Tesla to lose US$7,500 consumer tax credits for some Model 3 vehicles

AUSTIN: Tesla's Model 3 Rear-Wheel Drive and Long Range vehicles will lose an up to US$7,500 (around RM36,000) federal tax credit from Dec 31 based on new guidance under the US Inflation Reduction Act, a message on the US automaker's website showed late Tuesday.

The US Treasury issued guidelines earlier this month detailing new battery sourcing restrictions that take effect Jan 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 Dec 31, 2023 based on current view of new IRA guidance. Take delivery by Dec 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 US$3,750 but that other Tesla models will retain the entire benefit.

In July, Tesla said the US$7,500 federal tax credits for its Model 3 electric vehicles are likely to be reduced after Dec. 31, without elaborating on the reason.

The US EV credit currently requires 50% of the value of battery components to be produced or assembled in North America to qualify for US$3,750 of the credit and 40% of the value of critical minerals sourced from the United States 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 next year, while Volkswagen remains "cautiously optimistic".
Autos Tesla