Tesla Inc stated orders for cars placed by October 15 will be eligible for a full federal tax credit of $7,500 and these clients will get their vehicles delivered by the end of the year.
Under a major tax overhaul passed by the Republican-controlled U.S. Congress late last year, rewards in the way of tax credits that reduce the expense of electric vehicles are available for the first 200,000 such vehicles sold by an automaker. The tax credit is then decreased by 50 percent every six months until it phases out.
In July, Tesla stated it delivered 200,000 electric cars to clients in the United States, meaning tax credits will now begin to be reduced while competitors such as Mercedes-Benz, BMW AG and Audi AG will bring electric models to the market with a full tax credit in place.
Buyers of electric vehicles get full tax credit for the quarter in which the company hits the 200,000 delivery mark and the next, as per the Internal Revenue Service regulation.
This indicates Tesla has until the end of the year to hand out full tax credits, which could welcome a further rush of orders and hit the company’s already strained manufacturing and delivery chain.
Tesla has scrambled to deliver the Model 3 – a mass-market sedan that it hopes is the key to success – and many clients have been waiting since early 2016.
Automobiles have piled up in lots around California awaiting transport, and Musk stated earlier month that Tesla had moved from “production hell to delivery logistics hell.”