Tesla urges Model 3 buyers to ‘take delivery’ before expected tax credit reduction

Tesla Inc. (NASDAQ:TSLA) advises customers to “take delivery immediately” of its well-known Model 3 electric car before an anticipated reduction in a tax credit for auto buyers at the end of March.

The company said it anticipates that a tax credit of up to $7,500 for its Model 3 Rear-Wheel Drive, which was originally established in January by the $430 billion Inflation Reduction Act of the Biden administration, will be reduced in an update to the American version of its Model 3 website on Wednesday.

Tesla emphasised that the credit would still apply to any deliveries made before a change in federal regulations. It further stated that the change would be implemented “no later than March 31” by the Treasury Department and the Internal Tax Service.

Customers who purchase the Model 3 for their own use and primarily use it in the United States are currently eligible for the tax credit.

According to a U.S. official who declined to be identified by Reuters, the Treasury Department’s most recent guidelines will have an impact on the battery sourcing criteria for some vehicles and lead to a reduction in the number of those earning full or partial credits.

In February, the Treasury announced that it had updated its classification standard for what defines a sedan, SUV, crossover or wagon. As a result, more EVs made by Tesla and peers like Ford Motor Company (NYSE:F) and Volkswagen (ETR:VOWG_p) became eligible for the credit.