How Buying Tesla’s Model 3 Could Save Early Adopters Big Bucks
The new EV will end up costing more in the long-run for this simple reason.
If you've ever bought a new product on Kickstarter, you know that buying in early can save you quite a chunk of change. In a way, the United States government has been doing the same thing for early adopters of electric cars with a large tax credit, however that credit isn't going to last forever. Buying a Model 3 early will be your best change to get Tesla's brand new EV in the high $20,000-range.
Earlier this week, Tesla announced that the Model 3 would be production-ready by Friday. This being several weeks ahead of schedule, those that had previously pre-ordered the vehicle should be ecstatic that their hard-earned cash will be giving them a physical product in the near future. It should also give them piece of mind that they will be able to take advantage of the federal $7,500 rebate when buying a new EV. This effectively will reduce the $35,000 EV down to $27,500 after incentives, making it cheaper than the Chevy Bolt, and most equivalent petrol-powered sedans.
So what's the catch? Surely the government can't just go around giving out $7,500 rebates to everyone. Each manufacturer is allotted at least tax credits for their first 200,000 EVs sold; providing a $1.5 billion stimulus to the EV economy with each auto maker. An expensive tax break, but alongside improving charging infrastructure, it is also a large incentive to push many on-edge car buyers to make the jump.
Tesla has already sold well over 100,000 EVs, with over 76,000 being produced in 2016 alone. Once Tesla hits their threshold, their financial incentive will come to a close shortly afterwards. Within the first three months following the threshold being met, tax incentives will be cut in half for new customers, bringing their tax credit to $3,750. This will continue for six months, until it happens once again. After $1,875 in tax credits is applied for the last six months, the program will come to an end.
Musk revealed that Model 3 production could potentially reach up to 20,000 units per month by end-of-year, making it possible that the full tax incentive may expire before Summer 2018. If that does happen, the remaining financial incentives may slowly trickle down to new buyers throughout the remainder of the year until the credit is depleted. With that being said, if one was contemplating purchasing a new Model 3, it would be wise to jump on the train sooner rather than later to save some money.