(Reuters) - Electric carmaker Tesla Inc said bit.ly/2NCbs1r all orders for its vehicles placed by Oct. 15 are eligible for full federal tax credit of $7,500 and such customers will get their cars delivered by the end of the year.
FILE PHOTO: Rows of the new Tesla Model 3 electric vehicles are seen in Richmond, California, U.S., June 22, 2018. REUTERS/Stephen Lam/File Photo
Under a major tax overhaul passed by the Republican-controlled U.S. Congress late last year, financial incentives in the way of tax credits that lower the cost of electric vehicles are available for the first 200,000 such vehicles sold by an automaker. The tax credit is then reduced by 50 percent every six months until it phases out.
In July, Tesla said it delivered 200,000 electric cars to buyers in the United States, meaning tax credits will now begin to be lowered while rivals 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 cars get full tax credit for the quarter in which the company hits the 200,000 delivery mark and the next.
The declining tax credit is seen as putting Tesla at a disadvantage over newer entrants to the market, whose first 200,000 models will qualify for a full tax credit.
It also adds to what’s been a few bad months as Tesla faced delivery delays due to manufacturing bottlenecks and deferred the much-needed revenue when it continues to spend heavily on Model 3 production fixes as well as projects in the pipeline.
Electrek, which earlier reported on the deadline on new orders, described the company's latest move as an attempt to boost sales. bit.ly/2ONOeuf
However, the incentives could go if a new bill, introduced by a Republican senator to end the federal tax credit for electric cars altogether, is passed, Electrek reported.
Reporting by Rama Venkat in Bengaluru; Editing by Gopakumar Warrier
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