Tesla's two most popular EVs are no longer eligible for California's biggest plug-in rebate. According to a representative for the California Clean Vehicle Rebate Project (CVRP), the Model 3 and Model Y have been excluded from the program after last week's price increases that pushed both EVs above its MSRP caps.
For years, the Model 3 and Model Y have been eligible for the CVRP, currently worth $2,000 for most consumers. However, last week's Tesla price increases pushed the Model 3 above a revised MSRP cap of $45,000 for cars that rolled out in February, and the Model Y over an existing $60,000 cap on crossovers & SUVs.
Tesla customers who ordered their vehicle on or before March 15th will still be eligible for the $2,000 rebate. Everyone else stands to pay $2,000 more than they would have just last week. A CVRP representative confirmed for CarsDirect this morning that eligibility is based on the order date, not the delivery date.
To qualify for the CVRP, a California Air Resources Board spokesperson told us that eligibility is based on the MSRP of the base trim for a given EV not including destination. This is why a $70,000 Ford Mustang Mach-E GT Performance still qualifies since the cheapest Mach-E remains well below the $60,000 MSRP cap.
While the Tesla CVRP change may sound like bad news, it's actually even worse. This month, the cheapest Tesla saw a $2,000 price increase. Now that the $2,000 CVRP is gone, the car's effective purchase cost has gone up by $4,000. This could put a major dent in the budget of a potential buyer amid a gas price surge.
The CVRP rep we spoke with said the program has received a high volume of calls from Tesla buyers concerned about the changes. The news comes as EV-maker Polestar begins taking orders for the Polestar 2 Single Motor, its cheapest EV, which doesn't qualify for the CVRP but is eligible for a $7,500 EV tax credit.
Tesla's exclusion isn't permanent, but it would need to lower the base price of the Model 3 below $45,000. Sadly, there may be no reason to do so amid a chip shortage. It used to sell a cheaper version not listed on its website, but a Tesla representative confirmed for us that the "off-menu" car was discontinued in 2020.
