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Tesla Model 3 Standard Range buyers could lose half of subsidies due to Chinese batteries

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Tesla Model 3 Standard Range buyers could lose half of subsidies due to Chinese batteries

In the first quarter of 2023, Tesla faced an increase in demand for cars on the back of government subsidies of up to $7,500. But buyers can lose half of this amount from April 1.

What is known

The American authorities belatedly, but nevertheless, prepared new rules for providing a tax deduction for customers who buy locally assembled electric vehicles. They will additionally require the localization of the production of traction batteries.

The new rules are expected to come into effect on April 1, 2023. They will not affect buyers of expensive Tesla Model 3 trim levels in any way, since they are equipped with American-made traction batteries.

But car enthusiasts who want to buy the Tesla Model 3 Standard Range need to hurry. To qualify for the full amount of the tax credit, it is important to receive an electric car by March 31, 2023.

Beginning April 1, 2023, a $3,750 tax credit will be available to car buyers with at least 40% of their battery materials sourced (manufactured) in the United States. Or in countries that have a free trade agreement with the United States. In the case of raw materials for batteries, we are talking about Canada and Australia.

The criterion that allows for another $3,750 tax deduction is for battery manufacturing. Effective April 1, 2023, only car buyers with at least 50% of their battery components made in North America are eligible to qualify for the additional $3,750 subsidy. American-built Tesla Model 3 Standard Range electric vehicles are equipped with lithium-iron-phosphate batteries from China.

The US authorities planned to introduce such rules for obtaining a tax deduction as early as December 2022. But legislators could not settle all the nuances, and therefore the introduction of the rules was postponed for several months.

Source: electrek





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