Tesla Inc‘s TSLA Model 3 rear-wheel drive and long-range variants will not be eligible for federal EV tax credit starting next year, contrary to the company’s previous claims of it being eligible for half the credit.
What Happened: After the Biden administration issued fresh guidance aimed at reducing Chinese content in batteries eligible for EV tax credits starting next year, Tesla issued a warning on its website on Dec. 1 that the tax credit on the two vehicles would be halved starting next year.
"$7,500 tax credit will reduce to $3,750 for Model 3 Rear-Wheel Drive and Model 3 Long Range on Jan 1, 2024," the warning then read.
However, now an updated disclaimer on Tesla’s website shows that the tax credit on the two vehicles will ‘end’ on Dec. 31 with no more tax credit on the two vehicles.
“Take delivery by Dec 31 for full tax credit,” the company urged customers.
Why It Matters: As per the updated guidance issued by the Biden administration on Dec. 1, an electric vehicle may not contain any battery components that are manufactured or assembled by a ‘foreign entity of concern' (FEOC) starting in 2024 if they are to receive federal tax credit. FEOC is an entity that is owned by, controlled by, or subject to the jurisdiction and direction of China, Russia, North Korea or Iran.
With no federal tax credit, the Model 3 RWD will start at $38,990 starting next year and the Long Range at $45,990. The Model 3 Performance variant, priced at $50,990, continues to be eligible for a full $7,500 EV tax credit.
Photo by TierneyMJ on Shutterstock
Check out more of Benzinga’s Future Of Mobility coverage by following this link.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
