Sometime about a year from now, whether or not Tesla can ramp its annual production level up to the 500,000 mark CEO Elon Musk is hoping for, Tesla will face a new challenge: Its cars will effectively become a little more expensive to buyers?even if the official prices don?t change.
That?s because, with electric vehicles, sales success comes at a price?the phase-out of the federal EV tax credit that effectively gives buyers with the tax liability up to $7500 off the price of the vehicle. That phase-out is triggered when any automaker reaches 200,000 cumulative sales (starting in 2010) of qualifying plug-in hybrids or fully electric vehicles.
Alan Baum of Baum & Associates, which forecasts and tracks sales of hybrids, plug-in hybrids, and electric and fuel-cell vehicles, projects that with the mass-production ramp-up of the Model 3, Tesla will reach the 200,000 mark in the first quarter of 2018. Tesla entered 2017 at 111,953 cumulative U.S. deliveries (including a small number of Roadsters, pre-2010). For the year to date, Baum estimates another 37,130, which brings today?s total near 150,000. Musk has suggested a 20,000-per-month production rate for Tesla by the end of the year, but even at a more modest rate it would hit that ceiling in the first quarter of 2018.
Reaching the sales mark triggers a phase-out period in which, two calendar quarters later, buyers can still claim 50 percent of the credit for two quarters, and then 25 percent for vehicles delivered for two...