Summary
- Tesla has discontinued the entry-level Model 3 RWD in the U.S., likely due to increased tariffs on Chinese-made electric vehicles and batteries
- This model used a Chinese-made lithium iron phosphate (LFP) battery and did not qualify for the $7,500 federal tax credit
- The next trim, the Model 3 RWD Long Range, with more range and faster acceleration, became a more cost-effective option after factoring in the tax credit
- Tesla’s U.S. website now only offers three versions of the Model 3, none of which use a Chinese-made battery
- The Biden administration’s increased tariffs on imported EVs and batteries may have contributed to Tesla’s decision to discontinue the Model 3 RWD version.
Article
Tesla Discontinues Entry-Level Model 3 RWD
Tesla has discontinued the cheapest version of its most affordable electric vehicle, the Model 3 Rear-Wheel Drive (RWD), in the United States. The decision is most likely due to the increased tariffs on Chinese-made electric vehicles and batteries that went into effect on September 27. The Model 3 RWD, which was powered by a Chinese-made lithium iron phosphate (LFP) battery, is no longer available to order on Tesla’s U.S. website. The model was priced at $38,990 without the destination fee and had an EPA-rated range of 272 miles on a full charge.
Impact of Tariffs on Tesla’s Lineup
The increased tariffs on Chinese-made EVs and batteries have affected Tesla’s lineup in the U.S. The Model 3 RWD was the only EV in Tesla’s lineup to use a Chinese-made battery. It was not eligible for the $7,500 federal tax credit, making the next trim, the Model 3 RWD Long Range, a more attractive option with 363 miles of range on a full charge and an effective price of $34,990 after factoring in the tax credit. With the discontinuation of the entry-level Model 3 RWD, Tesla’s U.S. website now shows just three versions of the Model 3.
Tesla’s Shift Away from Chinese-Made LFP Batteries
With the latest change to its U.S. lineup, Tesla no longer sells any EV with a Chinese-made LFP battery. The U.S.-spec Model 3 is built in California, while other parts of the world import the EV from China. The Biden administration’s decision to increase tariffs on imported EVs and EV batteries has led to Tesla’s shift away from Chinese-made LFP batteries. The rate for imported Chinese electric vehicles increased from 25% to 100%, while lithium-ion batteries and battery parts are now subject to a 25% tariff.
Future of Tesla’s EV Lineup
The discontinuation of the Model 3 RWD may impact Tesla’s EV lineup in the U.S. Moving forward, Tesla may focus on producing EVs with batteries that are not subject to increased tariffs. The shift away from Chinese-made LFP batteries could lead to changes in Tesla’s manufacturing and supply chain strategies. The automaker may explore alternative battery sources to ensure that its EVs remain competitive in the U.S. market.
Consumer Reaction to Model 3 RWD Discontinuation
Tesla enthusiasts have noticed the discontinuation of the entry-level Model 3 RWD and have expressed concerns about the impact on consumer choice. While the Model 3 RWD was the most affordable version of Tesla’s electric vehicle lineup, its removal from the U.S. market has prompted consumers to consider other trim options. The Model 3 RWD Long Range, which is now the entry-level version of the Model 3, offers a higher range and performance at a slightly higher price point.
Conclusion
The discontinuation of the entry-level Model 3 RWD in the U.S. marks a shift in Tesla’s EV lineup in response to increased tariffs on Chinese-made electric vehicles and batteries. Tesla’s decision to no longer offer EVs with Chinese-made LFP batteries reflects the challenges faced by automakers in navigating trade policies. Moving forward, Tesla may explore alternative battery sources to ensure the competitiveness of its EVs in the U.S. market. Consumers will need to adjust to the changes in Tesla’s lineup and consider other trim options that offer a balance of range, performance, and affordability.
Read the full article here
