety Pick
Model Y Top Safety Pick

The Insurance Institute for Highway Safety (IIHS) has once again raised the bar for vehicle safety in 2024, introducing more rigorous criteria to evaluate the protection vehicles offer to occupants and pedestrians alike. Amidst these enhanced standards, the Tesla Model Y stands out as a recipient of the prestigious Top Safety Pick+ award, affirming its position as a leader in automotive safety, a position it has held for years, also claiming last year’s title.

Innovative Safety Features

The 2024 Tesla Model Y has demonstrated outstanding performance across various safety tests, excelling in crashworthiness and crash avoidance capabilities. The vehicle earned the highest possible rating, 'Good'’ in all tested categories, including small and moderate overlap front tests, side impact tests, roof strength, and head restraint tests. Notably, Model Y's performance in the small overlap front test was particularly commendable, showcasing effective airbag deployment, well-maintained survival space for the dummy, and a low risk of significant injuries.

The Model Y has advanced safety features significantly contributing to its top-tier rating. Among these, automatic emergency braking stands out, displaying superior pedestrian detection and avoidance capabilities under daylight and nighttime conditions. Additionally, the vehicle's LED projector headlights received high praise for their illumination quality, ensuring optimal visibility without causing glare to oncoming traffic. Lars Moravy, VP of Vehicle Engineering at Tesla, explains why the company’s vehicles are so safe.

Recognizing the importance of safety for passengers of all ages, the Tesla Model Y's LATCH system for child seat anchors was rated 'Acceptable.'’ This reflects the vehicle’s commitment to accommodating families and enhancing safety for younger passengers, highlighting the ease of use and accessibility of the anchors.

Absence of Model 3

While the Tesla Model Y has proudly secured its place among the Insurance Institute for Highway Safety's (IIHS) Top Safety Pick+ awardees for 2024, the Model 3 was noticeably absent from this prestigious list. The reason behind this, as reported by Teslarati, sheds light on the stringent criteria set by IIHS and the potential for future inclusion of Model 3.

Historically, the Model 3 was honored with the Top Safety Pick+ award in 2020, 2021, and 2022 but was notably missing in 2023 and 2024. Joe Young of the IIHS explained to Teslarati the reason behind this absence: the Model 3 has yet to be evaluated in the institute's updated side crash test and lacks a rating in the updated moderate overlap crash test—both critical components of the award criteria for this year.

This lack of current evaluations means the IIHS cannot consider the Model 3 for either safety award at this time. However, it's not a definitive exclusion. The IIHS is open to recognizing the 2024 Model 3 later in the year as additional tests are completed and ratings are updated.

Tesla’s engineering focus on creating the safest vehicles in the world is evident, with an extremely low chance of roll-over and occupant injury, positioning the Model Y as the best-selling car globally and among the safest on the road.

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