All Model 3 versions now qualify for the federal tax credit including the cheapest Tesla

If the base Model 3 RWD made little sense for Tesla's American roster so far, it would've become downright pointless now that President Biden's new tariffs on Chinese electric vehicles and components have kicked in.

Earlier this year, the White House announced a quadrupling of tariffs on electric cars or their parts sourced from China that went into effect on September 27.

While the 100% tariff on Chinese EVs is a drastic increase from the previous 25% levy, it is largely symbolic as there are no such cars on the market in the US. However, given that China is home to the largest EV battery makers, the bump of lithium cell import tariffs from 7.5% to 25% is affecting many automakers, including Tesla.

So much so, that it has now discontinued the base Model 3 RWD version, the cheapest Tesla vehicle so far.  It was the cheapest Tesla just in MSRP numbers, though, but in reality its pricing turned out to be higher than the next, RWD Model 3 Long Range trim.

Only the base Model 3 RWD is made with affordable iron phosphate LFP batteries sourced from the world's largest battery maker CATL. Since CATL hails from China, though, the cheapest RWD Model 3 stopped qualifying for the federal tax credit.

Unlike the base RWD Model 3, the recently reintroduced Tesla Model 3 LR RWD comes with a battery pack that makes it eligible for the full $7,500 federal tax credit amount. This brought its price down from $42,490 to just $34,990, making it the de facto cheapest Tesla car available now.

Granted, the price difference with the base Model Y RWD is now just $2,500 and a lot of people could prefer to pick America's soon-to-be bestselling car. The new cheapest Tesla also comes with a much longer, 363-mile range, though, so the automaker's portfolio seems much more balanced now that the RWD Model 3 is out for good.

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