As the countdown to 200,000 now begins in earnest, we can almost – but not quite – state with certainty when the phase out will begin of the Federal EV tax credit for both Tesla and GM buyers.
First, let’s see where we think Tesla sits after the month of May:
My analysis using estimated sales figures from InsideEVs and Wikipedia for early Tesla Roadster sales, pegs Tesla’s US sales total at approximately 194,400 units. This would mean – if the InsideEVs numbers are close to accurate – that Tesla needs to deliver less than 6,000 units in the US during the month of June. With most of Model 3 “production hell” issues behind Tesla, there is a good chance that in June around 15,000 Model 3s could roll off the assembly line at the Fremont factory.
The month of June (end of Q2) has long been one of Tesla’s best months for US sales. In 2017, Tesla sold a combined 4,550 Model S and X models and 5,845 in 2016. In my forecast above I’ve assumed a reasonable 4,500 deliveries of Models S and X, leaving roughly only 1,100 Model 3s needed to be delivered in the US to reach the 200,000 threshold.
Neither Tesla or Elon Musk have tipped their hat definitively on whether they will prioritize non US customers during June and move deliveries of the Model 3 to Canada and perhaps even some Model S and X deliveries outside the US if demand warrants. If Tesla, however, does not manage deliveries geographically in June then they should definitely surpass the 200,000 milestone.
In the long-term, which quarter (Q2 versus Q3) Tesla hits 200,000 sales has little significance. But if you are a short-range Model 3 reservation holder, the level of the tax credit, if any, still available when you can purchase your car might be an important factor in your decision to move forward or not.
GM Is Not Far Behind Tesla
Until the Tesla Model 3 deliveries scaled up, GM was actually ahead of Tesla in total historical EV sales. GM has now dropped about 12,500 units behind Tesla. I estimate that GM will sell between 3,500-4,000 units in June, putting the company at about 15,000 or less units from 200,000.
At current rates, GM will sell about 9,000 EVs per quarter which would put them past the 200,000 threshold likely in Q4 and specifically the month of December. Could GM delay deliveries to put off reaching 200,000 the last month of the year and delaying the beginning of the tax credit phase out for another quarter?
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It is possible, but then a few thousand GM EV buyers have to delay for another year when they can apply the tax credit. Like Tesla and their delivery strategy for June, we’ll just have to wait till the end of the year on GM. That said, it is now clear that GM will reach the 200,000 unit milestone most likely in Q4, but for certain in Q1 of 2019.
In an upcoming post I will explore the implications of the phase out of the tax credit on Tesla, GM and the rest of the auto industry.
Additional Articles and Resources on the Tax Credits:
- Federal EV Tax Credit Phase Out Tracker By Automaker
- Huge Flaws in Federal EV Tax Credit Will Hurt US Automakers Beginning in 2020
- Edmunds: “Elimination of federal tax credits likely to kill U.S. EV market” (wrong)
How The Federal Electric Vehicle (EV) Tax Credit Works
- Edmunds – Electric Vehicle Tax Credits: What You Need to Know
- Federal and State Laws and Incentives
- IRS Form 8936 (Form required to file with your tax return)
- IRS: IRC 30D – Plug-In Electric Drive Motor Vehicle Credit Quarterly Sales