• Tesla dropped the price of the Model 3 sedan by $1000 on Thursday.
• The Long Range and Performance versions of the Model Y also received a $2000 price cut, with the base Model Y officially joining the lineup.
• The price reductions come as the $7500 tax credit for the base Model 3 will be halved on April 18.

If you’ve been on the fence about buying a Tesla Model 3, now’s the time to decide. In anticipation of a reduced federal tax credit starting later this month, the company reduced the price of the single-motor rear-drive sedan by $1000 on Thursday.

“Based on new IRS guidance, the $7,500 credit will be reduced for Model 3 Rear-Wheel Drive on April 18 to $3,750,” the automaker said on a Federal Tax Incentives section of its website.

The reduction comes because the lithium-iron-phosphate battery used in the base model 3 is the only battery from Tesla’s U.S. lineup that sources its cells from China. For a vehicle to qualify under the Inflation Reduction Act, it must be assembled in the U.S. even to be considered for qualification. On top of that, a percentage of its battery minerals must be sourced from a specific list of free-trade partners (not including China), and lastly, its battery cells must be assembled in North America.

That means that from now until April 18, the Model 3 has a starting price of $43,630 and qualifies for the full $7500 credit. After that, the credit will be cut in half. As to what Tesla will do with Model 3 pricing—your guess is as good as ours.

In other Tesla pricing news, the Long Range and Performance versions of the Model Y also received a $2000 price cut on Thursday and now start at $54,630 and $58,630, respectively.

Additionally, a base version of the Model Y with 279 miles of range was added to the lineup on Tesla’s website. The base model comes with a small discount to the Long Range model, and starts at $51,630. It was previously limited to inventory models and wasn’t listed next to the Long Range and Performance Models on the website, with Tesla opting for more of an In-N-Out secret menu approach. Tesla notes on its website that all versions of the Model Y will remain eligible for the full credit beyond April 18.

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