Tesla Model 3 will lose federal tax credit

Tesla warns customers that two Model 3 variants will no longer qualify for up to $7,500 in incentives starting next year due to new battery regulations

Model 3 RWD and Long-Range Impacts

Tesla Inc's (NASDAQ:TSLA) Model 3 Rear-Wheel Drive and Long-Range variants will lose eligibility for federal tax credits worth up to $7,500 starting December 31, 2023, the company alerted customers. This change comes as a result of battery component regulations under the recently passed U.S. Inflation Reduction Act, which aims to reduce reliance on Chinese EV supply chains.

Full Tax Credit Eligibility Ending

Previously, Tesla said some Model 3 credits would be cut in half to $3,750, but the latest update reveals even those reduced incentives will completely phase out. Tesla is urging buyers interested in maximizing credits to take delivery before the year's end. The policy shift signals increased support for domestic production and supply chains.

Mixed Future for EVs

While the loss puts Tesla at a disadvantage, automakers like Ford and GM predict most models will retain full eligibility. Volkswagen expressed optimism but caution as well. The changes promise to reshape the competitive EV landscape in the crucial U.S. market heading into 2023.

Tesla has not yet responded to requests for comment on this update.

13 Ara 2023 - 15:22 - Business

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