© 2018 by the Natural Gas Vehicle Coalition of California

Mercury News
Tesla tax credit to shrink next year as firm hits 200,000 U.S. sales

By Ethan Baron 

July 12, 2018


An incentive for people to buy a new Tesla electric car will start to fade next year, after Tesla hit a U.S. sales milestone that triggered the progressive demise of a federal tax credit.

Tesla, which had earlier refused to say how close it was to the 200,000 mark that triggers the first cut to the $7,500 credit, revealed on its website that it had reached that number.


People buying a Model 3, Model S or Model Y before the end of the year and receiving delivery will still receive the full credit (assuming they have a federal tax liability of $7,500 or more), according to a support page on Tesla’s site. It appears Tesla made the change to the site this week.


The credit will be cut in half, to $3,750, for Teslas purchased and received between January 1 and June 30 next year, according to Tesla. And that amount will be halved, to $1,875, for Teslas bought between July 1 and Dec. 31 next year. The tax credit is to disappear for Teslas bought after 2019.

Tesla has reported that it last month reached its twice-missed target of producing 5,000 Model 3s a week. The sedan is intended to be the electric vehicle for the masses, if and when a lower-priced version becomes available. The company says it has received nearly a half million orders for the car, and delivered thousands. It remains to be seen how many depositors will buy and receive their cars by year’s end, to receive the full $7,500 credit.