Lifestyle
What Tax Incentives Are Available When Buying My Tesla?
There are a number of tax incentives available when purchasing your Tesla depending on which model you choose and where you live. Here’s my overview of incentives available to US residents. Please note that I’m not a tax advisor, so be sure to do your own research and consult a tax professional.
Federal Tax Incentives
When I purchased my Tesla Model S back in 2014, I received a $7,500 Federal tax credit, an incentive that’s still available to new car buyers as of today (not available to CPO models). But what are the rules behind it and what does the credit mean to me?
According to the Internal Revenue Code Section 30D entitled “Plug-In Electric Drive Vehicle Credit”,
For vehicles acquired after December 31, 2009, the credit is equal to $2,500 plus, for a vehicle which draws propulsion energy from a battery with at least 5 kilowatt hours of capacity, $417, plus an additional $417 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours. The total amount of the credit allowed for a vehicle is limited to $7,500.”
The smallest size battery for the Model S, at the time of this writing, is 70 kWh and will max out the federal credit at $7,500, not to be mistaken for a rebate or refund.
Too bad there’s a $7,500 cap! Just for fun, and assuming there weren’t a cap, a 70 kWh Model S would receive $417 for every kWh exceeding 5 kWh resulting in over $27,000 in tax credits! A 90 kWh Tesla would receive an additional $8,340 in credits making for a grand total of over $35,000 in tax credits.
These credits are issued by the Fed to incentivize adoption of clean energy vehicles and will go into a phase out period once 200,000 vehicles are manufactured by that automaker.
Qualified Plug-In Electric Drive Motor Vehicle Credit (IRC 30D) Phase Out
The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period.
With Tesla’s leading production and sales figures, it will be interesting to see what happens to Federal incentives once Tesla crosses the 200,000 vehicles manufactured threshold.
There are implications on which year the tax credit applies to based on when you took delivery of your vehicle. If you were one of the lucky people that took delivery of a Model X in 2015, be sure to have read the fine print on IRC 30D when you file your taxes.
State Incentives
In addition to the Federal tax credit, some states offer state rebates for qualifying battery electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV) purchases. The following states provide BEV incentives in the form of a refund for your qualifying purchase of a Tesla:
- California – $2,500
- Delaware – $2,200
- Colorado – $6,000
- Louisiana – $8,000
- Massachusetts – $2,500
- Maryland – $3,000
- Pennsylvania – $2,000
- Tennessee – $2,500
- Utah – $1,500
Note that each one of these programs can have its own nuances. There are minimum ownership periods (3 years in Massachusetts), income caps ($500K for joint filers in CA) and other qualifying circumstances to consider. Before you count your money, check the rules for your specific state and make sure you qualify.
For example, when I purchased my Model S in 2014 the current MA state tax credit was no longer available. Since then it’s been put back in place. That was certainly bad timing on my part!
Business Deductions
The door sticker of Model X VIN #001, owned by Tesla CEO Elon Musk. Photo via Twitter, posted by @kalud.
You may have heard about a “$25,000 Hummer Tax Loophole” especially as it relates to the Model X, but what is that and does it apply to you?
Tax Section 179 allows businesses to take deductions for equipment and investments that are put into service. For vehicles, there’s a specific section that states cars used for 50% or more in your business can deduct up to $11,060, and slightly more for trucks.
SUVs or Crossover Vehicles with GVWR above 6,000 lbs. get an even larger deduction of $25,000. This is the “Hummer Tax Loophole” as the Hummer weighed in at somewhere around 6,500 pounds. GVWR is the weight of the vehicle with passengers and/or equipment. The Model X has a curb weight of 5,334 lbs. but it turns out that its GVWR is 6,768 pounds hence it qualifies for the Section 179 deduction.
That said, if you buy or lease a Model X and use it 50% or more for business you could deduct up to $25,000 in depreciation in the first year you acquire the vehicle versus depreciating it over time. The rationale is that businesses are incentivized to take the tax deductions up front there by allowing them to invest more into the business, earlier.
