Despite the company’s frenetic attempts to sell every car it produced, a 2019 tax credit cut will make things much more complicated.
As year 2019 is imminent, Tesla still has more than 3,000 Model 3 electric cars in its inventory, says a report by Electrek citing an anonymous source familiar with the matter.
Despite the car maker’s best efforts to push customers to buy out its inventory, Tesla enters the new year with several thousand vehicles still on hand, and the changing tax environment is not going to help.
In 2019, the $7,500 US federal tax credit to buyers of electric cars will be cut in half, as a first stage of phasing out the benefit. Expecting a huge surge in demand near the end of 2018 because of the scheduled tax credit cut, Tesla went out of its way to produce a record number of cars to have them ready for the purchase.
The demand for the vehicle turned out to be much smaller than anticipated, as more than 3,000 units still remain unclaimed in the US inventory. Even Tesla CEO Elon Musk’s consistent promotion of the company’s ability to deliver vehicles by the end of the year and a corporate campaign urging Tesla’s employees to buy the company’s cars, both of which unraveled in the last few weeks, didn’t help the situation.
While the source said the company will deliver an unnamed number of units on December 31, they also said it is unlikely that these sales will cover all of the leftover inventory. Tesla is keeping 44 US stores open until midnight in hopes of helping customers take advantage of the tax credit before it expires, TechCrunch reports.
When the tax credit halvening takes effect, the company will likely have even more problems selling surplus vehicles, considering that even before the cut, Tesla was unable to clear its inventory.
However, Electrek’s report downplayed the issue, pointing out that European and Asian markets are still untapped for the Model 3, so that’s where the new cars will most likely go. But customers in the US still consider Model 3 too expensive to be an interesting offer, Electrek writes. It is likely that the cars already produced in the US will stick with the company for a long time, the report opines.