A strategic shift in Tesla Inc's (TSLA.O) battery supply chain is proving instrumental in offering a Model 3 sedan that, with federal and California tax incentives, has a price tag lower than a Toyota (7203.T) Camry.
The Biden administration confirmed on Tuesday that all versions of Tesla's (TSLA.O) Model 3 now qualify for $7,500 in electric vehicle consumer tax credits, reversing an earlier reduction for two variants of the Model 3.
In April, changes to battery sourcing rules had reduced the credit for the Model 3 Standard Range Rear Wheel Drive and Long Range All-Wheel Drive to $3,750. However, Tesla revealed last week that all Model 3 versions again qualify for the full credit, a change confirmed by the government on its fueleconomy.gov website.
Currently, a Model 3 has a starting price of $40,240, but with the $7,500 federal tax credit and an additional $7,500 from the California tax rebate, depending on income and other requirements, the cost could drop to as low as $25,240. In comparison, the listed price for Toyota's Camry is $26,320 and upwards.
This development is a significant step forward in making electric vehicles more accessible and affordable for consumers. As Tesla continues to innovate and streamline its production process, potential EV owners now have more incentive to make the transition towards sustainable transportation. The move also applies competitive pressure to other automakers to follow suit, which could potentially accelerate the overall adoption rate of EVs.
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