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Tesla sent out a warning email this week that the federal tax credit for buying an electric vehicle will expire for good for Tesla EVs in less than five weeks. It varies based on the size of the battery but because Tesla uses big batteries they qualify for the full amount of federal tax credit. In blow to Tesla and GM, federal electric car tax credit not extended. The federal EV tax credit is the first to run out for electric carmaker Tesla on Dec. 31.
The federal tax credit for Tesla buyers falls by 50% on Monday and will be eliminated altogether at the start of 2020. Once a manufacturer hits their 200,000-car delivered in the US, EV credit starts to phase out. By 2020 the subsidy will be zero dollars for Tesla. The legislation wasn't included in a larger spending bill Congress is set to pass before the end of the year. Tesla Motors makes electric vehicles and, in the US, people had a federal tax credit of $7,500 for Tesla. This tax credit begins to phase out once a manufacturer has sold 200,000 qualifying vehicles in the U.S. Last month, Tesla sold its 200,000th such vehicle, and since then we’ve heard from some customers asking how the phase out of the tax credit works. Today (January 1, 2020), with the beginning of a new quarter, there is no federal tax credit available for new Tesla cars sold in the U.S. (it was $1,875 for cars delivered by the end of 2019). Residential Federal Tax Credit: Business Federal Tax Credit: For Systems Installed: 26%: 26%: January 1 to December 31, 2020: 22%: 22%: January 1 to December 31, 2021: 0%: 10%: On or after January, 2022