Last year, the U.S. Congress changed the rules governing federal tax credits for electric vehicles (EVs). The list of qualifying cars has been shifting ever since. Tesla’s website now says every Model 3 sedan, not just some trim levels, qualifies for the full $7,500 rebate.
Until this weekend, the company listed some Model 3 trim levels qualifying for the entire tax credit, with others qualifying for just half. The Department of Energy’s list of qualifying vehicles still reflects the same, but that list may not have been updated to reflect the latest state of Tesla production.
Related: How Do Electric Car Tax Credits Work?
Tesla does not operate a public relations department or respond to reporters’ questions. So the company hasn’t explained the change, which likely concerns the content of minerals in the batteries or where batteries are built.
Under a new federal law, both buyers and vehicles must qualify for the credits.
Buyers must fit under specific income caps based on their tax-filing status.
Cars must meet several criteria. They must be assembled in North America to qualify at all. They then qualify for half the credit if at least 50% of their batteries are assembled in North America. They qualify for the second half if at least 40% of critical battery minerals originate in the U.S. or certain trade partners.
The battery assembly and content requirements increase over time, eventually reaching 80%.
Tesla may have changed mineral suppliers for some Model 3 batteries to get the second half of the credit to apply.
We expect the list of qualifying vehicles to shift regularly as manufacturers by minerals from different sources.
