2013 Tesla Model S front three 1  5b4bd55777973

December 17, 2018

Electric Vehicle Credit to be Phased Out as Tesla Hits 200,000 Sales Threshold

Qualifying vehicles by the manufacturer are eligible for a $7,500 credit if acquired before Jan. 1, 2019. Beginning Jan. 1, 2019, the credit will be $3,750 for Tesla’s eligible vehicles. On July 1, 2019, the credit will be reduced to $1,875 for the ...

The IRS has announced that Tesla, Inc. has sold more than 200,000 vehicles eligible for the plug-in electric drive motor vehicle credit during the third quarter of 2018.This triggers a phase out of the tax credit available for purchasers of new Tesla plug-in electric vehicles beginning Jan. 1, 2019.

Qualifying vehicles by the manufacturer are eligible for a $7,500 credit if acquired before Jan. 1, 2019. Beginning Jan. 1, 2019, the credit will be $3,750 for Tesla’s eligible vehicles. On July 1, 2019, the credit will be reduced to $1,875 for the remainder of the year. After Dec. 31, 2019, no credit will be available.

The plug-in electric drive motor vehicle credit was enacted in the Energy Improvement and Extension Act of 2008 and subsequently modified in later law. It provides a credit for eligible passenger vehicles and light trucks. By law, five quarters after reaching the sales threshold, the credit ends for the manufacturer. Tesla Inc.’s vehicles are eligible for some portion of a credit until Jan. 1, 2020.

Notice 2018-96 details the phase-out. More information on plug-in electric drive motor vehicle credit can be found on IRS.gov. The amounts of the credit for a specific vehicle can also be found at IRS.gov. 

Thanks for reading CPA Practice Advisor!

Subscribe for free to get personalized daily content, newsletters, continuing education, podcasts, whitepapers and more…

Subscribe for free to get personalized daily content, newsletters, continuing education, podcasts, whitepapers and more...

Leave a Reply

Workers in Different Industries Have Differing Priorities

Payroll February 10, 2025 

Workers in Different Industries Have Differing Priorities

Respondents in a new Grant Thornton survey shared their thoughts on the latest trends in employee attitudes, desires and concerns across various sectors, including technology, banking, healthcare, retail, manufacturing, and transportation/distribution.