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

Elon Musk

Tesla's US Tax Credit Set To Come To An End | OilPrice.com

Customers will still be eligible for the full $7,500 credit for vehicles delivered on or before December 31, 2018. As of next January, subsidies will be cut in half before being phased out completely a year later.

Tesla has also started changing its strategy for the Model 3.

The incentives were created to boost electric vehicle sales by giving buyers a tax credit that would bring prices in line with competitive gas cars. 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 clock is ticking for Tesla customers looking for incentives on their auto purchase.

Currently, the lowest-priced version of the Model 3 on offer is a rear-wheel-drive edition equipped with a premium interior and long-range (310-mile) battery pack for $43,000, with deliveries estimated in three to five months. The production milestone was finally attained by the company during the final week of June, but it did not escape criticism from the company's doubters, some of whom predicted that the Model 3's 5,000/week "burst" production would be unsustainable.

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Tesla is the first automaker to begin the credit phaseout, which will impact some customers of its Model 3 sedan. Without the tax credit, those later buyers may get less auto for the same effective price.

Tesla has delivered 200,000 vehicles in the United States, exceeding the threshold above which federal tax credits for EVs start to phase out, a spokesperson for Tesla said on Thursday-and its website has updated its incentives schedule.

Tesla is the first vehicle manufacturer to hit the threshold in the USA, and the end of subsidies could slow sales as the company ramps up production of.

Neither Tesla nor GM have said if they have plans to reduce the upfront prices of their cars as the credits wind down. The Model 3, after all, would likely determine whether Tesla could achieve its target of becoming profitable this third or fourth quarter.

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