Late Delivery? Tesla Says It'll 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]