In a rare move, Tesla has retweeted an article from Reuters. The article highlights how Tesla’s Model 3 has become cheaper than the Toyota Camry in California, thanks to tax incentives. This is great news for Tesla fans who have been eagerly waiting for the price of this electric vehicle to drop.
Tesla’s battery supply chain has undergone rapid adjustments, making all Model 3 eligible for federal tax incentives. This, combined with other tax incentives, means that the price of the Model 3 may now be lower than that of the Toyota Camry. All Tesla Model 3 are now eligible for a $7,500 electric vehicle consumer tax credit, with two of the previous three models eligible for half the tax credit, or $3,750.
Analysts are suggesting that Tesla may have adjusted its battery supply chain to meet federal subsidy requirements for battery minerals and components. BMI analyst Caspar Rawles has indicated that Tesla may have abandoned CATL and turned to Panasonic or LG Chem. Rawles believes that the value of subsidies will far exceed the cost savings of CATL using cheaper iron-based batteries. He says, “It’s highly likely to be Panasonic, but if they need to provide enough batteries for all US Model 3s, there may be some concerns.”
Tesla is reportedly using CATL LFP batteries in the Model 3 rear-wheel drive and LG Chem’s nickel-based batteries in the Model 3 Long Range. When asked if Tesla and its supply arrangements for North America had changed, CATL stated that “the strategic partnership between the company and its customers has not changed and will continue to deepen and improve.”
Panasonic has announced plans to increase production of electric vehicle batteries at a Nevada factory jointly operated with Tesla by 10% over the next three years. The Japanese supplier had delayed the schedule for producing 4680 batteries for Tesla in May. However, its existing 2170 batteries can currently meet current demand.
In addition, Tesla has started delivering Chinese-made Model 3 and Model Y to Canada, freeing up some capacity for US-made models. Tesla’s stock price closed at $224.57, up 1.47%, marking the longest consecutive increase in the company’s stock price since 2021, with a cumulative increase of nearly 23%.
Tesla’s CEO, Elon Musk, recently visited China, which was seen as an important signal that Tesla is continuing to increase its investment in the Chinese market. With all these positive developments, it looks like Tesla is on the verge of becoming an even bigger player in the electric vehicle market.