American electric automaker Tesla announced through its official website that the famous Model 3’s federal tax credit eligibility will drop from the full $7,500 to an undisclosed amount “likely after Dec 31.”
Interestingly, Tesla Model 3’s landing page was the only one with the notice. Its sibling Model Y also qualified for the full tax credit, does not display the same warning on its page.
“Customers who take delivery of a qualified new Tesla and meet all federal requirements are eligible for a tax credit up to $7,500. Reductions likely after Dec 31.”
Tesla
Possible reason for Model Y’s federal tax credit reduction
The Musk-led automaker omitted to explain the reason for the Tesla Model 3’s federal tax credit reduction starting next year.
However, it is worth noting that its Rear Wheel Drive variant, currently produced at the Fremont Factory, uses CATL-made lithium iron phosphate (LFP) cells.
A possible update on the Inflation Reduction Act’s battery standard might be the reason why Tesla predicts a tax credit eligibility reduction for the famous electric sedan.
Nonetheless, previous reports suggest that Tesla is already preparing to counter the reduction. The American EV giant is apparently planning to develop a North American battery factory with CATL, which has already been discussed with Biden’s Administration.
For context, the Tesla Model 3 RWD claims to have an EPA-estimated driving range of 272 miles. It also boasts a top speed of 140 mph and an acceleration of 0 to 60 mph in 5.8 seconds.
As for the pricing, the RWD variant costs $40,240 before incentives. The Long Range starts at $47,240, while the Performance costs $53,240.
See Also:
- Tesla updates referral program for new Model 3 and Y customers in US and China
- Tesla updates referral program for new Model 3 and Y customers in US and China
- Tesla updates referral program for new Model 3 and Y customers in US and China
- Tesla updates referral program for new Model 3 and Y customers in US and China
- Tesla updates referral program for new Model 3 and Y customers in US and China
If the speculated partnership between Tesla and CATL for a battery factory development materializes, it will enable the automaker to produce batteries in the US.
In effect, it would make its EVs fully eligible for the federal tax credits of up to $7,500 regardless if they use CATL’s LFP battery.
For now, interested buyers of the Tesla Model 3 better hurry up to get the full incentive before it changes next year.
