Colorful Colorado is making it even cheaper to buy electric vehicles. A new bill more than doubles the available tax credit to a total of $5,000 whenever someone buys a new EV starting from July. It’s a big move that could put a number of new cars within reach of buyers.
Until now, new EV buyers could apply for a tax credit of up to $2,000. As of July 1st, 2023, that figure goes to $5,000 so long as the car itself doesn’t have an MSRP above $80,000. The state tax credit stacks on top of whatever federal tax credit one might get meaning the total savings could end up being $12,500.
Beginning in 2024, EVs with an MSRP under $35,000 will be eligible for an additional tax credit of $2,500 which could bring the savings up to $15,000 total so long as that same car qualifies for the full $7,500 federal tax credit. In theory, it could take a vehicle with an MSRP of $34,999 down to just $19,999. Theoretical prices are interesting but the real-world impacts loom large too.
More: How To Get A $7,500 Tax Credit On Almost Any EV Lease Thanks To An IRA Loophole
To put this into a bit of perspective it effectively makes the Tesla Model Y Standard Range a $34,990 car. Even the Long Range Dual Motor version comes in under $40,000. That’s quite an attractive price for Colorado residents. That last bit is key too. One must pay taxes in Colorado to qualify for the tax benefit.
Generally speaking, Colorado is quite friendly in terms of tax policy toward EV owners. It also offers up to $1,000 in tax credits for EV charging equipment, and at least $300 to anyone who buys an e-bike too.
Whether or not other states will follow is still up for debate. One thing is for sure. The $35,000 Tesla finally exists again… in Colorado only…. so long as Tesla doesn’t jack up pricing on the Model Y Standard Range before July 1st.
