Tesla hits key deliveries threshold and that means federal tax credit will be phased out
Tesla Inc. has hit a key threshold for deliveries that mean the $7,500 federal electric vehicle tax credit for new owners is about to start being phased out.
As first reported by news website Jalopnik, Tesla’s TSLA, +0.68% website now includes on its vehicles incentives support page the information that a customer who takes delivery of a vehicle on or before Dec. 31 is eligible for a $7,500 tax credit. From Jan. 1 to June 30, 2019, that credit is halved to $3,750, and halved again for the period from July 1 to Dec. 31, 2019.
The phase-out was slated to start as soon as an electric vehicle maker reaches 200,000 deliveries.
The news is significant for those customers who are waiting for a Model 3 entry-level vehicle at the base price of $35,000, as that model is not expected to be available until 2019.
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Tesla and other car makers including General Motors Co. GM, +0.23% have lobbied to have the credit expanded as an incentive for drivers to switch to the more environmentally-friendly technology.
Tesla declined to comment to Jalopnik.
Tesla said it delivered 40,740 vehicles in the second quarter, which was below consensus estimates for 48,874. But the company said it reached a key Model 3 production goal of 5,000 a week.
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Shares were up 0.1% on Thursday, and have gained 2.5% in 2018, while the S&P 500 SPX, +0.11% has gained 4.2% and the Dow Jones Industrial DJIA, +0.38% has added 0.5%.
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