Tesla Hits Tax Incentive Threshold, Leaving Bolt with Brief Advantage

If you’re shopping for an electric vehicle and want more than 200 miles of range, you pretty much only have two options right now: the Chevy Bolt or a Tesla.

That might explain why they’re the two best-selling EVs on the market right now and the only two at risk of slipping over the 200,000 unit mark that dictates how government incentives are applied.

For now, Chevy is safe but Tesla announced yesterday that it recently sold its 200,000 unit, making its vehicles no longer eligible for the juicy government incentives that make these cars affordable for many.

Worth $7,500, these incentives factor into the buying decision of many prospective owners and has been counted upon by EV manufacturers to keep their cars competitive against traditional vehicles, price-wise.

While Tesla is sure to take a hit from the loss of its incentive, it won’t take it all at once. The incentive has been designed to fade out, rather than to stop immediately.

Buyers will be able to apply the full incentive until the end of 2018 and will get half of that after January 1, 2019. Six months after that, the incentive will be halved again before fading away completely in 2020.

Thanks to its zealous fanbase, Tesla will likely be able to survive the loss of the incentive, but it will be handing over an advantage to Chevy. But maybe not for long.

Back in February, GM said that it had sold more than 160,000 vehicles that were eligible for the $7,500 tax credit. That makes it perilously close to the 200,000 vehicle limit and, indeed, GM expects to surpass before the end of the year, according to CNN Money.

Still, as one of the earliest major brands to produce a 200-mile electric car, GM feels that its products, not a tax incentive, are what sell its cars.

“While there’s no doubt that the federal incentive has proved invaluable to attracting buyers to EVs, we’re offering compelling products and prices for our customers,” Elizabeth Winter, GM spokesperson, told CNN in February.