Tesla Model 3 Standard Range buyers could lose half their subsidies because of Chinese batteries

Tesla is facing increased demand for cars in the first quarter of 2023 amid government subsidies of up to $7500. But buyers could lose half that amount as early as April 1.

Here's What We Know

US authorities have belatedly, but still prepared new rules to provide a tax deduction for customers who buy locally assembled electric cars. They will additionally require localisation of traction battery production.

The new rules are expected to come into force on April 1, 2023. They won't affect buyers of expensive Tesla Model 3s, as they are equipped with US-made traction batteries.

But motorists who want to buy a Tesla Model 3 Standard Range need to hurry up. In order to qualify for the full tax credit, it's important to get the electric car before March 31, 2023.

Beginning April 1, 2023, a $3750 tax credit will be available to buyers of cars with at least 40% of their battery materials sourced (manufactured) in the United States. Or in countries that have a free trade agreement with the US. In the case of raw materials for batteries, we are talking about Canada and Australia.

The criterion that allows receiving an additional $3750 of tax deduction relates to battery production. From April 1, 2023, only buyers of vehicles with at least 50% of their battery components made in North America may qualify for the additional $3750 tax credit. The US-built Tesla Model 3 Standard Range electric cars are equipped with lithium-iron-phosphate batteries from China.

US authorities had planned to introduce such rules for the tax credit back in December 2022. But lawmakers have not been able to iron out all the nuances, which is why the introduction of the rules has been delayed for several months.

Source: electrek