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$7500 Tax Credit Might Be Expired By Model 3 Delivery

$7500 Tax Credit Might Be Expired By Model 3 Delivery

http://www.edmunds.com/fuel-economy/the-ins-and-outs-of-electric-vehicle...

The above link is from an old Edmunds.com article from October 2013. If it still holds true, the Model 3 will be at a tax disadvantage to GM's Bolt because of the 200K vehicle limitation. Given That Tesla has already delivered over 100K Model S's by the end of 2015 and expects to deliver 90K Model S's and Model X's in 2016. It is obvious that by the time the Model 3 gets delivered in late 2017, Tesla will have already sold almost 300K Model S's and X's. Have there been any changes to the Federal Tax Credit rules and this is old news or is this something that no one took into account when calculating the final cost of the Model 3?

Any thoughts?

carlk | 22 maart 2016

That number is for total worldwide sales. You need to calcualte US sales which is probably around half of that. It's very unlikely the limit will be reached by end of 17'.

Tâm | 22 maart 2016

For me, when there is a cap, tax incentive is a bonus, not an expectation because there's no way to predict that I can get it.

That's why when Elon talks about the price of Model ≡, he always say without any tax incentives, not after tax incentives.

georgehawley.fl.us | 22 maart 2016

And it doesn't simply disappear. Like "old soldiers" it will fade away following the IRS formula: beginning in the second quarter after the quarter in which 200,000 US sales have been achieved. For the following two quarters the credit will be $3750 and for the subsequent two quarters it will be $1875. If Tesla delivered 50,000 cars total in the US through 2015 and continues to grow at 50%/year (a tall order), cumulative deliveries in the US will be 88,000 by the end of 2016, 145,000 by the end of 2017 and 230,000 by the end of 2018. At this rate the phase out would begin at the end of 1Q2019, if 200K is reached in 3Q2018. It would be completely phased out at the end of 2019.

Anyone see it differently?

logicalthinker | 22 maart 2016

however, it is clear that as it stands, only the early Model 3 owners will get a tax credit.

Red Sage ca us | 22 maart 2016

If overall sales of Model S and Model X end up being even with each other, at some point over 50,000 units Produced of each per year... And 40% of Model S and 60% of Model X are Delivered in the US... That means that 100,000 units of those cars would reach US Customers during both 2017 and 2018. Had the ramp-up of Model X been much, much faster, even that would be a very conservative estimate. The Chevrolet BOLT will certainly be at a disadvantage as compared to Model ≡ because of a lack of Supercharger access, econobox Styling, and relatively poor Performance.

georgehawley.fl.us | 23 maart 2016

@logical: Yes, if two years worth of cars constitutes"early". In the meantime maybe politicians will decide the incentives are a good thing and will extend them. One can dream.

buickguy | 23 maart 2016

And here's one more link on the subject, including some delivery calculations --
https://forums.teslamotors.com/forum/forums/when-does-tesla-reach-200000...

Haggy | 23 maart 2016

For those who wouldn't be eligible for the entire incentive, there might not be a loss even when the credit starts to phase out. In some places such as California, if you aren't eligible for the credit because your income is too low, your state credit might be even higher. If you are under three times the federal poverty level. I think the state rebate will be $4000.

But as others have said, worldwide sales and US sales aren't the same. It will take twice the time if half the sales are in the US.

dd.micsol | 27 maart 2016

Well right now they have 139k cars internationally.
I suspect 90% US.
at 20k/quarter production that another 80k for 2016
2017 will be about 30k/quarter-so the 7500 incentives will be gone by the time model 3 rolls out the door.
I've given up on hoping for an incentive. If I get something great-if not-I'll have one kick butt car.
Now just imagine if it gets delayed. Stock tanks-and reservations go down-and I'll get my car sooner.
My bigger worry is the battery production. They can't produce a battery pack in 1:30 min/sec. They need to be able to produce a battery in 34 seconds to get it make and into the lifter installer machine. Lots of work still needing to be done.
YEY!

Chunky Jr. | 27 maart 2016

Elections have consequences. Depending on whom you vote for, you can either increase or decrease the chance that the credit will be renewed. If it is important to you, find out where your candidates stand on this issue, and if they don't have a stance, look at their history or the philosophy of the party they are affiliated with.

dd.micsol | 27 maart 2016

Chunky-you make a good point. No to Crump and no to Clint. That's all I know for sure. I might vote for Ross Perot again just to make a point.

georgehawley.fl.us | 27 maart 2016

@dd: last year I think about 50% of Model S deliveries were outside the the U.S.

deeageux | 28 maart 2016

GM has taken about 85k Federal Credits so far with the Volt, Spark EV and ELR.

Between now and first delivery of Model 3 Volt, Bolt, and CT6 PHEV should take at LEAST another 75k credits.

