Tesla updates Model 3 and Model Y inventory to optimize US tax credit eligibility

Tesla has updated its Model 3 and Model Y offerings in existing inventory, with the automaker now selling the same variants of their two most popular electric vehicles (EVs) in configurations that qualify for the US federal tax credit, and others that do not.

Earlier this month Tesla announced the Model 3 Long Range (LR) was eligible for the full $7,500 tax credit in the US, joining the Rear-Wheel Drive (RWD) and Performance variants that also qualified, alongside the full lineup of the Model Y that also qualifies for the incentive.

Part of the reason the full Model 3 and Model Y lineup qualify is because they are assembled in North America and that at least 50% of battery components are sourced from countries that are not a “foreign entity of concern,” such as China. Although Tesla never announced what changed with the Model 3 LR for it to become eligible, it was assumed they were able to alter their supply chain to increase the percentage of battery components sourced from appropriate countries.

But it isn’t just the vehicle and its battery that needs to qualify, as buyers also have to meet certain criteria to be eligible to claim the tax credit, like an income requirement of US$300,000 for married couples filing their tax jointly.

In order to bring those requirements together and make sure that they sell as many of their vehicles that qualify to buyers that also qualify, Tesla is now listing Model 3 and Model Y configurations that are eligible for the incentive, and others that are not.

Tesla has done this by adding a filter for “Tax Credit Eligible Vehicles” to the existing inventory site in the US (h/t: @SawyerMerritt)

Credit: Tesla

There is no similar filter when ordering a custom built Model 3 or Model Y through the Design Studio. All Model 3 and Model Y custom ordered are eligible for the incentive.

This is an interesting approach from Tesla, and seeks to maximize the number of vehicles it can sell for $7,500 less thanks to the tax credit.

There is of course no similar battery sourcing requirements for EVs to be eligible for the federal rebate in Canada. While there is no such requirement, they could soon cost more as Canada is considering adding tariffs to Chinese-made EVs, a move that would impact Tesla as it currently imports some of its vehicles from Giga Shanghai to Canada.

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