From the IRS site: “Qualified Plug-In Electric Drive Motor Vehicle Credit (IRC 30D) Phase Out 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”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period.” Some points to consider (if I am reading the IRS program correctly): 1. The 200K count only applies to vehicles sold for use in the US. So ROW (rest of world) sales don’t count. 2. The $7,500 credit doesn’t just cut off after 200K cars are sold in the US. It’s phased out by calendar quarters. So, if you miss out on the $7,500, you’ll still probably get half of this if you have an early Model 3 reservation. Here is one scenario: 1. Tesla sells their 199,950th US vehicle on September 30, 2017, the last day of the third calendar quarter. US orders are held back/frozen, but ROW orders ship as fast as they can build them. Tesla considers a “rent-to-buy” program to place cars with US customers, but keep under the 200K “sales” figure. Continues lobbying efforts to extend the tax credit. 2. In the fourth quarter, Tesla cranks out as many vehicles (hopefully a lot of Model 3s), as they can. Obviously, there's a high priority to have high volume M3 production in place. Virtually all production goes to US buyers, all of whom get the $7,500 tax credit. 3. Having blown past 200K vehicles early in the fourth quarter, Tesla sprints to deliver as many cars as they can to US customers by March 31, 2018, so that they get the full $7,500 credit. Some finessing may take place regarding the term “sold” versus delivered in the IRS program. That is, customers would need to complete a legal purchase, even if their car is not delivered. Tesla may also offer some “compensation” to customers who miss out on the full credit if it’s Tesla’s fault. Since M3 buyers are more sensitive to the tax credit, production priority is given to M3s over Models S & X. 4. Starting April 1, 2018, the second quarter after reaching 200K sales, the tax credit phase-out period begins. ROW deliveries ramp up. US buyers now get only half of the $7,500 credit. Some M3 orders begin migrating to the Bolt, i3, and the new Leaf. Tesla responds by offering incentives or new “promotional” option bundles. 5. Starting October 1, 2018, the second phase-out period begins. US buyers get only a quarter of the $7,500 credit. 6. After December 31, 2018, the phase-out period ends. US buyers get no federal tax credit. And a crazy thought… What if a new company, say T3A Motorcars, bought the rights to the Model 3 from Tesla, then contracted with Tesla to build, sell, and support the car? Would the 200K counter restart? And when the counter got close to 200K, T3B Motorcars could be formed to do the same, etc. Of course, the IRS probably wouldn’t look too kindly on this.