While it might very properly be that Tesla might convey again the $3,750 tax credit score subsequent 12 months, there isn’t any denying that the corporate will discover it extraordinarily troublesome to take action, given the tightening of government regulations surrounding element sourcing and the origin of battery supplies. The new laws, taking impact in January 2024, prioritize home manufacturing, demanding the next share of batteries and supplies be sourced from North America. This places Tesla in a bind, as its present provide chain leans closely on abroad companions.

Currently, it’s believed that the entire affected Tesla Model 3 variants use LFP battery cells that come from China. For these automobiles to proceed to qualify for the tax credit, Tesla would want to modify to battery cells which can be regionally sourced and made within the U.S. Currently, it’s unclear if Tesla has taken steps to implement this modification. If sure, there’s a risk that the $3,750 tax credit score would possibly make a comeback.

However, if Tesla decides it will be financially unviable for them to equip these automobiles with dearer, regionally sourced elements, it might set off a significant overhaul of the 2024 lineup. This might contain discontinuing the RWD and Long Range variations, introducing new variants with larger native content material, or elevating costs to offset the prices.