Enlarge (credit: Tesla)

In the past, Tesla CEO Elon Musk has repeatedly claimed that his company's cars are appreciating assets . But this week, Tesla dropped the prices of its cars—and not for the first time this year. As we reported on Monday , despite sales growing by 36 percent globally, the automaker missed its ambitious target and will need to grow even faster in the remaining months of the year to satisfy investors.

Perhaps these cuts will help. The biggest price decreases are for the Model S sedan and Model X SUV. All versions of these electric vehicles are now $5,000 cheaper than they were last week, following similar $5,000 price cuts a month ago and much larger price cuts in January that saw the Model S Plaid shed $21,000 from its MSRP.

Model 3 sedans are now $1,000 cheaper across the board, marking their third price cut in recent months. A rear-wheel-drive Model 3 now starts at $41,990—in January, this version cost $43,990; it then dropped another $500 in February . Tesla notes that the RWD Model 3 will also lose half of the IRS clean vehicle tax credit starting on April 18, although all-wheel drive Model 3s and all Model Ys will still be eligible for the full $7,500 credit.

Enlarge / Until the beginning of this year, an EV's tax credit was determined by the storage capacity of its battery pack. Now, the tax credit is linked to local manufacturing of components and locally sourced critical minerals. (credit: Julian Stratenschulte/picture alliance via Getty Images)

It's been a confusing few months for potential electric vehicle customers after the introduction of complicated new rules for the clean vehicle tax credit at the beginning of the year. Now the rules are changing once again.

On Thursday, the Internal Revenue Service published a draft of new guidance for the $7,500 clean vehicle tax credit and said that starting on April 18, it will begin enforcing the domestic sourcing requirement for battery minerals and components. As a result, many new EVs may not qualify for the tax credit.

Tell me the rules again

As we've detailed before , the revised clean vehicle tax credit has quite a few conditions that must be satisfied in order for that vehicle to be eligible.

Enlarge / US Senator Joe Manchin (D-W.V.) is a millionaire thanks to coal, gas, and oil interests. He was responsible for rewriting the US electric vehicle incentives. (credit: Aaron M. Sprecher/Bloomberg via Getty Images)

US Senator Joe Manchin was instrumental in rewriting the nation's electric vehicle incentives , but now the West Virginia Democrat says he wants to sue the federal government "if I'm allowed to" in order to stop too many EVs from reaching US customers with battery packs that contain materials and components refined, processed, or manufactured abroad. The politician made the remarks during a panel on Wednesday, according to S&P Global .

Originally, the IRS tax credits offered to car buyers to incentivize them to purchase a plug-in electric vehicle were linked to the size of the car's battery. But as part of the Inflation Reduction Act of 2022, the rules were changed. Now, the $7,500 tax credit is only applicable to "clean vehicles"—either battery EVs or hydrogen fuel cell EVs, not plug-in hybrids.

Where do your minerals come from?

There are several more requirements , including final assembly in North America, but for most new EVs, the stumbling block is a requirement that battery components be domestically sourced.