Order a Tesla by Monday, October 15th to receive a federal tax credit of up to $7,500. Cars ordered from the automaker through that date will be eligible for the full $7,500 tax credit, which starts phasing out at the end of the year. According to Reuters, Tesla has said that anyone who buys a car by Monday will have their car delivered before midnight on New Year’s Day.
The tax credit derives from rules included in the tax bill Congress passed last December. Incentives for electrified vehicle buyers begin to phase out once an automaker has sold its 200,000 qualified vehicles. Since Tesla crossed the program’s 200,000 car threshold in July, the credit drops to $3,750 for six months, then $1,875 before it’s gone altogether at the end of 2019.
The rule applies to every automaker that sells EV or Hybrid cars in the US. Plug-in hybrids are counted the same as full electrics even though their battery size based incentives are often lower.
This federal program is independent of any incentives offered at the state level.
Chevrolet and Nissan are the only two other automakers close to hitting the 200,000 mark. General Motors, which makes the Chevrolet Bolt EV, will see its credits cut by mid-2019. Nissan, which sells the Leaf EV, will be the next manufacturer affected.
By the end of 2019 there will be at least a dozen products competing with the three Tesla Models and most will retain their $7,500 incentives. Tesla sales have kicked into high gear with the automaker largely resolving what Elon Musk had called “production hell” at its Nevada battery plant and its California assembly line. The factory in Fremont, California, is rolling out more than 6,000 vehicles a week as Tesla races to fill a backlog of reservations and new orders.
During the 3rd quarter of 2018 alone – Tesla delivered twice as many of its new Model 3 sedans as it had during the first six months of 2018. That drove total U.S. sales to nearly 70,000 vehicles for the July to September quarter. The company confirmed it delivered almost 84,000 cars between July and September, “more than 80 percent of the vehicles we delivered in all of 2017.”
Tesla has not yet said if it will adjust the prices of its vehicles to compensate for the reduced credit. The cheapest car it currently offers is a rear wheel drive Model 3 that starts at $49,000, while the promised entry level $35,000 version isn’t expected to go on sale before next year.
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