Tesla’s rapid adjustment of its battery supply chain signifies that all of its Model 3 vehicles are eligible for U.S. federal credits, which, along with other tax credits, could reduce their price to less than the Toyota Camry.
The Biden administration confirmed on Tuesday that every one Tesla Model 3 vehicles at the moment are eligible for a $7,500 consumer tax credit, after two versions qualified for half the credits.
In April, a latest battery sourcing policy got here into effect that lowered the worth of the Model 3 with rear-wheel drive and long-range all-wheel drive to $3,750. Elon Musk’s Tesla last week on its website said all versions of the Model 3 are again eligible for full recognition. The federal government confirmed the change by itself fueleconomy.gov website.
The Model 3 starts at $40,240 and the worth could drop to $25,240 once the $7,500 federal tax credit and one other $7,500 California tax credit apply, depending on income and other requirements. Toyota’s Camry sells for $26,320 and up.
![](https://nypost.com/wp-content/uploads/sites/2/2023/06/NYPICHPDPICT000012016604.jpg?w=1024)
Improvements in the provision chain
Analysts said Tesla could have modified its battery supply chain to fulfill requirements for each battery minerals and battery components in an effort to obtain a federal subsidy.
Tesla could have ditched CATL in favor of Panasonic for the US-made rear-wheel drive Model 3, the most affordable version, said Caspar Rawles, an analyst at Benchmark Mineral Intelligence.
He said the worth of the subsidy would far outweigh the savings from using the cheaper iron-based cells utilized by CATL.
“It’s totally likely Panasonic, but there could also be some concerns about cell availability in the event that they have to provide enough for all 3 models within the US,” he said.
Tesla used CATL’s LFP battery cells for the rear-wheel drive of the Model 3 and nickel cells from an unidentified supplier for the Model 3 Long Range, analysts said.
![Tesla CEO Elon Musk](https://nypost.com/wp-content/uploads/sites/2/2023/06/NYPICHPDPICT000011942197.jpg?w=1024)
Panasonic has a battery cell factory in Nevada that meets federal requirements for local battery components. CATL and other suppliers akin to LG Energy Solution would not have factories producing Tesla cells in the USA.
Asked about Tesla and whether there was a change in its North American supply arrangements, CATL said: “The strategic partnership between the corporate and customers has not modified and can proceed to be deepened and improved.”
“Tesla was in a position to switch to producing these batteries within the US while still using Chinese cells,” said Adam Jonas, an analyst at Morgan Stanley.
Panasonic Holdings said Tuesday that it plans to extend production of electrical vehicle batteries at its Nevada factory jointly operated with Tesla by 10% over three years.
The Japanese supplier in May said it had pushed back the launch schedule for the 4680 batteries it makes for Tesla, and indicated that its existing 2170 battery cell would meet immediate demand.
Tesla also began shipping China-made Model 3s and Model Ys to Canada, freeing up some production capability for US-made models.