Tesla Tax Credits, Incentives & Rebates – 2025 Guide
Learn which Tesla vehicles qualify for federal and used EV tax credits in 2025 and discover top state-level incentives and timing strategies to maximize savings.
If you're buying a Tesla in 2025, there are still powerful incentives available—if you know where and how to look. But many of these credits are expiring soon. This guide breaks down everything from federal tax credits to state rebates, and how to lock in savings before they vanish.
Federal Tax Credits for New and Used EVs
The federal Clean Vehicle Tax Credit offers up to $7,500 for qualifying new electric vehicles, including select Tesla models like the Model 3 (Long Range, Performance), Model Y (all trims), Model X, and Cybertruck—so long as they meet battery sourcing and final assembly rules.
After September 30, 2025, the full credit will no longer be available—and may be eliminated entirely unless renewed by Congress.
For used EVs, there's a federal Used Clean Vehicle Credit up to $4,000 or 30% of the purchase price (whichever is less) if purchased from a licensed dealer for $25,000 or less.
How to Claim or Use These Credits
Buyers can either apply the credit to their tax return using IRS Form 8936 or transfer it directly to the dealer for an immediate point-of-sale discount—subject to eligibility and income limits.
State-Level Incentives to Maximize Savings
Beyond federal credits, many states and regions offer additional rebates—saving you even more on your Tesla:
- California: Clean Vehicle Rebate Project (CVRP) provides around $2,500 (varies by county), plus HOV lane access.
- Colorado: Offers instant grants up to $5,000 for EV purchases in some cases.
- Connecticut: Up to $3,000 rebate via the CHEAPR program.
- Delaware: $2,200 rebate for EV purchases or leases, plus $1,100 for EV conversions.
- Washington State: Offers low-income rebates up to $9,000 on leases or purchases, depending on eligibility.
Utility-Based Incentives: Remote and low-cost charging
Some utility companies offer additional rebates or lower rates for residential charging setups—paired incentives can bring your overall EV cost down significantly.
Final Word: Timing Is Everything
Federal incentives for Tesla vehicles expire September 30, 2025—so purchasing and taking delivery before then is crucial to capture the $7,500 new EV credit.
Used EV buyers have more timing flexibility—but also must meet vehicle and dealer-specific requirements. Act before the credits disappear, and stack both federal and state incentives to maximize your savings.