Tesla said Thursday that it has now delivered 200,000 vehicles, which means tax credits for consumers buying the electric cars will begin to phase out.
A tax law passed last year by congress gradually eliminates tax credits to be used towards the purchase of an EV after the manufacturer has delivered 200,000 vehicles. Starting in January, the $7,500 tax credit will drop to $3,750, then to $1,875 in July.
Tesla is the first electric carmaker to reach the 200,000 car mark, with GM expected to hit the mark next year. Some industry watchers believe it could put the companies at a disadvantage, as other carmakers like Audi, BMW and Mercedes are entering the EV market. Consumers looking to take advantage of the significant tax incentive may opt for those models.
While hitting the milestone is positive sign for Tesla sales, it means that more than 400,000 people on a waiting list for the Model 3 could be disappointed. In particular, those waiting for the $35,000 base model expected to go into production next year will miss out on some savings.