Tesla Model 3 electric vehicles are lined up in a lot in Richmond, California. Picture: REUTERS/STEPHEN LAM
Tesla Model 3 electric vehicles are lined up in a lot in Richmond, California. Picture: REUTERS/STEPHEN LAM

Bengaluru — Electric carmaker Tesla said all orders for its vehicles placed by October 15 are eligible for a full federal tax credit of $7,500 and such customers’ cars will be delivered by the end of the year.

Under a major tax overhaul passed by the Republican-controlled US Congress late last year, financial incentives in the way of tax credits that lower the cost of electric vehicles are available for the first 200,000 such vehicles sold by a carmaker. The tax credit is then reduced by 50% every six months until it phases out.

In July, Tesla said it delivered 200,000 electric cars to buyers in the US, meaning tax credits will now begin to be lowered while rivals such as Mercedes-Benz, BMW and Audi will bring electric models to the market with a full tax credit in place.

Buyers of electric cars get full tax credit for the quarter in which the company hits the 200,000 delivery mark and the next.

The declining tax credit is seen as putting Tesla at a disadvantage over newer entrants to the market, whose first 200,000 models will qualify for a full tax credit.

It also adds to a few bad months in which Tesla has faced delivery delays due to manufacturing bottlenecks and deferred the much-needed revenue when it continues to spend heavily on Model 3 production fixes as well as projects in the pipeline.

Electrek, which earlier reported on the deadline on new orders, described the company’s latest move as an attempt to boost sales. 

However, the incentives could end if a new bill, introduced by a Republican senator to end the federal tax credit for electric cars altogether, is passed, Electrek reported.

Reuters

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