The Treasury Department has confirmed the Tesla Model 3 is eligible for the full $7,500 electric vehicle tax credit. In the state of California, that makes it less expensive than the gas-powered Toyota Camry, one of the most popular passenger cars in the country.
The Inflation Reduction Act of 2022 overhauled the lucrative tax break, requiring vehicles to have battery components and critical minerals made in the US. (Chinese companies currently manufacture more than half of all EV batteries.)
When the new regulations went into effect in April, only the $53,240 Model 3 Performance variant qualified for the full credit. The $40,240 standard rear-wheel drive version and the $47,240 long-range edition were eligible for only half credit.
But Tesla appears to have rejiggered its supply chain so that vehicles with batteries produced in China are headed to foreign markets, Reuters reported. Those bound for the US are being outfitted with Panasonic or LG Energy Solution batteries that qualify buyers for the full credit.
FuelEconomy.gov, the Department of Energy website that lists all eligible vehicles, has been updated to show all versions of the Model 3 qualify.
