Tesla counts days to tax credit end as California declines to compensate federal subsidy
After the IRS changed its electric vehicle tax credit guidelines to allow for an extension beyond the September 30 delivery deadline, Tesla is now counting the days until the last order.
Before the new IRS rules, Tesla Model Y or Model 3 buyers had to take delivery of their vehicle on or before September 30 to qualify for the $7,500 in federal subsidy. Now, however, they can just buy a Model Y or put a minimum down payment by the end of September and can take delivery any time after that to still qualify.
Tesla has now updated its website with a giant counter that marks the days left to order a Model Y or any other vehicle before the tax credit expires. The government is deprecating its federal clean vehicle rebates as it is spending $200 million per month over what it now claims are unfair subsidies.
The program is very popular with electric car buyers, though, with over 90% of those eligible for it taking advantage of the point-of-sale EV tax credit reimbursement, and more than 13,000 dealers registered on the IRS Energy Credits website.
That is why California initially pledged that the state will compensate for the federal tax credit largesse if the White House administration nixes the $7,500 rebate program for new electric vehicles, and the $4,000 subsidy for used ones.
Now that the September 30 EV tax credit expiration deadline nears, however, Governor Newsom appears to have changed his mind as he faces a state budget shortfall. California may not step in to rectify the federal government's EV tax credit "vandalism," he opined in a recent interview, but will instead use the billions from its cap-and-trade system to finance infrastructure projects like a charging network expansion, rather than dole out direct subsidies.
Given that California accounts for the largest share of electric vehicle sales in the US, automakers like Tesla will now have to start their own programs to make up for the end of federal tax credits, whether through direct Model Y price cuts, APR financing deals, or any other incentives they can afford.
Tesla, in particular, plans to juice up demand with the launch of new vehicle trims, from the cheapest Model Y version, to a powerful Performance variant, with all new launches postponed for after the federal tax credit expires.
