California’s Tesla-Loving Residents Face Massive Price Increases

Tesla’s Model 3 is a very popular vehicle. One may argue that the tiny EV serves as the face of entry-level luxury electric vehicles. Alternatively, the same might be stated about the Tesla Model Y.

And it isn’t easy to imagine a state where these two automobiles are more popular than California. We’ve witnessed it ourselves, with nearly every fifth vehicle passing being one of the two T-branded EVs.

That has shifted from an advantage to liability for Tesla. Model 3 and Y are no longer qualified for California’s largest electric vehicle subsidy. Both are not eligible for California’s Clean Vehicle Rebate Program. It follows a price increase for the Model Y and Model 3.

The justification for the exclusion is straightforward. The CVRP list includes vehicles with a maximum manufacturer’s suggested retail price of $45,000 for automobiles, as determined by the EPA’s vehicle class rules. Not only does the Model 3 fit that description, but its MSRP has already surpassed $45,000.

The Tesla Model Y’s journey is similar, except for the class and MSRP criteria. As defined by the EPA’s vehicle class criteria, SUVs cannot have a manufacturer’s suggested retail price of more than $60,000.

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There is a glimmer of hope here for owners and those with reservations. CVRP eligibility is also limited by purchase date.

Therefore, customers who made a reservation or took delivery before March 15 are still entitled to the $2,000 rebate. However, let us not minimize the significance for the EV maker.

Not only is Tesla headquartered in California, but a sizable portion of its vehicles are sold there, in part because the incentives and deductions associated with owning one were so appealing to purchasers until recently. Now, a portion of that has been eroded.

Recently, the brand has dogged by contentious choices, recalls, and dependability difficulties. Tesla may reclaim the Model 3 and Model Y eligibility by lowering their costs. As of the right moment, no such modification has occurred.