The White House released updated guidance indicating a reduction in federal electric vehicle (EV) tax credits for two of Tesla Model 3 configurations starting in 2024. The revised information follows the Biden administration’s adjustments to the Inflation Reduction Act (IRA) tax incentives, with a focus on limiting reliance on materials from countries, including China.
Tesla’s Rollercoaster: Model 3 Rear-Wheel Drive and Long Range Configurations
Earlier this year, the Model 3 rear-wheel-drive configuration saw its tax credit cut in half, only to be later reinstated. Now, Tesla has officially confirmed on its website that both the rear-wheel-drive (RWD) and Long Range configurations will experience a reduction in rebates to $3,750 in 2024. The company urges customers to take delivery by December 31, 2023, to avail the full tax credit.
Tesla’s announcement on its website reads, “$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 for full tax credit.” While the Model X dual-motor and all three Model Y trims currently qualify for the full credit, similar messages have been posted on their respective order configurators, emphasizing the importance of taking delivery by the end of the year.
Caution Signs: Tesla’s Earlier Warnings and the Unveiling of Updated Model 3 Design
This revelation aligns with Tesla’s earlier caution in July, where the company hinted at potential reductions to the federal tax credit after December 31, 2023, without specifying the affected Model 3 trims.
In a departure from previous years, the updated guidance ensures that the tax credits will be instantly available at the point of purchase. Traditionally, buyers had to wait until tax season to receive their rebates.
This news coincides with Tesla’s recent global launch of its updated Model 3 design in various markets outside of North America. However, the refreshed sedan is not expected to make its debut in the U.S. or Canada until the coming year. Presently, the refreshed Model 3 is being manufactured at Tesla’s Gigafactory in Shanghai, China.
Conclusion
As federal EV tax credits witness adjustments, Tesla owners and potential buyers face a crucial deadline at the close of this year to maximize their tax benefits. The reduced credits for certain Model 3 configurations reflect broader governmental strategies aimed at shaping the EV market and addressing concerns related to global supply chains.
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SOURCE : TESLARATI
FAQs
Which Tesla Model 3 configurations will see reduced tax credits in 2024?
The Model 3 Rear-Wheel Drive and Model 3 Long Range configurations will experience reduced tax credits, dropping to $3,750 from January 1, 2024.
When is the deadline to avail the full tax credit for these configurations?
To qualify for the full $7,500 tax credit, customers are advised to take delivery by December 31, 2023.
Are other Tesla models affected by these changes?
Currently, the Model X dual-motor and all three Model Y trims still qualify for the full tax credit. However, buyers of these models are also encouraged to take delivery by the end of the year for maximum benefits.
How has the process of receiving tax credits changed under the updated guidance?
Unlike previous years, the tax credits will be made instantly available at the point of purchase, eliminating the need for buyers to wait until tax season for rebate processing.
Are there other EV models impacted by these changes in federal tax credits?
Currently, the dual-motor configuration and all three trims of another electric vehicle model still qualify for the full tax credit. Buyers of these models are also encouraged to take delivery by the end of the year to maximize benefits.