Tesla to pay customers for missed tax credits
First Trust Advisors Chief Economist Brian Wesbury and Barron’s Senior Editor Jack Hough on Tesla’s plans to reimburse customers for missed tax credits and the company’s decision to cut the price of its Model 3 in China.
Tesla CEO Elon Musk said the electric-car maker is prepared to cover a promised federal tax credit for any customers who ordered vehicles before December but do not receive them until after a Dec. 31 deadline.
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Under a tax incentive structure approved by Congress in December 2017, the first 200,000 customers to buy Tesla vehicles are eligible for a $7,500 rebate. Once the 200,000-car milestone was reached last July, customers had six more months to place orders that were still eligible for the full rebate, which drops down to $3,750 on Jan. 1.
Tesla originally said customers had to place orders by Oct. 15 in order to receive their cars by the end of the year and lock in the full rebate. However, with Tesla struggling to fulfill some car orders in a timely fashion, Musk said the company will make up the difference for any delayed shipments.
“If Tesla committed delivery & customer made good faith efforts to receive before year end, Tesla will cover the tax credit difference,” Musk wrote to a customer on Twitter.
Tesla invested heavily throughout 2018 to ramp up production of its flagship Model 3 sedan, setting a goal of manufacturing 5,000 vehicles per week. The company produced a record number of vehicles in its fiscal third quarter and achieved profitability for the first time in several years.
Musk said Tesla is aiming to fulfill all outstanding Model 3 orders by the end of 2018.
