Tesla's Model 3 vehicle in California is now priced lower than a Toyota Camry, thanks to a $7,500 tax cut approved for the sedan by Elon Musk's company. Starting at $40,240, the all-electric vehicle becomes even more affordable with the tax rebate and an additional California tax rebate of $7,500, based on income and other requirements, bringing the final cost down to $25,240. Meanwhile, the Japanese-made Camry is listed at $26,320 or higher.

Tesla recently updated its website to reflect the tax cut, and the Biden administration confirmed that all Tesla Model 3 vehicles are now eligible for electric vehicle consumer tax credits. Previously, only two of the three models qualified for half the credits. According to analysts specializing in lithium-ion battery raw materials markets, Tesla may have had to modify its battery mineral sourcing and components to meet the subsidy requirements.

In April, the Biden administration implemented new battery sourcing rules, which resulted in Tesla's Model 3 Standard Range Rear Wheel Drive and Long Range All-Wheel Drive models qualifying for only half the credit, amounting to a savings of $3,750 per vehicle. In March, Tesla was in discussions with China's leading electric vehicle battery manufacturer, Contemporary Amperex Technology Co. Ltd. (CATL), to establish a new battery plant in the United States. However, these efforts faced obstacles due to the new EV rules introduced through the $430-billion Inflation Reduction Act signed by President Biden. The act imposed North American assembly and new mineral requirements on vehicles to qualify for EV credits. These rules were part of the administration's strategy to achieve energy independence from China's EV battery supply chains and promote wider adoption of electric vehicles and plug-in hybrids in the US.

Previously, Tesla had utilized CATL's lithium iron phosphate (LFP) battery cells for its Model 3 Rear Wheel Drive and nickel-based cells from an unidentified supplier for its Model 3 Long Range. Analyst Caspar Rawles from Benchmark Mineral Intelligence (BMI) suggested that Tesla might have switched to batteries sourced from Panasonic for their US-made Model 3 Rear Wheel Drive, which serves as the company's budget option. Rawles also mentioned potential concerns about cell availability if Panasonic needs to supply batteries for all US Model 3s.

Which would YOU rather own?

What's CHEAPER In California? A Toyota CAMRY Or A Tesla MODEL 3? And WHICH Would You RATHER Own?

About the Author