July 13, 2018 Taxation in USA

TeslaWASHINGTON D.C. – Tesla may have sold more electric cars in America than any other manufacturer, but the success comes at a price for consumers.

On July 12th the American electric vehicle manufacturer, Tesla, confirmed that it has reached the production threshold which triggers the winding down of tax breaks available to American’s buying a Tesla.

Under current US tax rules, individuals purchasing an electric vehicle are eligible to receive a federal tax break of up to USD 7 500 when purchasing a Tesla.

However, as the tax break was not intended to be a permanent measure, the rules also stipulated that it applied in full to the first 200 000 cars shipped by any given manufacturer.

Tesla is now the first manufacturer to reach the 200 00 car threshold, meaning that in six months’ time the USD 7 000 tax break would be reduced to USD 3 750, and then to an even lower USD 1 875 in the following six months, and subsequently dropped entirely.

The announcement of the phase-out and the winding down timeline may cause some controversy, as an estimated 420 000 individuals have already made deposits for Tesla cars which would now not be eligible for tax breaks due to their production schedule.