Using Chinese LFP Battery, Tesla Forced To Stop Production Of Affordable Model 3 Variants In The US

Tesla's electric car production process. (Doc. X/@Tesla)

JAKARTA Tesla's electric car manufacturer has stopped producing the most affordable variant of the Model 3 in the United States (US). This announcement comes through the company's official website Wednesday, October 2, as quoted by Reuters, October 3.

The variant that was terminated was Model 3 Standard Range Rear-Wheel Drive, which sold for US$38,990 (equivalent to Rp597 million).

It is said that this variant car uses lithium iron phosphate (LFP) batteries sourced from China. The decision follows a new US government policy that increases import rates from China, including a 100 percent tariff for electric vehicles and 25 percent for EV batteries and other important minerals.

As a result, the Model 3 variant of Long Range Rear-Wheel Drive is now the most affordable option in Tesla's ranks in the US, at a price of 42,490 US dollars (around Rp651 million).

The existence of this new tariff requires vehicle manufacturers using Chinese-made components, such as LFP batteries, to no longer qualify for federal tax credit of US$7,500 (equivalent to Rp115 million) which was previously given to electric car buyers in the US.

On the same day, Tesla also reported an increase in shipments in the third quarter by successfully producing around 470,000 vehicles and shipping around 463,000 vehicles but this figure is still below market expectations. This shows that the incentives and financing offered are not sufficient to significantly encourage consumer interest.