PSA: The cheapest Tesla car won’t qualify for full federal tax credit starting January 1

With the Biden administration’s continued attempt to limit Chinese battery components in US electric vehicles, Tesla has now announced that two of its models won’t qualify for the full $7,500 federal tax credit as of January 1, 2024. As pointed out by our sister site TechCrunch, Tesla’s website currently has a top banner claiming that tax credit “reductions likely for certain vehicles in 2024,” urging customers to “take delivery by 12/31” in order to qualify for the full claim. A link in the banner toggles a message that specifies which two models are likely to be affected:

“Customers who take delivery of a qualified new Tesla and meet all federal requirements are eligible for a tax credit up to $7,500. Tax credit will reduce to $3,750 for Model 3 Rear-Wheel Drive and Model 3 Long Range on Jan 1, 2024. Take delivery by Dec 31 to qualify for full tax credit.”

According to the IRA (Inflation Reduction Act) rules, vehicles using battery components that are 50 percent made or assembled in the US qualify for the first half of the tax credit, i.e. $3,750. The cars can only get the remaining half of the credit if their manufacturer …read more