Shortly after Tesla launched the Model 3 Highland refresh towards the end of last year, the US federal EV tax incentive rules changed, cutting the potential discount in half for eligible buyers because of Tesla's use of Chinese LFP cells in the new Model 3's battery pack. Now, the dual-motor Tesla Model 3 Long Range AWD has been able to regain the full US EV tax incentive, making it eligible for up to $7,500 off for applicable buyers (via Current Tesla on X).

This makes both the Model 3 Performance and Model 3 Long Range AWD eligible for the full $7,500 US federal tax incentive, leaving only the base RWD Model 3 without any tax incentive. It also means that those who qualify for the full $7,500 federal incentive can get a Model 3 Long Range AWD for as little as $1,000 more than a base Model 3 RWD. News of the federal tax credit eligibility comes shortly after Tesla reduced the price and APR on Model 3 loans in order to move units.

It's unclear why the Tesla Model 3 Long Range suddenly qualifies for the federal tax incentive, but a switch in raw material supply to come in under the minimum battery sourcing requirements seems likely.

Tesla claims that the Model 3 Long Range AWD has 341 miles (ca. 549 kilometres) of range, compared to the Performance's 303 miles (ca. 488 kilometres), and the Model 3 RWD's 272 miles (ca. 438 kilometres). The LR AWD Model 3 also isn't that far off the Model 3 Performance when it comes to acceleration, with a 0–60 mph time of 4.2 seconds, compared to the Performance's 0–60 mph sprint of just 2.9 seconds — a substantial difference, but not one that's likely to matter to those in the market for a daily driver rather than a sports car.

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Tesla Model 3 Long Range now qualifies for $7,500 EV tax credit in the US! https://t.co/2uyhV7fnwc pic.twitter.com/GG9SvNTb5h

— Current Tesla (@currenttesla) June 17, 2024