Doing complex math and tax work is not something I find exciting. Buying a brand-new car for under $15,000 sounds like a blast though. It also seems like a mythical impossibility, but it turns out, if you’re capable of jumping through several hoops, it’s possible if you live in Colorado.
Late yesterday, notable Tesla investor Sawyer Merritt pointed out just how many tax incentives the state provides for electric vehicle buyers and how they affect the final price of the Tesla Model 3 Long Range Rear-wheel drive.
According to his calculations, the final amount paid for the car could end up being as little as $12,140. Add in hypothetical savings on gasoline (which is a little silly, but is what Tesla does on its own website when calculating the cost of the car) and that figure drops to under $8,500, he says. That’s an insane price for an objectively decent car. Here are all the hoops one must fit through to get that sort of deal.
Last night, I was talking with someone that lives in Colorado who qualifies for all the state's EV incentives. If they refer 10 people with Tesla's new referral program and use the $1k loyalty discount, they will be able to get a brand new Model 3 LR RWD for just $12,140. Add in… pic.twitter.com/yLCdTDsq1Y
— Sawyer Merritt (@SawyerMerritt) August 29, 2024
First, again, it’s vital that you live in Colorado. Somehow not even California offers the same hefty incentives that the Centennial State does. Those who buy a new EV in the state get $5,000 in tax credit so long as the car has an MSRP of less than $80,000.
Interestingly, buyers who get a qualifying EV with an MSRP under $25,000 (an actual mythical car that doesn’t exist right now) could get $7,500 back, but even if the car costs 40,000 for example, you’ll get $7,500 off thanks to a Federal tax credit and another $5,000 off with Colorado’s tax credit.
Next, you’ll want to have a deal in place to get your household energy from Xcel or Black Hills Energy. Both will provide up to a $5,500 discount if you meet certain criteria. Option one is to meet a qualified income bracket, 60 percent of the state’s median income, 200 percent of the relevant federal poverty line, or 80 percent of the area’s median income.
Buyers are also automatically approved if they’re already enrolled in one or more of several assistance programs in the state such as Colorado’s Weather Assistance Program, Supplemental Nutrition Assistance Program, or Colorado’s Low-Income Energy Assistance Program.
Next, let’s consider that buyers can get another $6,000 off if they trade in an eligible old or “high emitting” vehicle. To check those boxes one needs to trade in any vehicle 12 years old or older or trade in one that fails Colorado’s emissions testing.
I’m not suggesting fraud here but failing an emissions test in Colorado is pretty simple. A check engine light, an exhaust leak, or really any exhaust modification could fail a car. In addition to that requirement, the buyer has to have a household income of below 80 percent of the area median income or again, be a part of any of those assistance programs mentioned above.
So let’s regroup and consider where we’re at. Clearly, household income is going to play a huge role here, so if you’re doing well enough to be above 80 percent of the median income in your area of Colorado, then these incentives won’t be available.
That said, those who do need a little extra help have these options to choose from, and in total could see $24,000 lopped off of the cost of a brand new EV. For the Tesla Model 3 LR RWD Merritt mentions that would drop its price down to just $18,490.
How does he get to his figure of $12,140? First, the buyer in question gets a $1,000 discount if they have already bought a Tesla in the past. That qualifies them for a Loyalty discount.
Second, they need to give their referral discount code to ten people who will buy a Tesla. For each of those ten friends, they’ll get $500 worth of credit with the automaker. That’s an additional $5,500 off between the two.
Now we’re down to just $12,990 for a brand-new Tesla Model 3. Merritt’s post also shows a slightly different amount, $5,350 for the Colorado state tax incentive but as of this writing, the figure Colorado actually lists online is $5,000.
That said, we’re still under $15,000 for a brand-new car, and we’re not accounting for gas savings yet either. That’ll depend completely on each use case, but the end result is the same; those who want an inexpensive EV might want to find a Colorado-based friend you can live with for a while.
that dudes one of the most unbearable tesla shills on the planet. and thats saying something. but yeah colorado does have tons of rebates. thats how the tfl guys got a leaf lease for 9$ a month.
Wanna come to Sex Hole? C’mon, everybody loves Sex Hole!
Mmmm…sounds like church (MLM).
So if I create a very low income corporation/person legal entity can my corporation/person buy it and hire me as a chauffeur?
So, to get the $1000 owner loyalty discount along with all of the income-based tax credits, we’re looking for the unicorn who is both low income AND a prior Tesla buyer?
I’m gonna need a better accountant….
I live in CO and as others have stated this is a lot of incentives that most people will not qualify for. But you can get a Nissan Leaf lease for dirt cheap with just the Federal and State rebates, along with Nissan’s own rebates currently. The dealer near me is advertising $50 down and $50 a month for 2 years, which comes down to under $1,500 for the lease term. Of course with taxes and fees I got an actual quote that ended up being $2,500 which is still pretty good. It would be a 4th car for me and with insurance just doesn’t make sense, but if I needed a second car for around town that’s a great deal. They left me a voicemail that they would honor the $1,500 all in price so maybe you can actually get that which would be an insane deal.
