Federal Tax Credit (Lease)

For Tesla leases, the federal tax credit goes to:

Tesla

(not you โ€” but it lowers your payment)

Tesla captures the $7,500 federal tax credit and uses it to reduce your lease payment. You don't file for it on your taxes. The amount of savings varies by model and term.

Model 3 lease without credit: $614/mo (est)
With $7,500 credit applied: $564/mo

Find Your State Incentives

Select your state to see available rebates for Tesla leases:

Top State Incentives at a Glance

California
$1,000โ€“$2,000
+ utility rebates
Colorado
$2,500
tax credit
New York
$500โ€“$2,000
Drive Clean
New Jersey
$2,000โ€“$4,000
+ no sales tax
Massachusetts
$3,500
MOR-EV
Connecticut
$2,250
CHEAPR
Oregon
$2,500
standard
Washington
$0 state
utility rebates only

Utility Company Incentives

Many electric utilities offer additional rebates for EV leases. Here are some of the largest:

Utility Service Area Rebate Amount
PG&E Northern CA $800
SCE Southern CA $1,000
SDG&E San Diego $1,000
Xcel Energy CO, MN, NM $1,500โ€“$3,500
National Grid MA, NY, RI $1,000
Con Edison NYC area $500
Austin Energy Austin, TX $1,200

How Incentives Apply to Leases

๐Ÿ“‹ Important

For leases, incentives work differently than purchases:

  • Federal tax credit: Goes to Tesla (as lessor), used to lower your payment
  • State rebates: May go to you directly or to Tesla โ€” varies by state
  • Utility rebates: Usually go to you after lease is signed
  • Sales tax exemptions: Applied at signing, lowers your monthly payment

States with Sales Tax Exemptions for EV Leases

State Benefit Monthly Savings (Model 3)
New Jersey No sales tax on EVs ~$40
Washington No sales tax (until July 2025) ~$45
Oregon No state sales tax (all vehicles) ~$35
Maryland $3,000 excise tax credit ~$25

Income-Qualified Programs

$9,500
CA Clean Cars 4 All
$5,000
MA MOR-EV+ (income-based)

Several states offer enhanced rebates for low-to-moderate income households. Check your state's program for income limits.

Frequently Asked Questions

Do I get the $7,500 tax credit on a Tesla lease?

No โ€” Tesla receives the credit and uses it to lower your monthly payment. You don't file for it on your taxes.

Can I combine state and federal incentives?

Yes. Federal credit is built into the lease, and state rebates can be combined (depending on the program rules).

Do utility rebates apply to leases?

Usually yes. You apply after taking delivery. Check your utility's specific rules.

Which state has the best Tesla lease incentives?

California and New Jersey consistently rank highest due to rebates + sales tax exemption.

Do I need to apply for state rebates before leasing?

Some require pre-approval, others are after purchase. Check each program's timeline.

Sources: DSIRE database, state energy office websites, utility company EV pages. Current as of March 2026. Incentives subject to change and funding availability.