Tesla confirms hitting federal tax credit threshold, $7,500 credit cut in half at end of 2018

After refusing to confirm the timing of the federal tax credit phase-out for months, Tesla has now confirmed that it has hit the 200,000th US delivery threshold, which triggered the phase-out period.

Tesla buyers will lose the full $7,500 credit by the end of the year unless the law is changed, hitting $3750 for the first half of 2019 and $1875 in the second half of 2019.

We have often estimated when Tesla would make that 200,000th US delivery since it affects buyers so significantly – especially those thinking about buying the Model 3 with standard battery pack, which is only supposed to enter production by the end of the year.

Our best guess was that Tesla would push some US deliveries to early in the third quarter in order to hit the threshold in July to maintain the full credit by the end of the year.

It looks like it is exactly how it played out.

Tesla has updated its EV incentive support page last night to reflect the phase-out of the federal tax credit – warning buyers:

The following federal income tax credits are available to anyone who purchases a new Tesla Model S, Model X or Model 3:

Federal Tax Credit For Vehicles Delivered
$7,500 On or before December 31, 2018
$3,750 January 1 to June 30, 2019
$1,875 July 1 to December 31, 2019

A Tesla spokesperson confirmed that they have hit the 200,000th delivery threshold this month.

Tesla has become the first automaker to reach the threshold and trigger the phase-out period. GM and Nissan are not too far behind however.

As we recently reported, there’s a new bill in Congress that is attempting to remove the delivery limit for the federal tax credit and replace it with a time limit.

But the chances of the new bill passing are low considering the house is controlled by the GOP who tried to remove the tax credit altogether just a few months ago before dropping the idea.

Electrek’s Take

Even though it’s exactly what we expected, I am glad that Tesla is finally confirming it because that’s something that is affecting the buying decision of many people in the US.

This is especially true when it comes to waiting for other Model 3 configurations vs. getting one that is available this year.

The best example is a Model 3 reservation holder waiting for a Model 3 with standard battery pack who might not want to pay $9,000 for the Long Range pack, but they could reconsider it if it means losing $3,750 in tax credit.

I am not necessarily saying that people waiting for the standard battery pack won’t have access to the full tax credit, but it looks extremely unlikely at this point with Tesla’s “6-9 months” delivery window.

What do you think? Let us know in the comment section below.

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