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.