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
Elon Musk’s surprise addition to the X Takeover lineup has fans talking
Elon Musk will join Saturday’s X Takeover at Giga Texas for a live virtual interview.
Elon Musk will join X Takeover at Giga Texas on Saturday for a live virtual interview, according to Sawyer Merritt, who shared the news late Thursday. Musk will not be on stage in Austin. The conversation is set to stream for free on the @teslaownersSV account on X.
Organizers had kept expectations in check. In a September update, Tesla Owners Silicon Valley said Musk had appeared at the event twice before but was not promising a third appearance, even as fans hoped he would walk the Giga Texas grounds in person. A virtual spot matches 2024, when Musk gave a surprise interview of about an hour to the crowd in San Luis Obispo, as Teslarati reported at the time.
Wasn’t expecting this 🫡
— Tesla Owners Silicon Valley (@teslaownersSV) October 9, 2026
This year’s edition is a first in several ways. It is the first X Takeover held outside California and the first at a Tesla facility, with tickets selling out in eight days. Tesla provides the venue, but the event is produced independently by Tesla Owners Silicon Valley. The main event runs from 10 a.m. to 6 p.m. CT, followed by a drone and light show at 9 p.m. Maye Musk is the keynote speaker, Franz von Holzhausen is set for a virtual keynote, and Nicki Minaj is the special guest. Joe Tegtmeyer, whose drone footage Teslarati used to track the Optimus factory steel frame at Giga Texas, is also on the speaker list.
Musk’s interview topics have not been revealed, but the backdrop is busy. Tesla doubled its Cybercab fleet in Austin in late September, and last week Musk explained why Robotaxi hours only moved from 10 p.m. to 11 p.m.. Merritt also reported Thursday that Texas DMV records now show 319 registered Cybercabs, up from 169. NHTSA’s deadline for Tesla’s sworn answers on Cybercab certification is October 30, and Tesla reports third quarter earnings on October 21.
Fans who cannot make it to Austin can watch the livestream on X. Musk tends to say more in unscripted settings than he does in prepared remarks, which is the reason this one is worth having open on Saturday.
Elon Musk
Elon Musk’s Boring Company lands a new Middle East deal, and Nashville is about to get faster
The Boring Company signs Abu Dhabi tunnel agreement while adding more Prufrock machines in Nashville.
The Boring Company has signed an agreement with Abu Dhabi to study underground transport and utility tunnels across the emirate, adding a second UAE city to its pipeline as it prepares to also scale up tunneling back home in Nashville.
The deal was signed Thursday at the Liveability and Investment Exhibition (LIVEX 2026) by Boring Company President Steve Davis and Maysarah Mahmoud Salim Eid, director general of the Abu Dhabi Projects and Infrastructure Centre (ADPIC), according to the Abu Dhabi Media Office. Mohamed Ali Al Shorafa, chairman of the emirate’s Department of Municipalities and Transport, attended the signing.
Under the agreement, the two sides will assess feasibility, delivery and operating models for tunnels that could carry passengers or utilities. They will also look at Abu Dhabi’s potential as a regional hub for tunneling work. The current phase is exploratory, and no construction commitment or project budget has been announced.
“Abu Dhabi provides an ideal environment to explore the next generation of underground infrastructure solutions, supported by its ambitious growth vision and strong commitment to advanced technologies,”
Davis said. He added that the company wants to assess how tunnels can “expand urban capacity more efficiently, and enable better use of available space.”
The timing lines up with the money, considering last month, The Boring Company closed a $3 billion Series D led by the UAE and affiliated investors, valuing the company at $23 billion, as Teslarati reported. That round came with a commitment to build more than 150 kilometers of tunnel across the UAE, separate from the Dubai Loop pilot already under contract with Dubai’s Roads and Transport Authority. That pilot covers 6.4 kilometers and four stations linking DIFC and Dubai Mall at a cost of about $154 million.
Back home, The Boring Company projects in Nashville are also scaling up, with the company telling local NewsChannel 5 that a third Prufrock machine could start digging the Music City Loop in late October. A fourth is also targeted before the end of the year. Two machines are already mining Nashville limestone at the same time, and work is underway on a new launch site for the third.
The company said it has made more than 300 design and performance upgrades to its original Nashville machine. It is also working with property owners on more than 40 planned stations, with approvals in place for a future Nashville International Airport connection, a downtown station near the Music City Center, and stops at residential towers and the JW Marriott.
Construction on the Music City Loop began the same evening Tennessee and federal regulators approved the project’s lease in February, and the company targeted its first operational segment for late 2026. Back in Las Vegas, The Boring Company has said it plans to double its Vegas Loop station count by year’s end.
Lifestyle
Tesla FSD changed its mind mid-intersection, and it may have saved a life
Tesla shares dashcam footage of FSD Supervised stopping mid intersection to avoid a T-bone crash.
Tesla is putting another Full Self-Driving save in front of its 24.8 million followers on X.
On Tuesday morning, Tesla’s main account shared a dashcam clip with the caption “FSD Supervised preventing T-bone crash.” The footage came from an owner posting as TheNewGrid, who described what happened at a stop sign: “I looked at the car coming to the stop sign figured they would stop, my car went, then came to a stop mid intersection as they flew by. Had I been manually driving this would have resulted in a crash.”
The sequence is the notable part. FSD had already started crossing when the other driver ran the stop sign. Instead of pressing on, the car braked hard in the middle of the intersection and let the crossing vehicle pass in front of it. By the owner’s own account, they had made the same assumption the software initially made, that the other car would stop, and would not have corrected in time.
FSD Supervised preventing T-bone crash
— Tesla (@Tesla) October 6, 2026
The clip is the latest in a run of safety posts Tesla has amplified over the past several days. On Saturday, the company shared a video from Selling Sunset star Jason Oppenheim, who sold his Bentley for a Model Y and said he was buying Teslas with FSD for 10 of his employees. Ashok Elluswamy, who leads Tesla AI, followed up by writing that Tesla self-driving “reacts to other people cutting into your path with super-human response times.” On Monday, a Cybertruck owner posted footage of FSD moving across three lanes from a red light to clear a path for an ambulance approaching from behind.
This recent clip also lands a few weeks after Tesla began shipping Automatic Collision Evasion with FSD v14.3.9, a feature that can activate FSD on the driver’s behalf when a frontal collision is imminent or the driver appears distracted. Elluswamy said in September that “even earlier prediction of hazards, even faster reaction time and overall significantly better safety and collision avoidance” are coming with v15, the release Tesla has tied to round the clock Robotaxi operation.
The safety messaging matters beyond social media. Tesla has said FSD Supervised was 4.1 times less likely to crash than manual driving across 100 million kilometers on European roads, and it has been putting those figures in front of regulators. Eight EU countries have now approved FSD Supervised, with Croatia the most recent, but the EU’s bloc-wide vote originally set for October 6 has been pushed to December at the earliest.
FSD Supervised is still a Level 2 system, and the driver remains responsible at all times. Even heavy users find reasons to step in. Teslarati’s Joey Klender, who uses FSD for about 76 percent of his driving, laid out five recurring issues on Tuesday that still prompt him to intervene. Clips like this one show the other column of that ledger: moments where the software caught a mistake a human was about to make.
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