Elon Musk says Tesla will refund customers who don't receive their cars by the time a lucrative tax break is slashed next month

  • The deadline to guarantee Tesla delivery by the time an electric-vehicle tax credit gets cut in half was in October.
  • But there may be waitlist spots to get a guarantee before the January deadline, CEO Elon Musk tweeted on Tuesday.
  • After January 1, the government tax credit will shrink from $US7,500 to $US3,750.

A lucrative tax credit available to Tesla buyers will drop by $US3,750 on January 1, but there may be some hope for customers who missed the October 15 deadline.

CEO Elon Musk tweetedTuesday that buyers can join a cancellation waitlist to take delivery of their vehicle ahead of the credit’s reduction on January 1. If the car isn’t delivered by then, they can request a full refund.

The US government gives a tax credit ranging from $US2,500 to $US7,500 to people who buy electric vehicles, depending on the vehicle’s size and battery capacity. As Tesla wrote in an annual report filed with the US Securities and Exchange Commission in February, its customers get the full $US7,500.

But two calendar quarters after a company sells 200,000 electric vehicles in the US, the tax credit begins to phase out. Tesla confirmed to Business Insider in July that it had passed the 200,000-vehicle threshold. It is the first company to have its credits phased out.


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Tesla customers who take delivery between January 1 and June 30, 2019, will receive a $US3,750 tax credit and those who take delivery between July 1 and December 31, 2019, will receive $US1,875. Customers who take delivery beginning in 2020 will not receive a federal tax credit.

That means those who are waiting for the $US35,000 base-price version of Tesla’s Model 3 sedan will not be eligible for the full tax credit, because configurations of the Model 3 with a standard battery will start becoming available in three to six months, according to Tesla’s website. The least expensive Model 3 available starts at $US49,000.

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