Note that the Section 179 deduction applies to both new and used vehicles, although I think we’ll see few used Model Xs in 2016.
Elon Musk
The Boring Company clears final Nashville hurdle: Music City loop is full speed ahead
The Boring Company has cleared its final Nashville hurdles, putting the Music City Loop on track for 2026.
The Boring Company has cleared one of its most significant regulatory milestones yet, securing a key easement from the Music City Center in Nashville just days ago, the latest in a series of approvals that have pushed the Music City Loop project firmly into construction reality.
On March 24, 2026, the Convention Center Authority voted to grant The Boring Company access to an easement along the west side of the Music City Center property, allowing tunneling beneath the privately owned venue. The move follows a unanimous 7-0 vote by the Metro Nashville Airport Authority on February 18, and a joint state and federal approval from the Tennessee Department of Transportation and the Federal Highway Administration on February 25. Together, these green lights have cleared the path for a roughly 10-mile underground tunnel connecting downtown Nashville to Nashville International Airport, with potential extensions into midtown along West End Avenue.
Music City Loop could highlight The Boring Company’s real disruption
Nashville was selected by The Boring Company largely because of its rapid population growth and the strain that growth has placed on surface infrastructure. Traffic has become a persistent problem for residents, convention visitors, and airport travelers alike. The Music City Loop promises an approximately 8-minute underground transit time between downtown and the Nashville International Airport (BNA), removing thousands of vehicles from surface roads daily while operating as a fully electric, zero-emissions system at no cost to taxpayers.
The project fits squarely within a broader vision Musk has championed for years. In responding to a breakdown of the Loop’s construction costs, Musk posted on X: “Tunnels are so underrated.” The comment reflected a longstanding belief that underground transit represents one of the most cost-effective and scalable infrastructure solutions available. The Boring Company has claimed it can build 13 miles of twin tunnels in Nashville for between $240 million and $300 million total, a fraction of what comparable projects cost elsewhere in the country.
Image Credit: The Boring Company/Twitter
The Las Vegas Loop, The Boring Company’s first operational system, has served as a proof of concept. During the CONEXPO trade show in March 2026, the Vegas Loop transported approximately 82,000 passengers over five days at the Las Vegas Convention Center, demonstrating the system’s capacity during large-scale events. Nashville draws millions of convention visitors and tourists each year, and local business leaders have pointed to that same capacity as a major draw for supporting the project.
The Music City Loop was first announced in July 2025. Construction began within hours of the February 25 state approval, with The Boring Company’s Prufrock tunneling machine already in the ground the same evening. The first operational segment is targeted for late 2026, with the full route expected to be complete by 2029. The project represents one of the largest privately funded infrastructure efforts currently underway in the United States.
Elon Musk
Elon Musk’s $10 Trillion robot: Inside Tesla’s push to mass produce Optimus
Tesla’s surging Optimus job listings reveal a company sprinting from prototype to one million robot production.
Tesla is accelerating its push to bring the Optimus humanoid robot to high volume production, and its recent job listings tells the story as clearly as any earnings call.
With well over 100 Optimus related job openings now posted across its U.S. facilities, Tesla is signaling a critical pivot for the program, moving it from a captivating tech demo to a serious manufacturing endeavor. Roles span the full spectrum of the product lifecycle, from Robotics Software Engineers and Manufacturing Engineers to Mechanical Integration Engineers and AI Engineers focused on world modeling and video generation. One active listing for a Software Engineer on the Optimus team asks candidates to build scalable and reliable data pipelines for Optimus manufacturing lines and develop automation tools that accelerate analysis and visualization for mass manufacturing.
Tesla is racing toward a one million unit annual production target. The clearest signal yet that Tesla is treating Optimus as its primary business came on January 28, 2026, during the company’s Q4 2025 earnings call. Musk announced that Tesla is ending production of the Model S and Model X, and will repurpose those lines at its Fremont, California factory to build Optimus humanoid robots.
