Tesla has reportedly notified its employees in the US that it will soon lose the $7,500 tax credit currently available on the Model 3 Rear-Wheel Drive (RWD).
Tesla sales in the US have boomed with the introduction of the $7,500 tax credit from the Inflation Reduction Act earlier this year. After some initially confusing rules which made some of Tesla’s electric vehicles (EVs) ineligible for the incentive, all variants of the Model 3 and Model Y, Tesla’s two biggest sellers, now qualify for the tax credit.
With new battery sourcing rules expected to be announced by the IRA before the end of the month, rules which would again impact which EVs are eligible for the tax credit, Tesla is warning employees it expects to lose the tax credit on the entry-level Model 3 RWD.
According to an internal memo obtained by Electrek, Tesla expects this to happen because of the lithium iron phosphate (LFP) battery in the Model 3 RWD, which comes from China. The memo was reportedly sent to help employees prepare buyers for the imminent change, and if possible to get them to take delivery as soon as possible so they can still receive the tax credit.
While the Model 3 RWD is expected to lose the tax credit, all of the remaining Model 3 and Model Y variants will continue qualify as those batteries are assembled in the US, according to Electrek.
The full rules around battery sourcing are expected to be released very soon, and will likely have a large impact on other EV makers in the US as the majority of them have supply deals with companies from abroad.
