The base Tesla Model 3 now qualifies for the full $7,500 federal EV tax credit, joining other Model 3 variants.
On Friday, Tesla fans noted that, when building a base Model 3, Tesla then indicated that it was eligible for a $7,500 credit. At that time, the EPA FuelEconomy.gov list of qualified vehicles indicated that model and some of the lineup was only eligible for $3,750, and Green Car Reports reached out to the EPA for comment.
As of Tuesday, with no further confirmation from EPA, the site was updated to indicate that the entire Model 3 lineup is now eligible for the full amount.
Tesla models qualifying for a federal EV tax credit as of June 2023
When the federal government initially listed qualified vehicles in April, only those getting the Model 3 Performance could claim the full $7,500. But now the entire lineup is eligible, according to FuelEconomy.gov. That lineup includes the base rear-wheel drive Model 3 and all-wheel drive Model 3 Performance and Model 3 Long Range.
This isn’t the only adjustment made to the list of qualified vehicles since it was first announced. Just a few days after that list was released, Volkswagen confirmed that all 2023 ID.4 models qualify for the full $7,500 credit. A shift to local assembly of U.S.-market vehicles, as well as local battery sourcing, allow that.
2023 Tesla Model 3
The base Model 3 currently starts at $41,630 before the credit, so this gives it an effective price below $35,000 if buyers qualify on household income restrictions.
In order to be able to claim the full amount on the base Model 3, with lithium iron phosphate (LFP) cells, Tesla must have changed sourcing of LFP cells to a U.S. trade partner—not China. Currently LFP cells for EVs aren’t made in the U.S. at any scale, but a Michigan plant making them is key to Ford’s plans for EV affordability.