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Tesla hits 200,000 cars, meaning lower tax credit for buyers

Reuters 

By and Rai

(Reuters) - Inc has delivered 200,000 electric cars to buyers in the United States, a said on Thursday, meaning tax credits will now begin to be lowered, while rivals such as Mercedes-Benz, and will bring electric models to the market with a full tax credit in place.

Under a major tax overhaul passed by the Republican-controlled U.S. 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.

From Jan. 1 next year, the $7,500 tax credit will drop to $3,750 around mid-year, the website said.

will also face the same problem as in the near future, as it is expected to hit the 200,000 mark with sales of its Chevrolet Bolt EV, the Chevrolet Spark and plug-in hybrid.

The declining tax credit is seen as putting Tesla and GM at a disadvantage over newer entrants to the market, whose first 200,000 models will qualify for a full tax credit.

GM sold an estimated 184,000 full electric or plug-in hybrid vehicles through June, according to website insideevs.com, which tracks electric vehicle sales.

A for GM did not immediately respond to a request for comment.

Earlier this year, amid concerns they could miss the federal tax break, some potential buyers of Tesla's long-delayed Model 3 sedan began seeking alternatives, including GM's Bolt, according to postings by would-be Tesla buyers on websites and interviews with GM dealers.

Both GM and Tesla have been lobbying since last year, hoping to win changes to that would allow them to continue to collect the tax credit, but have been unsuccessful to date.

In March, GM called on to expand the consumer tax credit for electric vehicles as the company boosted production of the Bolt in response to strong demand.

Last week, GM said demand for the Bolt in the United States, and had "outstripped production" and that it would increase output in the fourth quarter by 20 percent.

(Additional reporting by in Washington; Editing by Bernadette Baum)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, July 12 2018. 21:11 IST
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