If there is a time when Bolt has credits available and Tesla does not it will be a short one.

dd.micsol | 28 maart 2016

george-I was talking all tesla cars sold /reserved. I don't care about one year. We're talking about the incentives to US.

Hi_Tech | 28 maart 2016

@dd.micsol - From all Tesla cars delivered in the last 2 years, roughly 50-55% have been for US, rest in other parts of the world. My "back of the napkin" estimates puts US sales by end of 2015 at around 80k.

Haggy | 28 maart 2016

I already wrote to my Congressman outlining the reasons I thought the credit should be expanded. It is supposed to benefit the consumer and stimulate growth in the EV segment, not benefit any given manufacturer, and it makes no sense to stop giving consumers a tax credit because of something a given manufacturer did (i.e. sell more cars) and steer a consumer toward a car he likes less, when the whole point is supposed to be to provide a stimulus for the consumer to buy an EV to get more EVs on the road. Critical mass will be achieved faster if the consumer has a choice of any EV, and if the credits stay in place until the overall percentage of EV saturation reaches a certain level.

My Congressman didn't disagree with me, but mentioned that it needs to be part of a multi pronged approach toward energy independence and this is just part of it. Of course given that he represents Fremont, I'm sure he had no problem figuring out that I meant Tesla.

Hi_Tech | 28 maart 2016

@Haggy - Congressmen NEVER disagree with voters!
That said, I commend you on reaching out to your congressman, instead of just complaining, like myself.

PhillyGal | 28 maart 2016

Tesla is very very aware of the tax credit phase out rules and where possible, I bet they will structure deliveries accordingly. I'm sure that 200,000th US customer wouldn't mind waiting longer for his/her car if doing so would push it into a new quarter and thus buy time.

PhillyGal | 28 maart 2016

...buy time for tons of other owners to get the credit.

JuJoo | 28 maart 2016

@Philly

Except priority goes to previous owners and those who customize Model ≡ with the most options. Those would most likely be the people who need the tax incentives the LEAST.

deeageux | 28 maart 2016

@JuJoo

And the people with the tax liability to actually take full advantage of the tax credit. I am sure Tesla does not want to lease the first 100k Model 3s. That is a large cash outlay for Tesla to float or for the banks that have no Model 3 history to base their forecast residuals.

In the past Tesla has prioritized shipping , like in Denmark, to allow the maximum amount of its customers to take advantage of an expiring tax benefit.

If you are a resident of the USA and put a deposit down by 4/1/16 with the intent of buying a base Model 3 I am almost sure you will get it delivered in time to take advantage of the full Federal Credit. IF you procrastinate, well then that is your own fault. Remember, there is not a 200k hard cap. As Philly implies, if Tesla times its American deliveries strategically, Tesla will have almost a full 6 months after its 200,000th American delivery to continue delivering Tesla's with the full tax credit.

bj | 28 maart 2016

There are no incentives in Australia whatsoever for EVs. We pay full retail price.

sklancha | 28 maart 2016

I wish I had a good enough memory to remember who pro.pted my resp9nses....

But I dont. Nuff said.

When I initially started looking into buying an EV in Oct 2013, I was exceptionally ignorant to who was who and which manufacturer turers were top dog. During this time I also learned about the tax credit benefit ... and design limitation. My first thought was about how.unfair it seemed. Why would we take the manufacturers willing to leap early (taking the highest risk and responsibility) and handicap them when they are finally hitting it big. Work hard. Take risk. Build great... then the stragglers learn from early manufacturer risk... build a car of equal value, give-or-take, will have a $7500 advantage over the real risk takers.

Nissan, Gm, and Nissan will be $7500 more expensive than Audi, BMW, and other late comers. If the government truly wants to see progress, they ought to provide incentive to the risk takers for their effort. And I thought this thought when.I knew NOTHING about who the players were.

Just sayin...

sklancha | 28 maart 2016

I wish I had a good enough memory to remember who pro.pted my resp9nses....

But I dont. Nuff said.

When I initially started looking into buying an EV in Oct 2013, I was exceptionally ignorant to who was who and which manufacturer turers were top dog. During this time I also learned about the tax credit benefit ... and design limitation. My first thought was about how.unfair it seemed. Why would we take the manufacturers willing to leap early (taking the highest risk and responsibility) and handicap them when they are finally hitting it big. Work hard. Take risk. Build great... then the stragglers learn from early manufacturer risk... build a car of equal value, give-or-take, will have a $7500 advantage over the real risk takers.

Nissan, Gm, and Nissan will be $7500 more expensive than Audi, BMW, and other late comers. If the government truly wants to see progress, they ought to provide incentive to the risk takers for their effort. And I thought this thought when.I knew NOTHING about who the players were.

Just sayin...