Tesla has just launched battery diversification for Model 3 and Model Y Long Range customers through its online configurator, specifying the supplier of each battery to indicate which units qualify for the federal tax credits in the United States.
US tax credit drives Tesla’s battery diversification
Tesla is now distinguishing its Model 3 and Model Y Long Range offerings between battery suppliers to help customers determine which units are eligible for up to $7500 in federal tax credits under the Inflation Reduction Act.
The IRA’s more stringent battery and component sourcing rules have been causing confusion, with eligibility changing even within Tesla’s electric vehicle lineup.
For instance, the cheaper Model 3 Long Range version was previously not eligible, while the more expensive Performance variant was. To help more buyers benefit from the federal tax credit, Tesla has come up with a unique solution.
The Musk-led company has added a new option on its website called “Tax Credit Eligible Vehicles.” This allows customers to choose a battery configuration that meets the requirements for the credit.
What’s the difference?
The newly launched toggle distinguishes the models with tax credit-qualified Panasonic cells from non-eligible LG cells, making it less confusing to customers.
Notably, the eligibility criteria for US customers are $150,000 in individual income or $300,000 for dual filers. So, if customers do not meet these standards, it only makes sense to choose the model that does not feature the eligible cells.
Panasonic vs. LG batteries
Tesla’s strategy to distinguish its Model 3 and Model Y Long Range variants can undoubtedly optimize access to the federal tax credit.
However, it also allows non-eligible customers to choose based on the battery cells.
While they are both non-LFP, 2170 cells, Panasonic cells are slightly better than the LG cells even without the tax credit. They can apparently charge a little faster at level 3 chargers than the LG cells. It is something customers must at least know before acquiring their Tesla EVs.
