Late Delivery? Tesla Says It'll Cover Your Tax Credit Shortfall

Steph Willems
by Steph Willems
late delivery tesla says itll cover your tax credit shortfall

Having rung the bell on 200,000 electric vehicle deliveries in the U.S., Tesla will enter 2019 without the ability to offer a full $7,500 federal tax credit to would-be buyers. While not nearly as attractive an incentive as the same amount applied to a lower-priced EV, it’s still free public dollars. And it’s better than $3,750.

Twice this past fall, Tesla CEO Elon Musk warned customers they’d need to order by a certain date in order to ensure a delivery date prior to January 1st. After receiving a holiday earful from dutiful customers now facing late deliveries, Musk put on the Santa suit.

“If Tesla committed delivery & customer made good faith efforts to receive before year end, Tesla will cover the tax credit difference,” the CEO tweeted on Saturday.

Under the rules laid out by the Obama administration (and kept in place by the Trump administration), the tax credit amount drops by half after automakers deliver 200,000 eligible vehicles in the United States. The halving comes one full quarter after the quarter in which the OEM hits the mark. For Tesla, that mark came in the third quarter of 2018, making the first quarter of 2019 the point at which the credit shaves half its bills. It halves again starting in July 2019, then disappears six months later.

While Tesla guaranteed timely delivery of vehicles purchased up to November 30th, it seems several slipped through the cracks. Musk later pinned the company’s promise to the top of his Twitter page. In response to a customer, the CEO added that deliveries of all Mid-Range Model 3 sedans (currently, the cheapest Tesla you can actually get your hands on) are expected before January 1st.

Once the credit halves and Musk’s IOUs run out, holdouts for the long-awaited base Model 3 will find themselves with less of an incentive than they may have initially anticipated. Musk claims production of the $35,000 car will begin in the first quarter of 2019. In October, he mentioned that offering a Model 3 at that price too soon would essentially sink the company.

[Image: Tesla]

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2 of 17 comments
  • Brandloyalty Brandloyalty on Dec 26, 2018

    No new prediction of when Tesla will go bankrupt?

  • Qwerty shrdlu Qwerty shrdlu on Dec 27, 2018

    There is only one prediction : "real soon now." And if it happens before the heat death of the universe, the anti-fanboys will claim this proves that they knew what they were talking about.

  • Matzel I am hoping that Vee-Dub will improve the UX and offer additional color options for the 2024 Mk8.5 refresh for Canada. Until then, I'll be quite happy with my '21 GTI performance pack. It still puts a smile on my face going through the twisty bits.
  • Stanley Steamer There have been other concepts with BYOT, that I have always thought was a great idea. Replacing bespoke parts is expensive. If I can plug in a standard 17" monitor to serve as my instrument panel, as well as speakers, radio, generic motors, batteries, I'm for it. Cheaper repair, replacement, or upgrade costs. Heck I'd even like to put in my own comfy seats. My house didn't come with a built in LaZboy. The irony is that omitting these bespoke items at the point of sale allows me to create a more bespoke car as a whole. It's hard to imagine what an empty rolling monocoque chassis would look like capable of having powertrains and accessories easily bolted on in my garage, but something like the Bollinger suv comes to mind.
  • Iam65689044 Sometimes I'm glad the French don't sell in America. This is one of those times.
  • SCE to AUX I was going to scoff, but the idea has some merit.The hard part would be keeping the weight and cost down. Even on the EPA cycle, this thing could probably get over 210 miles with that battery.But the cost - it's too tempting to bulk up the product for profits. What might start as a $22k car quickly becomes $30k.Resource-deprived people can't buy it then, anyway, and where will Kyle get the electricity to charge it in 2029 Los Angeles?
  • SPPPP How does one under-report emissions by 115 percent? If you under-report by 100 percent, that means you said your company's products and operations cause no emissions at all, right? Were these companies claiming that their operations and products clean the air, leaving it better than when they got there?On the other hand, if someone was trying to say that the true emissions number is 115 percent higher than was reported, then the actual under-reporting value would be 53.5 percent. True emissions would be set at a nominal value of 100. The reported emissions would be 46.5. Take 115 percent of 46.5 and you get 53.5. Add 46.5 and 53.5 together and you get back to 100.A skim of the linked article indicates that the second reading is correct - meaning the EU is *actually claiming* that the worst offender (Hyundai and Kia) under-reported by 53.5 percent, and VW under-reported by 36.7 percent ((1 - (100/158))*100).I find it also funny that the EU group is basically complaining that the estimated lifetimes of Toyota vehicles are too short at 100,000km. Sure, the vehicles may be handed down from original purchasers and serve for a longer time than that. But won't that hand-me-down resale also displace an even older vehicle, which probably gets worse emissions? The concept doesn't sound that unreasonable.