Tesla's EV Tax Credit Loophole: Navigating New Regulations

Tesla's EV Tax Credit loophole allows buyers who purchased an electric vehicle before October 1, 2023, to qualify for the $7,500 tax credit, even if the vehicle is not delivered by that date. Buyers must have a binding written contract and an initial payment made by September 30.

However, they must take delivery of the vehicle by December 31, 2025, to secure the tax credit. This situation has created uncertainty for many Tesla buyers, particularly those waiting for specific trims like the Model Y Performance, as some deliveries are scheduled for January 2026.

Ford and GM are also adapting by purchasing electric vehicles to sell to dealers at a discount, resulting in potential lease deals for customers through December 31, 2025. The IRS has indicated that the portal for claiming the tax credit may close at the end of the year, putting buyers in a difficult position regarding their eligibility for the credit when filing tax returns for 2025.