Tesla expects to lose full $7,500 tax credit on its cheapest electric car
Fred Lambert, Mar 23 2023 - 3:16 am PT
"Tesla told employees that it expects to lose the full $7,500 federal tax credit on its cheapest electric car because the batteries come from China.......For the last three months, eligible buyers in the US could get a $7,500 tax credit on all Tesla Model 3 and Model Y vehicles, which are the automaker’s two cheapest and most popular models.
However, we knew that things would change by the end of March.
When the new tax credit program was announced, it included requirements for battery production in North America and battery material sourcing in countries with free trade agreements with the US in order to get access to up to half of $7,500 credit.......
The Model 3 Standard Range is built in Fremont, California, in the US, but its battery pack is using LFP battery cells built in China...."
"CATL had a 37 percent share of the global power battery market in 2022, up 4 percentage points from 2021, retaining the top spot for the sixth consecutive year...". CATL has two phosphate mines to produce LFP batteries.