This is what happens when the tax laws are overhauled.
Late last year, the US Congress passed a series of measures that overhauled the tax code, and one of the specific changes involves tax credits that help lower the cost of electric vehicles. These tax credits are only good for the first 200,000 EVs an automaker sells. The tax credit is then reduced by 50 percent every six months until it ultimately phases out. Last July, Tesla announced it sold 200,000 vehicles in the US, meaning the tax credit will now begin to be lowered.
However, Reuters reports that Tesla has announced that vehicles whose orders are placed by October 15, meaning tomorrow, will still be eligible for the full $7,500 federal tax credit. Furthermore, these customers will receive their new cars by the end of the year.
Needless to say, there could be a sudden rush of orders being placed right now by customers anxious to save some money. Question is, is Tesla even capable of fulfilling those orders, especially for the high in demand Model 3? Remember, it wasn't so long ago that Tesla CEO Elon Musk said the company was in "production hell" trying to meet Model 3 production deadlines.
Earlier this month, Musk announced Tesla had moved from "production hell to delivery logistics hell" as newly built vehicles had begun to pile up on California lots without the necessary means to transport them.
Even if Tesla manages to meet both production and delivery goals by the end of the year, it will soon be at a disadvantage against rivals like Audi, BMW, and Mercedes-Benz, all of whom are just launching new electric vehicles that will enjoy the full tax credit.
On the other hand, Musk says his company is on the verge of profitability thanks to third-quarter sales surge. This October 15 deadline could be another way to push sales before 2018 comes to a close in a few months' time. But if you want a new Tesla as well as the $7,500 tax credit, you'd better move fast. The clock is ticking.