Do those 10 Tesla friend/buyers actually have to buy the car? I mean, I know a lot of people, but I will NEVER know 10 people who will buy a Tesla, after me. This is oneof those “in theory” moments. When, in reality it never happens. Maybe to 5 people?? And, in that case, you may as well just give those 5 people a Tesla for free, cause it’s a drop in the bucket, and they could probably use it more than the effort to go through all this.
I once ordered all the gas saving gadgets from J C Whitney and put them on my car. Had to stop every couple hundred miles and drain the tank to keep it from over flowing.
You can get a Tesla for for $12k the same way I can get a Blackwing for $15 if all of you pitch in between $1 and $80,000 dollars.
“but is what Tesla does on its own website”.
If what Musk and Tesla do is the threshold for this exercise, then you’re all doing it wrong. These cars are free. Actually, you will make money from them once they push out Level 4 autonomy to them because you can then rent them out as robotaxis or sell them at 10x their cost.
So leave the gas cap loose when I go to trade in the previous vehicle. Got it.
1000 + 500 * 10 = ??? 😛
Just to make this easier to understand than trying to keep a mental tally while reading the article:
That being said, lots of these aren’t completely mutually exclusive, but someone that qualifies for the energy supplier incentive has to be below certain income limits, which likely means they make too little (and thus pay too few taxes) to get the full tax incentives. So the number of people that actually eligible for the full $24,000 in incentives above, is probably near zero.
Still good incentives prospective buyers should look into though, especially if you live in Colorado.
I agree that almost no one will qualify for all rebates, but the Income qualified rules are not that low. you just need to be below 80% of the county mean income (AMI). here is the examples of 80% AMI of some of the higher counties in the state. not exactly poverty levels to qualify.
Denver County: Individual $73,040 or Family of 4: $104,320
Boulder County: Individual $81,760 family of 4: $116,800
Summit County: Individual $68,240 family of 4 $97,440
Is that supposed to be high for a family of four? Those are relatively low for a family of four. I’m not claiming those are poverty levels, but I’m framing them in the sense of someone that has a $7,500 federal tax liability or a $5,000 state tax liability. Colorado has a flat 4.4% flat income tax; by the time you do standard deductions for a family of four, they are paying at most $4,000. That’s the absolute most.
The sales sheet above showed the CO state tax discount was refundable, as should be the federal (or able to be spread over a few years.)
Seems like a Ponzi Scheme to me. though I would perhaps consider a new tesla at that money. just not sure the paperwork, hassle and probably long hours on a phone to an inept state official to actual make it happen would be worth it in the end.
Can you resell them the next day?
there is also a loophole for a used EV to get the $5k state rebate. I bought one which met this criteria.
A motor vehicle that has been used by a dealer for the purpose of demonstration to prospective customers is considered new unless such demonstration use has been for more than 1,500 miles.
https://tax.colorado.gov/sites/tax/files/documents/ITT_Innovative_Motor_Vehicle_Credit_Feb_2024.pdf
Other than some scammers, who are already scamming food stamps, that will try to flip them or something, who is this for/going to help? Because, this makes zero sense for an actual struggling poor person.
The main case I could think of is for an Uber / Lyft driver who wants to finance a nicer ride for their job (presumably lower income + incentive for a car that’s easy to drive all day)
It actually sort of does – though an actual struggling poor person isn’t going to get the previous Tesla buyer discount – and, in fact, would better served in a different brand.
Because America is the way it is, poor people still need cars to get to work. If you need a reliable car, or have a job that demands you have one – lots of jobs with mediocre-at-best pay still require reliable wheels – you’re going to want something new-ish and cheap.
Let’s say your local Hyundai dealer has a Kona EV and your old Tucson has just failed the emissions inspection. They usually have a bit of a loyalty incentive – or at least they do here in Canada, though it’s only $500. Pile on the incentives and you’re suddenly in a new, reliable car. I don’t know if Colorado is wired in for all the apartments to have a plug – they do get cold weather there, so maybe – but now you have a cheap commuter.
The Tesla math, like most Tesla math, doesn’t math – how does someone have both a trade-in a polluting car discount AND a previous Tesla owner discount? How is someone who is struggling going to know 10 potential Tesla buyers? But piling on incentives is basically why anyone with kids in a certain income bracket used to drive fairly new Dodge Journeys.
A teacher with a rich significant other may qualify.
It’s usually calculated with household income instead of individual.
A for effort?
I don’t live in CO so I’m not up on their specific incentives.
That what I was thinking too, if you are not married, but somebody else is paying a good chunk of the bills you might be able to qualify for the income based incentive (which if I am reading the article right is quoted at both 60% and 80% of median income).
I think I’d still take one of those leased Leafs for $19/month.