Tesla's two most popular and cost-effective models, the Model 3 and Model Y, were eligible for a $7,500 tax credit for three months until March. However, this is expected to change by the end of March.
The new tax credit program includes a requirement for battery production in North America and battery material sourcing from countries that have free trade agreements with the US to receive up to half of the $7,500 credit.
The detailed guidelines on how these requirements would work were not released before the program came into effect in January, and were therefore waived until Q2. It was expected that the Internal Revenue Service (IRS) would release guidance on these guidelines by then.
According to Electrek, Tesla has informed its employees that it anticipates the IRS releasing guidance soon and that the automaker will lose the full credit on the Model 3 Standard Range, which is the cheapest vehicle in Tesla's fleet.
Although the Model 3 Standard Range is assembled in Fremont, California, the battery pack uses LFP battery cells that are manufactured in China.
Tesla has apparently communicated this information to its employees to alert buyers of those vehicles, as there may be changes in the full credit's availability if delivery occurs on April 1 instead of March 31, subject to official guidance.
Tesla's other Model Y and Model 3 cars in the US are expected to have access to the entire tax credit since they use battery cells manufactured by Tesla or Panasonic in Nevada, California, or Texas.
Although battery material sourcing could be an issue, Tesla seems optimistic that it will not be a problem because the majority of its battery materials come from countries with free trade agreements such as Australia and Canada.
Source: Electrek
