One of the biggest reasons the $7,500 Federal point of sale EV rebate will be a huge deal, especially for Tesla, is that starting January 1, 2024, people in the U.S. will be eligible for the rebate regardless of their tax burden. This is a major change from 2023, when the tax credit was non-refundable.
What does this mean? Well, in 2023 the EV tax credit only benefited buyers who had a federal tax liability large enough to claim the full $7,500 credit. This diluted the benefit for lower income households, or excluded some buyers entirely if their tax burden was too low.
Come January 1, 2024, the playing field will be leveled. The POS rebate removes the tax liability requirement, making the incentive more accessible and EVs more affordable for all consumers. The same income limits from 2023 will still apply, but the barrier around tax burden will be eliminated.
How will this impact Tesla specifically? Tesla buyers have been excluded from claiming any federal tax credit in 2022 and 2023 due to Tesla hitting the 200,000 vehicle cap for the previous credit. The point of sale structure changes this. Now, Tesla buyers can benefit from the $7,500 instant rebate at time of purchase, just like any other EV.
This evens the playing field versus competitors like Ford who have benefited from the tax credit over the past two years. It also makes Teslas more affordable right off the bat, which could increase demand. Some analysts think the rebate could boost Tesla sales in the U.S. by over 20% in 2024.
The rebate will also help spur overall EV adoption. With the incentive instantly applied, more buyers may be persuaded to go electric. Cox Automotive estimates EV sales could double in 2024 with the rebate compared to 2023 levels.
In summary, the POS rebate stands to be a huge catalyst for EV adoption, especially benefiting Tesla with its broad access and instant savings. The $7,500 reduction can make an EV purchase more feasible for buyers of all tax brackets. Expect to see EV demand, and Tesla demand, surge when this incentive takes effect in 2024.