Cars

Tesla Model 3: Diminishing Volume Now Looks Inevitable

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If you are planning to buy a car from Tesla, it is best you do so now. However, you may want to avoid the Model 3 because the compact EV from Tesla is about to get a whole lot more expansive.

In case you are unaware, Tesla is nearing its 200,000 cumulative sales of electric vehicles and this will lead to the death of federal tax credit. This means that the $7,500 used to offset the price of Tesla cars will be gone permanently.

The tax credit will be phased out gradually and analysts are expecting it to happen next year. With Tesla’s finances being fueled by speculated valuation, the death of tax credit will definitely put the investors on hold due to financial uncertainty.

It doesn’t help knowing that sales of Tesla’s cars have hit rock bottom in countries that have ended their tax credit program. If the same is to happen here in the US, Tesla will experience a sharp dip in volume.

1 Comment

  1. kent beuchert

    September 10, 2017 at 8:05 am

    The tax credit reduction goes as follows : after 200,000 units sold. the next two quarters the $7500 credit reduces by half (to $3750), and after the next two quarters by half of that ($1875) and two quarters after that to $937, and then nothing after that.
    For some reason (ignorance?) those who have covered the Model 3 story have failed to comprehend just how much the Model 3 will be at a price disadvantage
    after the first 50,000 or so vehicles are sold. And by then they will be facing LOTS of competition, including a BMW Series 3 electric, at least three from GM, etc etc.