$7,500 Tax Credit for Teslas is About to Disappear
In the wake of production foibles and a growing Autopilot scandal, Tesla’s about to become a lot less attractive to the average consumer – the $7,500 federal tax credit for EVs will soon disappear.
The tax credit came about through the Energy Improvement and Extension Act of 2008 to “provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief, and for other purposes…”
The bill allowed for a $7,500 credit for EVs with a gross vehicle weight rating of not more than 10,000 pounds. That includes most popular consumer EVs like the Toyota Prius, the Nissan Leaf, and Tesla’s lineup.
Of course, Tesla EVs have always chased a higher price point than your average electric sedan, and even the Model 3 runs north of $35,000. The average new car in the US costs about $31,400, and that’s to say nothing of certified pre-owned vehicles or used cars.
So the $7,500 tax credit probably incentivized some purchases, and wealthy patrons certainly won’t turn down the savings, but many Tesla owners likely see it as a status symbol or mark of pride. It’s their pledge of allegiance to the green cause.
Wired’s Jack Stewart put it rather succinctly: “Things like carpool lane access, reserved parking, and the ego of going eco are more likely to sway the wealthy car buyers going for a Tesla Model S or Cadillac ELR.”
Stewart argues that the tax credit could’ve been extended by restricting it to certain income brackets.
Once Tesla sells its 200,000th car, consumers will accrue the $7,500 rebate for the rest of the quarter, before dropping to $3,750 for the next six months, $1,875 for the six after that, and then finally going kaput.
Read more here: https://www.wired.com/story/tesla-federal-tax-credit-model-3/
