Published: Tue, October 16, 2018
Finance | By Loren Pratt

Tesla Buyers to Lose $7500 Tax Credit; Deadline Is October 15

Tesla Buyers to Lose $7500 Tax Credit; Deadline Is October 15

Tesla has given buyers a deadline of Monday to order a vehicle if they want the full $7,500 federal tax credit. Tesla in July said it had delivered 200,000 electric cars in the US, which means the tax credit will begin to shrink for Tesla buyers after October 15. "They simply want a Tesla".

The tax credit has been controversial, especially on luxury cars such as Tesla, whose buyers could probably afford the auto without the tax credit.

When Tesla crossed the 200,000 threshold in July, it started the clock on an 18-month phase-out process. A day later and you are looking at a tax credit of only $3,750. Then on July 1 it will drop in half again to $1,875, before going away altogether at the end of the year.

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

So anyone thinking about buying a Tesla auto has a powerful incentive to take delivery of the vehicle before the end of 2018. It should be noted that while Tesla is the first US automaker to hit the 200,000 EV mark, General Motors and Nissan are not far behind.

The new time-sensitive offer has the potential to give sales a major boost, but it also comes with the challenge of delivering the vehicles on time with the deadline the company has insisted on.

Orders placed after October 15 will be eligible for a $3,750 credit and delivery by June 30.

Tesla already has a strong incentive to deliver a lot of cars before December 31 to improve its fourth-quarter financial results. General Motors is expected to reach it next, with that GM will hit the limit either this quarter or early next year.

Interestingly, the provincial government said that while the program would end on September 10 for those who have their vehicle delivered, registered, and plated if it was purchased from a dealer - the rule did not cover those who ordered their electric and hydrogen vehicle directly from the manufacturer, like Tesla.

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