White House, has revealed that federal electric vehicle (EV) tax credits for two of Tesla’s Model 3 configurations are set to shrink next year. This could hurt the sales of these models and add to the already piled-up production-ready stock at Tesla’s Gigafactories.
Tax Credit Reduction for Model 3 Configurations
After a bit of back-and-forth, Tesla has officially confirmed that both the Rear-Wheel Drive (RWD) and Long Range configurations of the Model 3 will see a reduction in rebates to $3,750 in 2024. This adjustment follows the Biden administration’s updated guidance on the Inflation Reduction Act (IRA) tax incentives, aiming to further control the use of materials from certain countries.
Important dates for Maximum Savings
Tesla’s website delivers a straightforward message: “Take delivery by Dec 31 for full tax credit.” This indicates that the $7,500 tax credit will be cut in half to $3,750 starting Jan 1, 2024, specifically for the Model 3 RWD and Model 3 Long Range.
Model X and Model Y Variations difference
While the Model X dual-motor and all three Model Y trims currently qualify for the full $7,500 credit, Tesla similarly urges potential buyers: “Take delivery by Dec 31 for full $7,500 tax credit.” This heads-up aligns with the new tax credit landscape.
Earlier Warning and Updated Guidance
Back in July, Tesla had hinted at possible reductions in the federal tax credit, but details were scarce. Now, with the updated guidance, it’s clear that the Model 3 RWD and Long Range will be affected. Notably, these credits will now be instantly available at the point of purchase, a departure from previous years when buyers had to wait until tax season.
Global Model 3 Refresh and Implications
As Tesla introduced its updated Model 3 design in markets outside North America, there’s anticipation surrounding its impact on the U.S. and Canada next year. The refreshed Model 3 is currently rolling off the production lines at Tesla’s Gigafactory in Shanghai, China.
If you’re eyeing a Tesla Model 3 and aiming for the full tax credit, swift action is required – take delivery by the end of the year. The changes reflect broader efforts to manage tax incentives and materials sourcing.