One of the most attractive factors in purchasing a Tesla Inc (NASDAQ:TSLA) car is the federal tax credit that’s applied to the purchase.
The subsidy has drawn the ire of some critics that believe it places Tesla, as an electric-only automaker, at an unfair advantage. Like it or not, the company has taken full advantage of the tax break.
But now, as Philly.com reports, buyers facing long wait times to actually get their vehicles may not get the full tax break — if at all:
There’s a chance they could lose out on the generous, early adopter $7,500 per electric vehicle federal tax credit that’s offered to the first 200,000 buyers of all Tesla vehicles. The full tax credit is reduced to 50%, or $3,750, at the beginning of the second calendar quarter after the 200,000-threshold. It further reduces to 25%, or $1,875, at the beginning of the fourth quarter and is eliminated at the beginning of the sixth quarter.
With a total Tesla sales count of about 120,000 (including a reported 84,000 last year), the availability of full tax credits may be coming to an end. And the credit be reduced as early as the first quarter next year, but more likely in the third quarter of 2018, suggested an analysis by CleanTechnica data cruncher Loren McDonald.
What’s worse, Tesla insists on delivering the vehicles beginning with those closest to its factory first. When the Model 3 comes out later this year, it’ll be sent to California buyers, then Midwestern buyers, then finally to East Coast buyers. So, for example, someone who lives in New York that plunked down a $1,000 deposit on the first day possible will still have to wait for more than a year from now to receive their car.
By then, the tax subsidy could be all but non-existent, which likely won’t sit well with many buyers.
It also could begin to eat into demand for Tesla’s cars. The recent expiration of a major EV incentive in Singapore caused Tesla sales to plunge there, so there is reason to believe U.S. demand could suffer too.
Tesla Inc shares were trading at $380.50 per share on Wednesday morning, up $4.55 (+1.21%). Year-to-date, TSLA has gained 78.06%, versus a 9.79% rise in the benchmark S&P 500 index during the same period.