Gary Zhou 
Key Points
- š Federal EV tax credits for Tesla Model 3 RWD and Long Range configurations will be reduced to $3,750 in 2024.
- š» Tesla officially announced the reduction on its website after updated guidance from the Biden administration on the Inflation Reduction Act.
- š The tax credit reduction will take effect on January 1, 2024, and buyers must take delivery by December 31, 2023, to qualify for the full $7,500 tax credit.
- š The Model X dual-motor and all three Model Y trims currently qualify for the full tax credit.
- š The updated guidance ensures that tax credits will be made instantly available at the point of purchase, unlike previous years when buyers had to wait until tax season.
- š Tesla had warned about the likely reduction in federal tax credits for the Model 3 as early as July, but the initial message didnāt specify which trims would be affected.
- š The news coincides with Teslaās launch of the updated Model 3 design in international markets, with the refreshed sedan expected to reach the U.S. and Canada next year.
Federal electric vehicle (EV) tax credits will be reduced on purchases of two of Teslaās Model 3 configurations next year, under updated guidance released by the White House this week.
After theĀ credit was cut in half for the Model 3 rear-wheel-driveĀ then later reinstated this year, the company has now officially shared a message on itsĀ websiteĀ saying that the RWD and Long Range configurations will both have their rebates reduced to $3,750 in 2024. The note comes after the Biden administration issued updated guidance on the Inflation Reduction Act (IRA) tax incentives on Friday, further limiting the use of materials from China and other countries.
ā$7,500 tax credit will reduce to $3,750 for Model 3 Rear-Wheel Drive and Model 3 Long Range on Jan 1, 2024,ā Tesla writes on its website. āTake delivery by Dec 31 for full tax credit.ā
While the Model X dual-motor and all three Model Y trims currently qualify for the full credit, Tesla has posted similar messages on their respective order configurators noting that buyers should āTake delivery by Dec 31 for full $7,500 tax credit.ā
Tesla also shared a similar message for theĀ Model 3 on its website as early as JulyĀ this year, warning that reductions to the current federal tax credit were ālikelyā after December 31. However, the initial message didnāt specify which Model 3 trims this change would apply to.
Under the updated guidance, theĀ credits will also be made instantly availableĀ at the point of purchase, unlike this and past years, when buyers have had to wait until tax season to receive their rebates.
The news also comes afterĀ Tesla launched its updated Model 3 designĀ in several markets outside of North America in the past few months, though theĀ refreshed sedan is not expected to hit the U.S. or CanadaĀ until next year. Currently, the refreshedĀ Model 3 is built at Teslaās Gigafactory in Shanghai, China.
