This means that if you want a Tesla and that $7,500 tax credit, you will have to reserve one by October 15 and pay for it before the year ends, according to Engadget.
In July, Tesla confirmed that during the first week of the third quarter, they hit the 200,000 EVs sold mark.
The federal tax program works this way: “Purchases delivered from January 1st to June 30th, 2019 will only get a $3,750 credit, while those delivered from July 1st to December 31st, 2019 will only get $1,875. After that, Tesla will no longer be able to offer tax incentives.”
On Tesla’s EV incentive support page, consumers will also find information regarding additional electric vehicle incentives for customers given out by states and utility companies, often taking the form of a rebate. Rebates can be claimed immediately after purchase, while tax credits are claimed when filing income taxes.
It should be noted that while Tesla is the first U.S. automaker to hit the 200,000 EV mark, General Motors and Nissan are not far behind. And right now, Tesla’s declining tax credit could put it at a disadvantage over other EV makers, like Mercedes-Benz, BMW AG, and Audi AG which are bringing cars on the market with a full tax credit available.
Loss of the tax credit
But the big question on everyone’s mind is the possibility of losing the EV tax incentive altogether. Readers will remember what happened in Ontario in July when Progressive Conservative Premier Doug Ford canceled the province’s cap and trade program – leaving Tesla buyers owing $14,000 extra on their new Teslas.
Interestingly, the provincial government said that while the program would end on Sept. 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.
But after Doug Ford’s Progressive Conservative government lost in court against the California-based electric car company in September, Tesla owners got to keep their $14,000 rebates, after all. The Ontario Superior Court ruled the Tories “unlawfully targeted” the automaker when they announced the phasing out of subsidies on electric vehicles in July.
Will U.S. tax credit law change?
The law governing tax credits for electric vehicles could end if some Congressional Republicans have their way this year. Legislation introduced on Tuesday this week by Republican Senator John Barrasso of Wyoming would end the $7,500 tax incentive for electric vehicles.
The legislation would also impose “a federal highway user fee on alternative fuel vehicles,” which would then go into the Highway Trust Fund, according to a committee summary.
“The electric vehicle tax credit largely benefits the wealthiest Americans and costs taxpayers billions of dollars,” Barrasso said in a statement. “My legislation levels the playing field for all drivers across America.”
On the other side of the aisle, Vermont Democratic representative Peter Welch wants to eliminate the 200,000 EV ceiling and instead give EV makers a 10-year limit on tax credits for buyers.
There is no doubt that the Federal Highway Fund has been facing declining federal fuel tax monies, simply because of the greater fuel efficiency and greater use of EVs. And our transportation infrastructure is in dire need of an upgrade.
