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Tesla Costs Likely to Rise as Incentives End

Few, if any Model 3 buyers will qualify for $7,500 tax credit.

by on Apr.06, 2016

Tesla buyers may no longer qualify for federal tax credits by the time the Model 3 reaches showrooms.

When the Tesla Model 3 finally goes into production, in late 2017 or early 2018, buyers might be in for an unpleasantly costly surprise – one that fall particularly hard on customers who were hoping to get that new battery sedan at a relatively affordable price.

American motorists buying the carmaker’s two current products, the Models S and X, stand to receive federal tax credits of $7,500. Industry analysts say that incentive has helped draw many buyers into the battery-car market. But under federal guidelines, those givebacks might be gone before the first Tesla Model 3 hits the road.

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When Congress passed the measure aimed at spurring demand for battery-based vehicles – including both plug-in hybrids and pure battery-electric vehicles, or PHEVs and BEVs – lawmakers set a cap on those incentives, limiting them to just the first 200,000 vehicles sold by a particular automaker.


Taxpayers Provided $135 mil Subsidy for Battery-Car Buyers in 2011

Treasury offers even more to manufacturers.

by on May.02, 2012

Battery cars like the Mitsubishi i ran up $135 million in federal subsidies to buyers last year.

The U.S. battery car market got off to a slow start last year.  From the standpoint of a deficit-ridden Treasury, that’s probably the good news.

A quick run of the calculator suggests that the federal government provided about $135 million in subsidies during 2011 for purchasers of vehicles like the Nissan Leaf and Chevrolet Volt.  And with sales likely to more than double this year, the hand-outs – in the form of federal tax credits – will also rise sharply.

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In all, American motorists purchased about 18,000 battery-electric vehicles, plug-in hybrids and extended-range electric vehicles, or E-REVs, in 2011, and according to, that works out to approximately $135 million when you consider that most of those vehicles qualified for the maximum $7,500 in tax credits.  That figure does not include additional credits and rebates offered by more than a dozen states and some municipalities.


California Unplugs $5,000 Battery Car Rebate Program

Buyers still get access to car pool lanes, however.

by on Jul.21, 2011

California has run out of cash for its electric vehicle incentive program.

Cash-starved California has pulled the plug on a program that provided a significant financial incentive for buyers of approved electric cars, such as the Nissan Leaf.

California was one of more than a dozen states that have enacted some form of cash incentives meant to spur the sale of high-mileage advanced-propulsion vehicles.  But the program was limited by the Golden State’s financial problems.  Nonetheless, buyers will still get at least one other much sought-after perk: stickers providing access to the HOV, or High Occupancy Vehicle, lanes, which can mean a significantly faster commute for those traveling alone.

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The federal government’s $7,500 tax credit for battery car buyers will remain in effect and, in fact, covers a broader range of products, including the Chevrolet Volt. The General Motors plug-in hybrid did not qualify in California because it did not meet the narrow definition of a so-called partial-zero-emission vehicle, or P-ZEV.