Did you put down money for a new bright red Tesla Model 3? (Or did you skimp and got the standard any-color-so-long-as-it-is-black car?)
Tesla’s Model 3 order book backlog has been growing longer. The company has confirmed having about 420,000 Model 3 reservations, which, at the current production rate, will take nearly two years to deliver. Tesla has been struggling for more than a year to ramp up manufacturing to meet the demand. The company is targeting production rate of 6,000 per week, which is a significant improvement, albeit still only about 65% of the factory’s capacity when it was co-owned by General Motors and Toyota.
To accelerate production, Tesla reduced the number of available Model 3 configurations from thousands to about 100, which means you will not be able to get the exact car of your dreams. And by the time your car is ready to be delivered to you, the federal tax incentive you were counting on may be gone.
The End of Electric Vehicle Tax Credit
The phaseout of the federal tax credits begins two quarters after the quarter in which an automaker sells more than 200,000 units. Tax incentive then is cut in half every two quarters until it is phased out completely.
In a document filed with the Securities and Exchange Commission, Tesla said it expects its 200,000th qualifying sale to “occur at some point during 2018.” This will be an important achievement for Tesla that is promising profitability in 2018 despite having missed multiple milestones. It is also an important milestone for the EV industry as a whole.
Consumers who have been waiting for their Model 3 for over two years would be getting their car just as the federal tax credit is cut in half and drops to $3,750.