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200,000 federal tax credit limit includes Model S, X

200,000 federal tax credit limit includes Model S, X

Am I the only one mislead by the articles on the net?

Although the numbers might not be correct, I heard Tesla already sold 100k vehicle world wide. And around half of that in the US. Please correct me if this is wrong.

And Tesla's projection of selling more than 50k vehicles just on 2016, we have around 100k vehicles left for tax credit...

But since the credit will "phase out" not disappear instantly, more than 100k may get it.. If anyone have a better understanding of how this credit will "phase out" please help us out..

Thank you.

diegoPasadena | April 7, 2016

No, you pretty much nailed it. It includes all of a manufacturer's EVs.

"The credit begins to phase out for a manufacturer’s vehicles when at least 200,000 qualifying vehicles have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009)."

fyun89 | April 7, 2016

What's confusing me is the "phase out" part though. If you're 200,001st guy to buy one, will he get the full credit? Or will everyone, during the quarter of the year when Tesla sells over 200,000 cars, get full credit and get lower credit on the next quarter?

I couldn't find much info about this..

jordanrichard | April 7, 2016

The phase out starts the second quarter after 200,000 U.S. sales have been reached.

Also, you have to keep some things in mind about the $7,500 credit. Even for present buyers, it is not as if one can subtract the whole $7,500 from the price of their MS to come up with a net price.

Now the following numbers are not accurate but the logic is.

When you go to do your taxes and your tax liability is say $6,000 and out of your pay checks you paid $5,000 in taxes. The $7,500 credit wipes out your $6K liability and you get $5,000 as a refund. So it is that $5K that you can use to figure out your car's net cost, not $7,500.

So back to the M≡ and using my above numbers. Let's say the phase out started by the time you got your car and the available credit is now only $6,000. You would still get the same refund.

The very big problem with this whole EV credit is that everyone assumes they can simply subtract that amount from the price of the car. That is why Tesla is correctly stating a pre-credit/incentive price of $35,000 because not everyone will get the full $7,500 credit plus for those that do, it doesn't mean you are getting $7,500 back in real dollars.

GM is taking their usual deceptive approach by promoting a after tax credit price of $30K. The actual price of the Bolt will be $37,500. Again using my numbers to illustrate this. Bolt $37,500-$5,000 (refund)= $32,500 The M≡ $35,000-$5,000 (refund) = $30,000.

PhillyGal | April 7, 2016

Google "Tesla can hack the tax code" and find a recent Forbes article that explains it. I'm getting errors trying to get the link,

MarlonBrown | April 7, 2016

Lets say 70k Model S and X sold in 2017. In my speculation, if Tesla produces 5k in 2017, 20k Model 3 in Q1 and 20k In Q2 2018, those lucky b would be getting the full tax credit. I predict that 30-40% of these folks placing orders are gambling to get the tax credit. Once they learn there is not much left, many would back off.