Tesla Warns 'Strong Likelihood' Of Model 3's $7500 Tax Credit Getting Slashed Next Year

Electric vehicle giant Tesla Inc TSLA has issued a crucial notice to potential customers considering a new Model 3.

What Happened: “Strong likelihood of tax credit reductions to $3,750 after Dec.31,” the warning on the website read, citing pending federal guidance.

The company also urged prospective buyers to take their deliveries before the end of the quarter to guarantee a full incentive of $7,500.

Why It Matters: It was only in June that the U.S. Department of Energy confirmed that all versions of the cheapest EV from Tesla’s lineup would be eligible for a $7,500 tax credit.

Until then, after the U.S. Treasury Department issued fresh guidance on battery sourcing in March, Model 3’s Rear-Wheel Drive (RWD) and Long Range versions qualified only for a tax credit of $3,750.

While the Model 3 RWD version is now priced at $38,990, the Long Range starts at $45,990 and the Performance version at $50,990.

Tesla had warned of a reduction in tax credit before in July. However, the company didn’t predict it to halve.

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