When an automaker reaches 200,000 EV deliveries, the tax credits begin to phase out after one full quarter passes following the quarter in which the auto manufacturer has hit the 200,000-delivery mark.
Tesla has sold 200,000 electric vehicles in the US, Electrek first reported Thursday, which means its customers will start to lose access to a $7,500 tax credit.More news: Netflix knocks HBO off its throne, as Emmy voters spread the wealth
Tesla confirmed to Business Insider that it had passed the 200,000-vehicle threshold. As of July 2, the company said it had about 420,000 preorders for the vehicle that had not been fulfilled, and customers are not entitled to the tax credit until their vehicle is delivered. From Jan. 1, 2019 until June 30, the credit will be reduced to $3,750. Vehicles delivered in 2020 and beyond will not be eligible.
Until now, for example, Tesla has been focusing Model 3 production on effectively one core variant: the rear-wheel drive, Long Range pack with the premium interior.More news: Time machine throne speech transports province to the '90s: Opposition
It's unclear whether the tax credit system - which also includes state incentives and rebates, that vary depending on where owners live - will be overhauled and change all of this again. The incentives have certainly helped the automaker - as they have other manufacturers producing electric cars - to gain traction, but those advantages have begun to shrink a little as Tesla adoption picks up.
Despite this anti-selling, however, Model 3 reservations remained high, with Tesla most recently confirming that it still has a backlog of 420,000 orders for the electric vehicle. The Model 3 missing out on unlimited inclusive Supercharger access, for instance, was one disappointment for buyers of the most affordable vehicle; now, the dwindling tax credit could further disappoint.More news: How the British media reacted to England's World Cup exit