Tesla expects reduced tax credit for Model 3 by March-end

FILE PHOTO: Visitors check a Tesla Model 3 car at a showroom of the U.S. electric vehicle (EV) maker in Beijing, China, Feb. 4, 2023. REUTERS/Florence Lo

(Reuters) - Tesla Inc said on Wednesday a $7,500 tax credit in place since January will be reduced for its Model 3 rear-wheel drive by March 31, subject to guidance due this week from the U.S. Treasury Department on the sources of battery components.

The Treasury Department is due to issue guidance on sourcing of electric vehicle (EV) batteries by Friday that will impact the credit available for some EVs. The credit is in effect for deliveries taken before the updated guidance is issued.