From January 1, 2024
Tesla's two most popular Model 3 variants, RWD and Long Range, will be eligible for a $3,750 rebate instead of $7,500 starting Jan. 1, 2024, under updated Inflation Reduction Act guidance.
These versions of the Model 3 received battery packs that contain components from a so-called “foreign entity of concern,” a Chinese supplier.
Tesla confirmed this on its website, telling potential customers that they can receive the full tax credit if they order a Tesla Model 3 RWD or Long Range by December 31st.
“Customers who receive a qualified new Tesla and meet all federal requirements are eligible for a tax credit of up to $7,500. Starting January 1, 2024, the tax credit will drop to $3,750 for rear-wheel drive and Long Range Model 3s,” Tesla said in its announcement.
The electric vehicle maker has been posting a similar message on its Model 3 page since July, informing customers that a reduction in the federal tax credit is “likely” starting in 2024. However, at the time, Tesla did not specify which Model 3 variants might be subject to a reduced federal tax credit.