Tesla Model Y lease offer of $207/month goes live in WA as New Jersey introduces EV sales tax

Buying an electric vehicle in the US is an intricate mess of both federal and state incentives, some of which contradict each other.

The state of New Jersey, for example, just announced that it will be removing its zero EV sales tax incentive, and introduced a 3.31% tax on each electric car purchase. The New Jersey EV sales tax will go into effect on October 1, so Tesla advises taking delivery before September 30 there.

On the other hand, the 3.31% state tax in EV sales is half of what gas-powered car purchases are taxed with. Moreover, the state's $2,000 Charge Up incentive will stay, so for any electric car under $60,430, the buyer is still net positive on the purchase. New Jersey intends to have another $2,000 "Charge Up+ incentive, which opens in fall 2024," which will change the calculation once again.

Other states like Washington, however, not only still waive sales taxes on electric vehicles, but have now introduced new generous discounts. Those can bring the Tesla Model Y price to that of the rumored Model 2 mass market Tesla vehicle, or theoretically to a lease payment of just $207/month for inventory vehicles.

Starting this month, qualifying WA state residents can apply for $9,000 EV Instant Rebate that is on top of that stackable with any federal tax credit incentives. When the government's $7,500 tax credit plus the $2,924 forfeit of WA sales tax are applied, this effectively brings the price of a base Model Y in the elusive Model 2 category.

There are caveats, though, mainly income eligibility criteria, as well as at least a 3-year lease:

Washington residents earning up to $45,180 annually for a single person or $93,600 for a family of four, are eligible to receive up to $9,000 for a new EV lease of three years or more, or up to $5,000 for new EV purchases or two-year leases. Used EVs are also eligible for a $2,500 rebate on both purchases and leases.

Elon Musk opined on the generous WA state offer, saying that "incentives for EVs exist in many states, but seem to be seldom used." "Maybe lack of awareness or excessively paperwork and requirements," he added. Elon is seemingly not wrong, and not just because of the income eligibility criteria.

The WA State Commerce Department explicitly says that "the dealer deducts the applicable rebate amount from the cost of the lease and then applies dealer, state and local fees to arrive at the total lease amount. " The Department's calculations say that this could bring a 3-year Tesla Model 3 lease to $127/month and a Model Y lease to $207/month.

A Tesla buyer who tried to claim the $9,000 rebate had it applied by the dealer to the actual vehicle price beforehand, and not to the lease or down payments advertised, thus pocketing a large part of the credit. They have now contacted the state's Commerce Department, which plans to hold an emergency meeting to remedy the situation. 

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