How Tesla will be able to get the full $7500 Fed Tax Credit beyond the 200,000th US car delivered

How Tesla will be able to get the full $7500 Fed Tax Credit beyond the 200,000th US car delivered

If the 200,000th car is delivered on QTRn, all cars delivered thereafter on QTRn and QTRn+1 will be eligible for 100% of the $7500 federal tax credit. It will benefit Tesla to have the 200,000th car milestone as early as possible on QTRn in order to maximize the volume of cars (post 200k) allowed to receive the full credit on QTRn and QTRn+1. Timing on week 1 of QTRn will be everything.

This illustration assumes that milestone to be in Q1 of 2018, but it can be shifted to any quarter (later in the year or earlier at Q4 2017). The rules for phaseout at follow-on quarters remain the same.

PhillyGal | 7 april 2016

Excellent illustration.

Matos.ray | 7 april 2016

If they plan it well, it def could happen

Octagondd | 7 april 2016

How many Model 3's will be produced in that time frame is the big question. How fast can they ramp up production? Will the S and X demand and production rate go down by then? Will there be any delays?

I think I am on record as guessing between 30-70k Model 3's will get the full credit depending on all the variables at play. The more the merrier. I am hoping they can hold off delivering 200,000 until April 1 or July 1, but also don't want to piss off all the patient people waiting for their Model S and X's to be delivered.

EVino | 7 april 2016

Good point. Is that April 1, 2018 or 2017?

ilovechem | 7 april 2016

Clearly the solution is when Tesla gets close to selling 199,900 cars in the USA, it should start stock pilling cars until at least the beginning of the next quarter

Octagondd | 7 april 2016

2018. If total Tesla production ramps at the rate they have stated, then there should be about 30,000 slots left in 2018 before hitting 200,000. That would probably take them to mid-February. It would also include maybe 10,000 Model 3's if the new production line can be up to that speed by then. If they have some delays, which is very likely, it might put them at delivering 200,000 in early April. This would be good in order to get the full two quarters, but even better is it gives more time for the Model 3 line to ramp up to more cars per month.

All of this is predicated on the predictions before the Model 3 reveal and we already have heard from Elon about re-thinking the ramp rate on Model 3 production, so it is quite tough to put a number on how many people may get the full credit. It is also very tough to put a number on Employees/current owners who have cars reserved.

It is exciting though. I assume, like baseball, this feeling will all wear off in the next couple months.

Bighorn | 7 april 2016

They don't need to slow production or stockpile, they can just redirect deliveries to China and Europe, kind of like they do already to maximize quarterly deliveries.

EVino | 7 april 2016

You're right, Bighorn. The timing and execution can be played fairly easily. If too much US delivery at Month 3 of any given quarter, route it to Canada, EU or APAC. Stockpiling for US might still be needed, because as soon as 200k is hit on that Week 1 of the Quarter, you want to turn on full spigot for US customers to maximize the Fed credit. It's an open ceiling for 12 weeks of deliveries on top of 200k. Many happy US customers!

Morlandoemtp061383 | 8 april 2016

If everyone who stood on line gets the 7500 dollar credit by tesla stockpiling so to speak, tesla would have customers for life.

PhillyGal | 8 april 2016

Trust that they're keenly aware of all this and will do whatever they can to maximize the credit. Like @Bighorn said - no need to stock pile, they'll just redirect to anywhere from Canada to China.

sj | 8 april 2016

I plan to canceled the order if I can't the $7500 credit. That is how I sold the car to the wife. Might have to get the Chevy Bolt if that is the case. I like the 3 since it is faster and looks better. The full credit is the deal breaker.

barb@duke | 8 april 2016

Thanks for the effort you put into this illustration. I shared it with my kids who are worried they will miss the tax credit. They found it reassuring.

adias.angel | 8 april 2016

I think you might be short one calendar quarter with 100% refund.

"one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold"

From the way this reads you get two calendar quarters AFTER the quarter you hit 200k. So in your example the Q3 would begin the phase out.

adias.angel | 8 april 2016

Oh sorry I misread that beginning with part. sigh You are correct.

finman100 | 8 april 2016

Per the cool chart above...June 30th, 2018 could be a BIG Tesla delivery day!