(Reuters) – Electric car manufacturer Tesla Inc. said bit.ly/2NCbs1r orders for cars placed by October 15th will be eligible for a full federal tax credit of $ 7,500, and these customers will get their cars delivered by the end of the year.
FIL PHOTO: Rows of the new Tesla Model 3 electric vehicles are seen in Richmond, California, USA, June 22, 201
During a major tax overtime passed by the Republican controlled US congresses late last year , incentives in the way of tax credits that lower the cost of electric vehicles are available to the first 200,000 such vehicles sold by a car manufacturer. The tax credit will then be reduced by 50 per cent every six months to the phase.
In July, Tesla said that it delivered 200,000 electric cars to US buyers, which means that tax credits will now start to fall while rivals like Mercedes-Benz, BMW AG and Audi AG will bring electric models to the market with a full tax credit in place.
Electric car buyers get full tax credits for the quarter, where the company hits 200,000 delivery marks and the next, according to the Internal Revenue Service regulation bit.ly/2NxwsXn.
This means that Tesla has until the turn of the year to hand over all tax credits, which may invite further urgent orders and meet the company's already strained production and delivery chain.
Tesla has scrambled to deliver Model 3 – a mass market salon that hopes is the key to success – and many customers have been waiting since early 2016.
Vehicles have piled up a lot around California waiting for transportation, and Musk said last month that Tesla had moved from "manufacturing hell to delivery log hell."
Friday's news confirms that many customers still have to wait three months or more. Musk said earlier this month that an increase in production in the third quarter had driven it to power with profitability.
The declining tax credit will probably give Tesla a disadvantage as rivals like Mercedes-Benz, BMW AG and Audi AG bring electric models to the market with full tax credit in place.
It also adds to what has been a bad month for Tesla, who has seen increased investor challenges for stronger supervision of Musk whose last irregular public conduct raised concerns about his ability to control the money-losing company through a rocky growth phase .
The company recently collided with the US Securities and Exchange Commission, a lawsuit that had threatened to force him out.
Electrek, as previously reported about the deadline for new orders, described the company's latest move as an attempt to increase sales. bit.ly/2ONOeuf
However, incentives may go if a new bill, introduced by a Republican senator to end the federal tax credit for electric cars in its entirety, has passed, Electrek reported.
Reporting of Rama Venkat in Bengaluru; Editing Gopakumar Warrier