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It’s rough timing for Tesla. Just as Elon Musk's automaker has started to hit its stride—churning out Model 3s, outselling Audi and Cadillac, making a profit—the federal tax credit that can knock $7,500 off the price of its electric cars is expiring.
That credit, established in 2008, starts to phase out once a manufacturer sells 200,000 fully or plug-in electric vehicles in the US. Tesla hit that milestone in July, boosted by the recent ramp-up of Model 3 production. Starting in January, Tesla buyers will only be eligible for half the credit ($3,750). From June until the end of the year, that drops to $1,875. Come 2020, it goes to zero. After years of selling the Volt and Leaf, General Motors and Nissan are rapidly approaching the threshold as well.
Slice - Largesse - Automakers - Forces - Bunch
To reclaim their slice of federal largesse, the three automakers are joining forces. Along with a bunch of companies building charging networks and working on electric commercial vehicles, they have formed the EV Drive Coalition. The organization will push Congress to reform the system and eliminate the manufacturer cap. Not doing so, they argue, would punish automakers—especially homegrown Tesla and GM—for leading the electric charge, while EV newcomers like Jaguar, Audi, and Volkswagen still get the benefit.
Congress created the $7,500 credit a decade ago as a way to jumpstart EV sales. It included the cap to put an end date on the program, based on the thinking that by the time a company had sold 200,000 of the things, it should have figured out how to close the price gap between them and gas-powered cars. Tesla, GM, and Nissan have narrowed the difference, but cars powered by internal combustion remain cheaper. The EV Drive Coalition says the federal help shouldn't go away just yet, but hasn't said much about how it thinks...
(Excerpt) Read more at: WIRED
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