On its website this week, Tesla said that based on new guidance under the U.S. Inflation Reduction Act, its Model 3 Rear-Wheel Drive and Long-Range vehicles will lose up to US$7,500 federal tax credit from December 31.
Earlier this month, the U.S. Treasury issued guidelines on new battery sourcing restrictions aimed at weaning the U.S. electric vehicle (EV) supply chain away from China, which will take effect on January 1, 2024.
“Tax credit will end for Model 3 Rear-Wheel Drive and Model 3 Long Range on December 31, 2023, based on current view of new IRA guidance. Take delivery by December 31 for full tax credit,” the company added.
In April 2023, the Treasury said new guidelines will cut credits for Tesla’s Model 3 RWD by half to $3,750, but that other Tesla models will retain the entire benefit.
In July, Tesla said the $7,500 federal tax credits for its Model 3 EV will likely be reduced after December 31.
The U.S. EV credit currently requires 50 percent of the value of battery components to be produced or assembled in North America to qualify for $3,750 of the credit and 40 percent of the value of critical minerals sourced from the U.S. or a country that has a free trade agreement with Washington.
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