A production intent prototype of Optimus Version 3 is planned to be ready in early 2026, after which Tesla intends to build a one million unit production line with a targeted production start by the end of 2026. To support that ramp, Tesla broke ground on a massive new Optimus manufacturing facility at Gigafactory Texas in late 2025, with ambitions to eventually reach 10 million units per year.
Tesla Giga Texas to feature massive Optimus V4 production line
The business case for scaling this aggressively is rooted in labor economics. Musk has stated that “Optimus has the potential to be the biggest product of all time,” reasoning that if Tesla can produce capable humanoid robots at scale and reasonable cost, every task currently performed by human labor becomes a potential application. In a separate statement, Musk framed Optimus’s long term importance even more bluntly, saying it could surpass Tesla’s vehicle business in scale with the potential to generate $10 trillion in revenue.
The industries Tesla is targeting first are those most burdened by repetitive physical labor. Early applications include manufacturing assembly, material handling and quality inspection, as well as logistics tasks like loading, unloading, sorting, and transporting goods in warehouses and distribution centers. Longer term, Tesla’s vision is for Optimus to penetrate household, medical, and logistics scenarios at the scale of a smartphone rollout.
Elon Musk
Elon Musk’s Boring Co. Tunnel Vision Challenge ends with a surprise for Louisiana, Maryland and Dallas
The Boring Company stunned three cities today, awarding New Orleans, Baltimore, and Dallas free underground Loop tunnels.
Elon Musk’s The Boring Company (TBC) announced today that it is building free underground Loop tunnels in three American cities: New Orleans, Louisiana; Baltimore, Maryland; and Dallas, Texas. The company had promised one winner when it launched the Tunnel Vision Challenge in January. After receiving 487 submissions, it selected three, committing to fund and construct all of them pending a feasibility review, entirely at its own expense. For a company that has faced years of skepticism over the gap between its promises and its delivered projects, choosing to expand its commitment rather than narrow it is a notable shift in both scale and accountability.
All three projects will now enter a rigorous, fully funded diligence phase that includes meetings with elected officials, regulators, community and business leaders, geotechnical borings, and a complete investigation of subsurface utilities and infrastructure. TBC confirmed that all costs associated with this diligence process are 100% funded by the company. If all three projects pass feasibility, all three get built. If only one clears the bar, that one gets built. The company’s willingness to fund the due diligence regardless of outcome removes one of the most common early-stage barriers that kills promising infrastructure proposals before they leave a spreadsheet.
Beyond the three winners, TBC announced it will continue working with two additional entrants it found compelling enough to pursue independently: the Hendersonville Utility Tunnel in Hendersonville, Tennessee, and the Morgan’s Wonderland Tunnel in San Antonio, Texas, which would notably serve one of the nation’s premier theme parks built specifically for guests with special needs.
The challenge also coincides with TBC’s most active construction period to date. The company recently began drilling on the Music City Loop near the Tennessee State Capitol in Nashville, and in February it broke ground on a Loop in Dubai. Musk has long argued that the fundamental problem with urban infrastructure is cost and bureaucratic inertia, not engineering. “The key to solving traffic is making going 3D either up or down,” he said in 2018, a conviction now reflected in a company structure built to absorb the financial risk that typically stalls public projects for years.
Music City Loop could highlight The Boring Company’s real disruption
The Tunnel Vision Challenge’s most underappreciated element may be what it produced beyond three winners. Submissions came from individuals, companies, and governments across states including Alaska, Arkansas, Colorado, Kansas, Louisiana, Maryland, New York, and Texas, as well as from international entrants. Musk captured the underlying logic years ago when he said, “Traffic is driving me nuts. I’m going to build a tunnel boring machine and just start digging.” Today, three American cities are counting on exactly that.
Tunnel Vision Challenge results!
We’ve been overwhelmed with the amazing submissions…so we are announcing three winners!
The Thrilling Three are:
– NOLA Loop (New Orleans, LA)
– Ravens Loop (Baltimore, MD)
– University Hills Loop (Dallas, TX)What happens next? TBC and the… https://t.co/cY2ULftfiK
— The Boring Company (@boringcompany) March 24, 2026
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