Tesla Tax Incentives & Production Woes Pile on to Leadership Blues

Elon Musk’s Twitter habit isn’t the only problem dogging Tesla

When Tesla announced plans for its Model 3, the world got excited (albeit a little skeptical). The Model 3 is meant to be the first entry-level price-point electric vehicle that also contains auto-pilot technology, the precursor of our driverless future. But we, along with Elon Musk, may have gotten a little ahead of ourselves.

At a starting price of $49,000 MSRP with a $7,500 tax credit, the Model 3 could bring new-age technology to the upper-middle-class masses. And a recently attained perfect safety score may help drive demand even further.

But if you’ve been following the latest Elon Musk trouble windfall, you might be worried about whether the Model 3 can deliver on its promises.

Related: Is Upgrading Tesla’s Autopilot Safe?

Changes and Production Woes Dog Tesla

It has been a hectic year for Elon Musk, to say the least. After allegedly smoking pot on Joe Rogan’s podcast and being investigated by the SEC (resulting in $40 million in penalties), Elon Musk has stepped down from his chairman position at Tesla.

But rest assured, the Model 3 remains out of the drama. At least for now, the Model 3’s biggest challenge is keeping up with demand. Problems arose right from the start. The prototype was a week late and the first production run fell short by 1,240 vehicles. Musk had promised 1,500 units by the end of September and only delivered 260.

Production came to a complete standstill in February, and again in April, to address production issues. In a tweet, Musk explained, “Excessive automation at Tesla was a mistake.”

In early June, Musk vowed to catch up by producing 5,000 sedans a week. This marked a major increase from less than 3,000 produced per month, but Tesla has held its promise so far. We’ll soon see whether this automaker can keep up with this accelerated production.

We do know that getting here required hundreds of new employees, and an additional production facility in the parking lot outside of the Tesla factory. And while the company seems to be struggling to meet the 5,000 per week quota, Tesla promised to increase it by another 1,000 per week.

Related:Automakers Focus on Automatic Emergency Braking

Tesla Tax Incentives Dwindling

Although the Model 3 is considered affordable by luxury car standards, tax incentives remain important to potential car buyers. For 2018, buyers can enjoy a $7,500 tax credit on their Model 3 purchase, which would bring the price down to $41,500. For many, Tesla tax incentives makes or break their buying decision.

But unfortunately, Tesla tax incentives are shrinking. Buyers who get their cars before the end of July 2019 will receive a $3,750 tax credit. Those who get their cars delivered later in the year will only get $1,875. No Tesla tax incentives will be available for 2020.

That’s definitely bad news for Model 3 buyers in the U.S., but the worst news comes from Germany. The German government added the Model 3 to its list of vehicles eligible for an Environmental Bonus based on the base model’s pricing. Later, they found out that this model wasn’t going to be available in Europe. So, everyone who got the credit had to pay it back.

Is this the end of new-age vehicles?

Holding true to Tesla’s patterns, they may have jumped the gun and over-promised with the Model 3. We’re hoping they can pull it together and deliver on their promises by the end of this year.

We also hope to see the Model 3 continue to forge ahead despite the drama that seems to surround Tesla’s former chairman.

But even if it doesn’t, another manufacturer will step up with the next version. Progress does not wait for anyone, not even Elon Musk.

Article submitted on 11/3/2018

Trevor McDonald is a freelance writer who’s written for a variety of automotive, travel, and lifestyle publications and is currently writing for Jim Ellis Hyundai. An auto-enthusiast and self-proclaimed “gear-head”, Trevor loves working on cars and writing about the ensuing test-drive. In his free time, you can find Trevor working in the garage or lifting weights at the gym. 

Gina Larson Stoller

Gina Larson Stoller

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