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Tesla delivers its 200,000th car, triggering the EV tax credit phase-out period
Tesla has delivered its 200,000th vehicle this month, triggering the phase-out period of the $7,500 federal tax credit for electric vehicles offered in the United States.
As seen on Tesla’s official Electric Vehicle Incentives page, the phase-out period for the $7,500 federal tax credit is in effect for all Model S, Model X and Model 3 vehicles delivered on or before December 31, 2018, while buyers taking delivery in 2019 will only be eligible for a subset of that original $7,500 credit. Customers taking delivery between January 1 to June 30, 2019 will be eligible for a $3,750 federal tax credit, or half of the full amount before phase-out. Those taking delivery in the second half of 2019, between July 1 to December 31, 2019 will be eligible for a $1,875 federal tax credit.
The federal credit applied to new electric vehicles, dubbed by the IRS as the Plug-In Electric Drive Vehicle Credit (IRC 30D), affects all EVs that were acquired after December 31, 2009. The credit, which took effect during the previous administration as a means to encourage drivers to adopt zero-emissions vehicles, featured a tiered credit, starting at $2,500 and going all the way up to $7,500 depending on the battery capacity of an electric car. The IRS’ official website describes how the sale of a manufacturer’s 200,000th electric car triggers the tax credit phase-out period.
“The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (‘phase-out period’).”
Tesla actually played its cards cleverly with regards to the $7,500 tax credit phase-out. Being a car company that exclusively manufactures electric cars, it was inevitable that the company would be the first automaker to hit the 200,000 mark. By reaching this milestone shortly after the second quarter, Tesla actually gave itself, as well as its customers, an additional 18 months to obtain any sort of credit. the $7,500 credit remains in effect for the whole quarter in which the 200,000th vehicle was delivered, as well as the quarter after.
After this point, the credit gets reduced by 50% to $3,750 for two quarters. In Tesla’s case, this corresponds to Q1 and Q2 2019. From Q3 and Q4 2019, Tesla’s vehicles will still be eligible for a tax credit, though it would be reduced to $1,875 by this time. Tesla’s electric cars produced from January 2020 moving forward will not be eligible for tax credits anymore.
In a way, Tesla’s timing for hitting the 200,000 mark appears to be strategic. The company, after all, just recently managed to attain its goal of producing 5,000 Model 3 per week by the end of Q2 2018. Signs from the company, such as test drives for the Model 3, massive batches of new VINs filed one after another, and a new 5-minute Sign & Drive delivery system, all seem designed to deliver as many of the electric cars to customers as fast as possible.
If there is a group of reservation holders that would feel the effect of the credit phase-out, however, it would be those holding out for the Standard Range RWD Model 3, which starts at $35,000. In a Twitter update, Elon Musk stated that Tesla would likely start the production of the base Model 3’s smaller battery pack by the end of 2018. From there, Musk noted that volume production for the vehicle would probably begin in Q1 2019.
In a meeting with investors and analysts this past Tuesday, Tesla’s Senior Director of Investor Relations Aaron Chew reportedly stated that the company is aiming to sustain its 5,000 per week pace for Q3 2018, increasing output to 7,000 cars per week for Q4 2018. By mid-2019, Tesla expects to produce 10,000 Model 3 per week, which corresponds to an output of 500,000 vehicles per year.
If Tesla manages to sustain its 5,000 Model 3 per week rate from August to September 2018, and achieve a steady rate of 7,000 vehicles per week from October 2018 to June 2019 (assuming no production ramps happen within these months), the company would be able to produce 292,000 Model 3. With a 10,000 per week rate from July to December 2019, Tesla would be able to deliver an additional 240,000 more. Thus, if Tesla plays its cards right and ramps the Model 3 in a manner that is careful and precise, it could deliver as many as 532,000 cars that are still eligible for federal credit (albeit the $3,750 and $1,875 credit). Considering that the backlog of 420,000 remaining Model 3 orders are from customers across the globe, there is a good chance that all present reservation holders in the United States would be able to get a credit for their vehicle.
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Tesla FSD (Supervised) could be approved in the Netherlands next month: Musk
Musk shared the update during a recent interview at Giga Berlin.
Tesla CEO Elon Musk shared that Full Self-Driving (FSD) could receive regulatory approval in the Netherlands as soon as March 20, potentially marking a major step forward for Tesla’s advanced driver-assistance rollout in Europe.
Musk shared the update during a recent interview at Giga Berlin, noting that the date was provided by local authorities.
“Tesla has the most advanced real-world AI, and hopefully, it will be approved soon in Europe. We’re told by the authorities that March 20th, it’ll be approved in the Netherlands,’ what I was told,” Musk stated.
