Not all electric car purchases are created equal.
A patchwork of state-level incentives that are available on top of the federal clean energy vehicle tax credit means that the effective prices paid for EVs differ by thousands of dollars across the U.S.
Tesla highlighted this in its third-quarter shareholder update, with Elon Musk talking about how competitive the Model Y has become, despite having a higher base price than other top-sellers in the compact SUV segment.
Tesla doesn’t break out U.S. sales, but Car and Driver estimates that the Model Y is the fifth best selling vehicle in the country this year, behind the Ford F-Series, Chevrolet Silverado, Ram Pickup and Toyota Rav4. Popular models like the Honda CR-V and Nissan Rogue trail the Model Y in the market.
WRAP STAR? TESLA SELLING COLOR WRAPS FOR MODEL 3 AND MODEL Y AT $7,500-$8,000
Tesla this month launched a new entry-level version of the Model Y with a base price of $43,990 that has rear-wheel-drive and a driving range of 260 miles per charge.
The Rav4 starts at $28,475, excluding delivery fees, and even the plug-in hybrid Rav4 Prime — which has an all-electric driving range of 42 miles and gets 38 mpg beyond that — slightly undercuts it at $43,440. But the list price only tells part of the story.
The Model Y currently qualifies for the full $7,500 federal tax credit, which reduces that to $36,490 before the state incentives are applied in the 11 states that offer them.
New York has a $500 rebate that cuts it to $35,990, while Pennsylvania’s is $2,000 and gets it down to $34,490.
But the biggest benefit comes in Colorado. It offers a $5,000 credit for a bottom line of $31,490, which is just $15 more than the standard $31,475 Rav4 Hybrid.
TESLA WARNS CUSTOMERS THAT THE MODEL 3 WILL COST MORE SOON
Unfortunately, for comparison shoppers, the discounts only apply to residents, so you can’t go shopping across state lines for a deal. All of the programs also work in different ways and aren’t always as simple as driving out of the dealer with cash on the hood.
That’s going to change for the federal credit next year when it becomes a point of sale incentive for those who qualify that registered dealers will be able to instantly deduct from the up front price being paid, rather than requiring buyers to file for the credit on their subsequent tax return.