Cars and Drivers

Tesla's New Sales Pitch--Federal Tax Credits Are Ending

Douglas A. McIntyre

Published: November 28, 2019 7:06 am

Last Updated: March 13, 2020 6:35 pm

Tesla usually shows its car prices net of the federal tax credit its buyers receive. It makes the cars look less expensive. In reality they are, once customers collect their checks from Uncle Sam. Tesla’s latest pitch to possible buyers is that the credits go away at year-end.

The Tesla argument is convincing and direct: “In less than 5 weeks, the federal tax credit will be expiring and purchases of a new Model S, Model X or Model 3 will no longer be eligible for this incentive. Order online in less than three minutes and experience the ease, convenience and safety of an all-electric design.”

Since tax credits were phased out in two stages, the best deal was to buy a Tesla before June 30. The credit up until that point was $3,750. After that point and until the end of this year, it is $1,875.

For some reason, Tesla pressed the point that it takes three minutes to order one of its cars online. Somehow Tesla thinks that makes the deal even more attractive.

For some Tesla models, the discount is barely noticeable. The high-end version of the Model S costs $99,900. so the $1,875 is very modest. However, the price of the Model 3 can be as low as $31,315.

Tesla has not had any trouble selling its cars. As a matter of fact, its problems have been with production. The incentive is unlikely to cause a sales spike. And, if it does, Tesla’s challenge may be to deliver them .