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Tesla sells 200,000th vehicle, starting phaseout of federal tax credits

13 July 2018

The automaker has now sold a total of over 200,000 electric vehicles in the US, which means that that the $7,500 federal tax credit that its cars have been eligible for will begin to phase out on January 1, 2019, when it drops to $3,750, followed by a further reduction to $1,875 on July 1 and its full elimination at the end of the year.

Farewell, tax credit, we barely knew ye. The credit is cut in half for vehicles delivered January 1 - June 30, 2019, then slashed again to $1,875 for deliveries from July 1 - December 31.

Tesla has also started changing its strategy for the Model 3. The Model 3 missing out on unlimited inclusive Supercharger access, for instance, was one disappointment for buyers of the most affordable vehicle; now, the dwindling tax credit could further disappoint.

Tesla's Electric Vehicle Incentives page shows that the federal tax credit of $7,500 is valid for vehicles delivered on or before December 31, 2018. The incentives have certainly helped the automaker - as they have other manufacturers producing electric cars - to gain traction, but those advantages have begun to shrink a little as Tesla adoption picks up. The reasoning behind the law was that by the time the credits start to phase out, battery costs will be lower and the cars will naturally command less of a premium relative to conventional cars.

The clock is ticking for Tesla customers looking for incentives on their auto purchase.

Here’s the heartwarming story of why the Gboard Morse Code option exists
The study was led by Al Ross, who wrote a grant funding the creation of a Morse code communicator for disabled children. The project was developed in collaboration with Tania Finlayson, an assistive tech developer with cerebral palsy.

Tesla boss Elon Musk has revealed more specifications for a 155mph all-wheel-drive Performance version of the Model 3 created to rival the BMW M3. So far, the company is only building high-end versions of the Model 3 for significantly higher prices.

Tesla is the first automaker to begin the credit phaseout, which will impact some customers of its Model 3 sedan. But two calendar quarters after a company sells its 200,000th electric vehicle in the U.S., the tax credit begins to phase out.

At the end of June, Tesla, as well as GM, was said to be very close to hitting the 200,000 US delivery cap.

Neither Tesla nor GM have said if they have plans to reduce the upfront prices of their cars as the credits wind down.

Tesla sells 200,000th vehicle, starting phaseout of federal tax credits