Battery sourcing regulations will cut the benefit by half from January
13 December 2023 - 17:30
by Agency Staff
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Tesla’s Model 3 rear-wheel drive and long range vehicles will lose a $7,500 federal tax credit from December 31 based on new guidance under the US Inflation Reduction Act (IRA), a message on the US automaker’s website showed late on Tuesday.
The US Treasury issued guidelines earlier in December detailing new battery sourcing restrictions that take effect from January 1 aimed at weaning the US electric vehicle supply chain away from China.
“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 said in a notice on its website.
Tesla did not immediately respond to a Reuters’ request for comment.
In April, the Treasury said new guidelines will slash the credits for the EV maker’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 electric vehicles are likely to be reduced after December 31, without elaborating on the reason.
The US EV credit requires 50% of the value of battery components to be produced or assembled in North America to qualify for $3,750 of the credit and 40% of the value of critical minerals sourced from the US or a country with which it has a free-trade agreement.
Other carmakers such as Ford and GM expect to qualify for the entire tax credits for many of their EVs from 2024, while Volkswagen remains “cautiously optimistic”.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Tesla to lose Model 3 consumer tax credit
Battery sourcing regulations will cut the benefit by half from January
Tesla’s Model 3 rear-wheel drive and long range vehicles will lose a $7,500 federal tax credit from December 31 based on new guidance under the US Inflation Reduction Act (IRA), a message on the US automaker’s website showed late on Tuesday.
The US Treasury issued guidelines earlier in December detailing new battery sourcing restrictions that take effect from January 1 aimed at weaning the US electric vehicle supply chain away from China.
“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 said in a notice on its website.
Tesla did not immediately respond to a Reuters’ request for comment.
In April, the Treasury said new guidelines will slash the credits for the EV maker’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 electric vehicles are likely to be reduced after December 31, without elaborating on the reason.
The US EV credit requires 50% of the value of battery components to be produced or assembled in North America to qualify for $3,750 of the credit and 40% of the value of critical minerals sourced from the US or a country with which it has a free-trade agreement.
Other carmakers such as Ford and GM expect to qualify for the entire tax credits for many of their EVs from 2024, while Volkswagen remains “cautiously optimistic”.
Reuters
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