The Used Clean Vehicle Credit is a federal tax credit that was launched at the beginning of 2023 that allows consumers to get up to $4,000 back when purchasing a used electric vehicle. When the list of qualified electric vehicles was first announced, Tesla was nowhere to be found. But now the popular EV company has been added to the list.
The reason that Tesla was initially excluded is that one of the stipulations for qualifying for the tax credit was that the car must cost under $25,000, and few Teslas met that mark, even used. However, as the price of some EVs has dropped this year, it seems that there are enough used Teslas that fall within that price range to get the popular brand on the list.
In addition to needing to cost under $25,000, qualifying cars must be at least two years old; have not already been transferred after August 16, 2022, to a qualified buyer; have a gross vehicle weight of under 14,000 pounds; be an eligible FCV or plug-in EV with a battery capacity of least seven kilowatt hours; and be for use primarily in the United States. See a list of qualifying cars here.
There are also stipulations on the buyer's side. Qualified buyers must not be the original owner of the car, must be buying it for road use and not resale, not be claimed as a dependant on someone else's tax returns, not have claimed another Used Clean Vehicle Credit in the last three years, and their modified gross adjusted incomes must not exceed $150,000 for married couples, $112,500 for heads of households, or $75,000 for other filers.
And that's not all — qualified EVs must be purchased through a dealership. So, if you're looking for a used Tesla for under $25,000, you should start with used car dealerships in your area and see what they have in stock.
Electrek's commenters offered some of their own advice to prospective buyers.
"You can get an older S for less than 25k because the risk of needing a new 20k battery is substantial," wrote one commenter.
Recurrent Auto has more context on the percentages of that risk and the costs associated here. In general, EV batteries are expected to last for 15 to 20 years, which is usually beyond the average time that a car is on the road, but EV innovations will likely expand that lifespan over time. EV battery recycling by companies like Redwood Materials could one day drive down these costs as well.
"2018-2019 model 3s can be found easily under $25k if they have over 100k miles as long as you are willing to shop nationwide," wrote another commenter.
While there are a number of sites online for finding used cars, Tesla does sell used models on its website. As the commenter alluded to, it will default to your own zip code, but you can plug in others to shop around.
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