Model 3 Gets Incentives
Tesla has made some recent changes to the posted prices of their vehicles in the United States that show the company was finally able to secure the full $7,500 tax credit for not just their Performance version - but all versions of the electric sedan.
The tax credits are part of an incentive program started with the passing of the Inflation Reduction Act in the US. The law allows companies to apply for tax credits if they meet certain criteria - and Tesla has been scrambling since last year to make sure they can take full advantage of these deals.
However, around the end of March this year, Tesla was told that not all of their Model 3 variants would be eligible for the full $7500 tax credit on offer - due mainly to the Chinese-made CATL batteries that powered them.
It was a little unclear if Tesla would be able to do anything about the issue however. There weren’t a lot of US-based battery makers at that time, and half of the tax credits would be applied anyway. Not ideal, but it was something.
But it looks like Tesla wasn’t satisfied with that. Their cheapest version of the Model 3 - the rear wheel-drive variant - would greatly benefit from the price drop that the tax incentives would allow. Pair that with some local incentives - like those reportedly on offer in Oregon - and a person could buy themselves a new Model 3 RWD for just under $27,000 USD.
That’s a great way to get your car to sell, so it’s no wonder Tesla went through the effort to get those incentives to apply - and how they did that was actually simple. They aren’t selling any Model 3s with Chinese-made batteries in the US anymore.
A lot of these vehicles were of course manufactured in GigaShanghai - Tesla’s Chinese facility, which is also a major export hub for the company. At about the beginning of May, it was reported that the company had shifted their Chinese exports to Canada instead - neatly side-stepping the problem without having to lose inventory.
As is usual with Tesla strategy, they saw a problem and just decided to rearrange most of their business to get around it.
But that was only half the problem - they still needed to source batteries in the US to get their incentives. But some batteries are already manufactured in North America, so all Tesla had to do was prioritise those sources for their US market, and they had what they needed.
And those of you who have been following the activities of Tesla and their partners over the last year will already know that new facilities are being made for battery production in North America to supplement what little is already made here - so within the next five or so years, this really won’t be a problem anymore.
This has got to be making a lot of people happy. Tesla is hitting their Inflation Reduction Act goals one after another, and Tesla users new and old are reaping the benefits. More Tesla manufacturing, increased charging infrastructure, and now - cheaper cars. It’s all coming up Tesla.