All new Tesla Model 3 vehicles will now be eligible for the $7,500 federal electric vehicle tax credit, according to a change on Tesla’s website.
Electric vehicle tax credits were mandated by Congress last August as part of the Cut Inflation Act, in an effort to end the United States’ reliance on electricity. China for batteries. The total tax credit of $7,500 is divided into two parts. Electric vehicles can qualify for half, or $3,750, if 50% of the value of the battery components were produced or assembled in North America; the other half requires that 40% of the value of critical materials come from the United States or another country that has signed a free trade agreement.
When the tax credits took effect Jan. 1, the Treasury Department delayed releasing battery procurement guidelines to give electric vehicle makers time to meet the requirements. On April 18, the ministry began enforcing the critical materials sourcing requirement, leading many vehicle models to lose all of the tax credits they were entitled to in the first quarter of the year. .
Tesla’s Model 3 saw its full credit cut in half, but many other automakers — like BMW, Rivian, Volvo and Hyundai — lost their credits entirely.
Now, it looks like all Tesla vehicles will be eligible for the full $7,500 credit. Previously, the only Model 3 eligible for the full tax credit was the Model 3 Performance. Now, the Model 3’s long-range all-wheel drive and rear-wheel drive will also be eligible. Model 3 rear-wheel drive now starts at $32,740 when the tax credit kicks in.
Tesla didn’t say what changed, but CEO Elon Musk retweeted a screenshot of the website that displays the tax credits available for each vehicle. Crucially, the Treasury Department’s website has yet to be updated to reflect Tesla’s new eligibility for tax credits. The department has not yet responded to TechCrunch’s request for comment.