Tesla Tax Credits Will Drop by 50% on Jan 1

If you’d planned on buying a Tesla, you better hurry – the tax credit is about to dip dramatically.

Tesla shipped 200K electric cars to U.S. patrons, so starting January 1^st, the $7,500 tax credit will be chopped in half, before dropping again to $1,875 on July 1^st.

The tax rider applies equally to every automaker, but Tesla hit the mark quicker than its rivals because, well, they’ve outsold them. And companies like Mercedes-Benz, BMW AG, and Audi AG will hit the ground running with full $7,500 tax credits for their EVs because they’re just entering the electric arena.

While Tesla never was intended for mass market consumption, the Model 3 starts around $35,000, which is slightly below the average new car price of $36,113 (according to Kelley Blue Book), so make of that what you will.

You can read more about the tax credit changes here and here.