Tesla Will Be First Automaker To Lose the Federal Tax Credit For Electric Cars (theverge.com)

Tesla has confirmed to Jalopnik that its 200,000th vehicle has been delivered this month, meaning the full $7,500 federal tax credit for electric cars will slowly be phased out. Tesla is the first automaker to reach this mark. "GM is close, too, while Nissan, Ford, and others still have a ways to go," notes The Verge. From the report: Tesla customers who take delivery of their cars -- regardless of whether it's a Model S, X, or 3 -- between now and December 31st, 2018, will still be eligible for the full $7,500 credit from the IRS. Customers who take delivery of their cars between January 1st and June 30th, 2019, will only be eligible for a $3,750 credit. And customers who take delivery of their cars between July 1st and December 31st, 2019, will be offered just $1,875. After that, the incentive is dead.

Put in place early on in the Obama administration, the tax credit was seen as a tool that could be used to encourage customers to buy plug-in electric or hybrid vehicles. This would simultaneously help advance the president's climate and clean energy goals while offering consumers a bit of a break while the cost of battery technology slowly came down. It was also meant to encourage manufacturers to push for greater advancements in that technology. The dollar amount was technically flexible; it was essentially a $2,500 credit with room to increase up to $7,500 depending on the battery capacity of the car being sold. The better the battery in a company's car, the better the rebate their buyers would get.

Comments

Re:Thanks Obama!

[Rei]

Or not..

Could have been structured differently...

[ClarkMills]

The way the thing is set up at the moment, as soon as a automaker hits 200,000 cars the subsidy decay clock begins for that automaker. Other manufacturers can amble up to the line and then take their swill from the trough at their leisure knowing their slice is reserved.

A better way would have been to have a larger shared trough of subsidy $ that is gobbled up and gone when it's gone. That would have accelerated EV manufacture as it would encourage more rapid adoption and penalise the slackards.

Re: Could have been structured differently...

[argStyopa]

Or maybe the best way could have been the free market with no subsidies for anyone?

Don't get me wrong, I'm appalled at the conventional auto company bailouts as well, and would just prefer that the federal government basically entirely got out of the business of picking winners and losers.

Re:Savings? Really no.

[Gravis Zero]

There's just no such thing as a cheaper way to power cars... just a different way of doing things.

Actually, it's much cheaper to power an electric car.

if there was a better way to move fuel, everybody would be going for it.

And everybody would move to electric cars if the cars themselves cost the same amount of money.

Eventually, EVs will be similarly priced to ICE cars and ICE will quickly evaporate. The problem we currently face is mass manufacturing batteries in a way that will lower their cost.

credits pre-date obama

[Anonymous Coward]

the electric vehicle tax credits began prior to obama's administration. it was tacked onto the bank bailout bill that was passed a month before the 2008 election.

Re:REAL businesses dont use subsidies

[Rei]

Amazing how quickly people forget history. This tax credit was established under Bush.

Re:Savings? Really no.

[Gravis Zero]

EVs will remain cheaper than ICE vehicles as long as they get to use the roads, bridges and tunnels for free.

Even if there was a 100% tax on the electricity used to power EVs, it would still be cheaper!

If you are serious about infrastructure taxes then you should tax based on damage done by weight. Big rigs with heavy loads do 10000x the damage as a your run of the mill two ton car. Trucking companies are effectively being subsidized by everyone else.