All new Tesla Model 3 vehicles will now be eligible for the $7,500 federal EV tax credit, according to a change on Tesla’s website.
EV tax credits were authorized by Congress last August as part of the Inflation Reduction Act, with the goal of ending America’s reliance on China for batteries. The entire $7,500 tax credit is divided into two parts. Electric vehicles may qualify for half, or $3,750, if 50% of the value of the battery components are manufactured or assembled in North America; The other half requires 40% of the value of the critical materials to be sourced from the United States or another free trade agreement country.
Image credits: Tesla website
When the tax credits went into effect on January 1, the Treasury Department postponed the publication of battery sourcing guidelines to give electric vehicle manufacturers time to respond to the requirements. On April 18, the department began enforcing a key material sourcing requirement, resulting in many models losing the entire tax credit they were eligible for in the first quarter of the year.
Tesla’s Model 3 has seen its full credit cut in half, but many other automakers – like BMW, Rivian, Volvo and Hyundai – lose their credit completely.
Now, it looks like all Tesla cars will be eligible for the full $7,500 credit. Previously, the only Model 3 eligible for the full tax credit was the Model 3 Performance. Now, the long-range all-wheel drive and rear-wheel drive Model 3 will also qualify. The Model 3’s rear-wheel drive now starts at $32,740 when the tax credit is in effect.
Tesla doesn’t say what has changed, but CEO Elon Musk forward Screenshot of the website showing the tax credits available for each vehicle. Importantly, the Treasury Department’s website has not yet updated to reflect Tesla’s new eligibility for the tax credits. The department has yet to respond to TechCrunch’s request for comment.
Image credits: Internal Revenue Service