“Hopefully, that date remains the same. But I think people in Europe are going to be pretty blown away by how good the Tesla car AI is in being able to drive.”
Tesla’s FSD system relies on vision-based neural networks trained on real-world driving data, allowing vehicles to navigate using cameras and AI rather than traditional sensor-heavy solutions.
The performance of FSD Supervised has so far been impressive. As per Tesla’s safety report, Full Self-Driving Supervised has already traveled 8.3 billion miles. So far, vehicles operating with FSD Supervised engaged recorded one major collision every 5,300,676 miles.
In comparison, Teslas driven manually with Active Safety systems recorded one major collision every 2,175,763 miles, while Teslas driven manually without Active Safety recorded one major collision every 855,132 miles. The U.S. average during the same period was one major collision every 660,164 miles.
If approval is granted on March 20, the Netherlands could become the first European market to greenlight Tesla’s latest supervised FSD (Supervised) software under updated regulatory frameworks. Tesla has been working to secure expanded FSD access across Europe, where regulatory standards differ significantly from those in the United States. Approval in the Netherlands would likely serve as a foundation for broader EU adoption, though additional country-level clearances may still be required.
Elon Musk
Elon Musk estimates Tesla Semi could reach Europe next year
“We’ve got the Tesla Semi coming out, the heavy truck, and that’ll be going to Europe hopefully next year,” Musk said.
Tesla is preparing to expand its all-electric Semi truck program to Europe, with CEO Elon Musk indicating that the Class 8 vehicle could arrive in the region 2027.
Musk shared his update during an interview about Giga Berlin with plant manager André Thierig, which was posted on X by the official Tesla Manufacturing account.
“We’ve got the Tesla Semi coming out, the heavy truck, and that’ll be going to Europe hopefully next year,” he said.
Tesla has already begun limited production and customer deployments of the Tesla Semi in the United States, with the company working to scale output through the Semi factory near Giga Nevada. Considering Musk’s comments, it appears that a European rollout would be the next phase of the vehicle’s expansion beyond North America.
Musk’s use of the word “hopefully” leaves room for flexibility, but the remark signals that Europe is next in Tesla’s commercial expansion plans.
Musk has consistently argued that electrification should extend beyond passenger vehicles. During the same interview, he reiterated his view that “all ground transport should be electric,” adding that ships, and eventually aircraft, would follow.
The Semi plays a central role in that strategy. Heavy-duty freight remains one of the most emissions-intensive segments of road transport, and European regulators have increasingly pushed for lower-emission commercial fleets.
Tesla recently refreshed the Semi lineup on its official website, listing two variants: Standard and Long Range. The Standard trim offers up to 325 miles of range with an energy consumption rating of 1.7 kWh per mile, while the Long Range version provides up to 500 miles, which should be more than ample for European routes.
Elon Musk
Tesla Cybercab coming next to Giga Berlin, Optimus possibly after
“From a next major product standpoint, I think most likely is the Tesla Cybercab,” Musk said.
Tesla could add the Cybercab and Optimus humanoid robot to the production lineup at Giga Berlin, as per recent comments from CEO Elon Musk.
During a recent interview with Giga Berlin plant manager André Thierig, Musk identified the Cybercab as the most likely next major product for the German factory, with Optimus potentially following after.
“From a next major product standpoint, I think most likely is the Tesla Cybercab,” Musk said. He added that there are also “possibilities of Tesla Optimus” being produced in the facility.
Tesla has already begun production of the Cybercab in Giga Texas, with volume production expected to ramp this year. Based on Musk’s comments, it appears that if conditions align in Europe, Giga Berlin could eventually join that effort.
The CEO’s comments about Optimus coming to Gigafactory Berlin are quite unsurprising too considering that Musk has mentioned in the past that the humanoid robot will likely be Tesla’s highest volume product in the long run.
Giga Berlin will likely be able to produce mass volumes of Optimus, as the Model S and Model X lines being converted to an Optimus line in the Fremont Factory are already expected to produce 1 million units of the humanoid robot annually.
Apart from his comments about the Cybercab and Optimus, Elon Musk also confirmed that Giga Berlin has started ramping battery cell production and will continue expanding Model Y output, particularly as supervised Full Self-Driving (FSD) gains regulatory approvals in Europe.
Taken together, the remarks suggest Berlin’s role could evolve beyond vehicle assembly into a broader multi-product manufacturing hub, not just a regional Model Y plant.
Tesla FSD (Supervised) could be approved in the Netherlands next month: Musk
Elon Musk estimates Tesla Semi could reach Europe next year
