Tesla has made a significant change to its lineup, discontinuing the base Model 3 RWD in the United States. This move reshapes the automaker’s entry-level options and reflects broader changes in the EV market landscape.
With the base model’s departure, the Model 3 Long Range RWD now serves as Tesla’s entry-level trim. This version boasts an impressive 363 miles of range and comes with a starting price of $34,990, which factors in the federal EV credit. It’s a notable shift that redefines what consumers can expect from Tesla’s most affordable option.
This change marks the end of Tesla selling any vehicles in the U.S. that use Chinese LFP (Lithium Iron Phosphate) batteries. The decision aligns with recent policy changes that have significant implications for the EV industry.
The timing of Tesla’s decision is particularly interesting given recent policy changes. The Biden administration recently increased tariffs on Chinese EVs imported to the U.S. to 100%, up from 25%. Additionally, tariffs on lithium-ion batteries and battery parts from China rose to 25% from 7.5%. These policy shifts likely influenced Tesla’s strategic decision.
While the now-discontinued Model 3 RWD was manufactured in California, its use of Chinese LFP batteries disqualified it from the $7,500 federal EV credit. In contrast, 363-mile range Model 3 Long Range RWD qualifies for this incentive, making it a more attractive option for many buyers. This disparity in incentives likely contributed to Tesla’s decision to streamline its lineup.
As Tesla motors forward with these changes, it’s clear that the landscape of affordable EVs is evolving. Will this move charge up Tesla’s sales, or will some potential buyers feel left in the slow lane?
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