Tesla's Model 3 Hit by Tax Credit Cut: $7,500 Federal Tax Benefits End For Rear-Wheel Drive And Long-Range Variants
Portfolio Pulse from Anan Ashraf
Tesla Inc's (NASDAQ:TSLA) Model 3 rear-wheel drive and long-range variants will no longer be eligible for the $7,500 federal EV tax credit starting January 1, 2024, due to new guidance aimed at reducing Chinese content in batteries. The tax credit was previously expected to be halved, but now it will end entirely for these models. The Model 3 Performance variant remains eligible for the full credit.
December 13, 2023 | 5:32 am
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Tesla's Model 3 RWD and Long Range variants will not receive the federal EV tax credit in 2024, potentially affecting demand and sales. The Performance variant remains eligible, which may influence consumer choice within Tesla's lineup.
The loss of the federal tax credit for the Model 3 RWD and Long Range variants could lead to a decrease in demand for these models, as the incentive has been a significant factor in consumer purchasing decisions. This could negatively impact Tesla's sales and revenue in the short term. However, the continued eligibility of the Performance variant for the full credit may mitigate some of the negative impact by shifting consumer preference towards this model.
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