Overview

• Tesla announced that Model 3 RWD and Long Range will lose the entire $7,500 federal tax credit starting January 1st, 2024.
• Model Y is also likely to see reductions in its federal tax credits.
• The reduction in tax credits is due to new government requirements for electric vehicles to have fewer parts, especially batteries, from China.
• Tesla is working to produce more batteries locally in the US to regain access to the full tax credit.
• It's unclear when Tesla will be able to ramp battery production enough to support Model 3 and Model Y being produced in the US.