By on December 26, 2018

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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17 Comments on “Late Delivery? Tesla Says It’ll Cover Your Tax Credit Shortfall...”

  • avatar

    Just saw a new video on Youtube from an EV enthusiast who just took delivery of his new model 3, where he highlighted the very large number of fit and finish problems. Interesting things are that Tesla said they would take care of all the problems, which will no doubt be very expensive since it will involve some extensive respray and body panel realignments, and that the car was put on a truck for delivery to the buyer the day after he ordered it in November. Paying for the drop in Government EV handouts and a lot of warranty repair work is certainly not going to do much for the “profitability” of Tesla – will they actually be able to string 2 consecutive quarters of black ink together?

    • 0 avatar
      Art Vandelay

      I imagine the tax thing isn’t a huge number. The fit and finish stuff is a bit more troubling. I was under the impression that stuff was getting worked out but it does seem to be a recurring complaint and to be brutally honest, fit and finish on the one’s I’ve been in was closer to that of my 94 Saturn than anything I’ve had lately.

      Still, it isn’t the be all end all…(I loved that Saturn and it gave me over 300k trouble free miles). Then again, it was like 8 grand new. Good they are fixing it though.

    • 0 avatar
      SCE to AUX

      I saw the same video. The guy has legitimate complaints.

      The Model 3 I saw in the showroom at the Tesla store in September had grossly misaligned rear door trim where it met the rear window. They’re not out of the woods yet. But as I’ve said before, I believe most fit issues are related to design, not workmanship. But finish issues are often workmanship errors, and Tesla has a ways to go on both.

      Makes me even happier with my Ioniq EV. No quality issues, no mfr drama… And it has normal controls.

    • 0 avatar

      I saw the video. $35,000 for the car, $2,500 for the color red, quality control? Priceless.

      The variance in panel gaps the guy highlighted really stood out. Maybe because they build it in a tent (just kidding) the fit-and-finish on this car is so… variable.

      • 0 avatar

        Nobody has bought a $35,000 Model 3. Those don’t exist. Musk even admitted they can’t afford currently to sell a config at that price. The whole 35k deal was a ploy to grab deposits from people who expected to buy a Tesla for 25 grand after state and fed tax credits.

  • avatar

    Is Elon Musk still the CEO of Tesla? Odd.

    • 0 avatar
      SCE to AUX

      Yes, but he won’t be the Chairman of the Board any longer.

      • 0 avatar

        I researched it right after I posted this. Basically he wasn’t held accountable for damaging Tesla financially with his Twitter account and manipulating Tesla’s stock. That’s good! I would hate to think that we were restricting tech titans with old fashioned laws meant to protect us from robber-barons. The next thing you know we’d be trying to teach people about monopolies and trust-busting. Our global corporate masters have no use for such things.

  • avatar
    Master Baiter

    I don’t see the logic behind limiting the number of tax credit vehicles by manufacturer, as it only provides an incentive for other makers to hang back and let Tesla suffer the consequences of the phase out. If the credits were limited by total industry shipments it would provide an incentive for manufacturers to get out ahead of the market, which is the whole point.

    Of course it’s too much to expect logic and reason where government programs are concerned. Trump should put down his Twitter phone and change the law.

    • 0 avatar

      Your plan wouldn’t have the votes to pass as it would benefit Tesla too much. Does Fiatsler even have an EV? Toyota’s still wasting time and money on hydrogen.

      • 0 avatar
        Art Vandelay

        You know, Toyota has pretty stout engineering and business chops. They aren’t really known for “wasting” money. With respect to propulsion a workable battery with quick recharge is next on the docket (beyond ICE). Following that, perhaps the technology will be there with respect to the fuel cell. Following your logic I’d skip it all and wait for fusion.

        With respect to BEV’s though, the tech is in the battery. There really isn’t anything revolutionary in the cars and motors. Those improvements tend to be incremental. Furthermore there is nothing to suggest that Toyota wouldn’t be able to build a BEV tomorrow that wouldn’t be class competitive if not leading. They have been building electrified vehicles for nearly 2 decades now, albeit with an ICE as well. They are very conservative and always have been, but I would not bet against them. I believe Toyota has spread some cash around the battery industry as well. Anyway, I wouldn’t bet against Toyota…and I am typically not a Toyota fanboy by any stretch.

  • avatar

    Tesla is turning out body and paint quality similar to early 80s Detroit.
    I’ve seen a number of folks who have measured the paint thickness at about half or less of “normal” numbers. (Of course it’s well known their paint booth is the biggest constraint in the factory throughput – so likely they accelerate the process by shorting the paint). Some of these 60 grand Model 3s may look look pretty sad after 3 years in the California sun or the Northeast salt.

    • 0 avatar

      The body quality I’ve seen on model 3’s (and I see them every day) is definitely better than 80’s Detroit. The paint I can’t really tell. But one thing for sure, there was a brand spanking new midsize Mercedes parked next to me yesterday morning (can’t remember the model) and the thing sounded like what you’d expect from a Mitsubishi Mirage. Panel gaps etc. I can live with. Paint might be an issue for me. But, I could never stand the ICE power plants they are stuffing in alleged premium vehicles these days – other than maybe a V8 to 12. Even then, I’m getting spoiled by the instantaneous power. I have to drive the thing, not look at it. So that’s where I keep my priorities.

      That being said, I’m hoping to get a Porsche Taycan. Doing a bit of googling about Porsche build quality, I can find plenty of threads out there complaining about how they’ve gone downhill too. Not sure if that’s really true, but that’s what some people are claiming.

  • avatar

    No new prediction of when Tesla will go bankrupt?

  • avatar
    qwerty shrdlu

    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.

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