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Tesla to begin phasing out federal tax credit in 2019

by Justin King

The incentive will drop to $3,750 for vehicles delivered in the first half of 2019, then to $1,875 for vehicles purchased in the second half.

Tesla has confirmed a phase-out schedule for federal income tax credits, which currently serve as a $7,500 incentive to purchase any of the company's electric vehicles.

The company has apparently delivered its 200,000th EV in the US, triggering an unwinding of the federal incentive program.

Customers will still be eligible for the full $7,500 credit for vehicles delivered on or before December 31, 2018. The credit is cut in half for vehicles delivered January 1 - June 30, 2019, then slashed again to $1,875 for deliveries from July 1 - December 31.

"Several states and local utilities offer additional electric vehicle incentives for customers, often taking the form of a rebate," the company points out on its incentives information page.

It is unclear if the phase-out will affect sales of the entry-level Model 3, which carries a $35,000 price tag but is not likely to begin rolling off the production line until next year.