Tesla Promises Model 3 Delivery by Dec. 31 to Meet Tax Deadline

Order by end of month, get by end of year, Musk tweets.

by on Nov.16, 2018

Tesla CEO Elon Musk tweeted that the company would deliver any Model 3 ordered by the end of November by Dec. 31.

Tesla CEO Elon Musk claims that Model 3s ordered in the U.S. by the end of November will be delivered by Dec. 31 — a delivery rate that is much faster than for earlier Model 3 sedans.

The edict, issued by Musk via Twitter, is designed to push sales to get them completed in time to take advantage of tax breaks for buyers. The move comes as Tesla and General Motors are lobbying government officials to extend tax incentives for EV buyers.

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“Tesla just acquired trucking capacity to ensure Model 3 can be delivered in U.S. by Dec 31 if ordered by Nov 30,” Musk tweeted on Thursday. He late clarified how they’re going to get this done.

“Skipping rail saves over a month for East Coast deliveries. All things considered, it’s better to use trucks. Single load/unload & direct to owner location.”

(Denholm replaces Musk as Tesla chairman. Click Here for the story.)

By delivering the Model 3 by Dec. 31, Musk ensures buyers get the maximum tax credit.

Getting the car by the end of the year allows buyers to get the full $7,500 tax credit from the federal government. After that – unless the lobbying efforts are successful – the incentive is cut in half. Tesla had earlier said that orders placed by Oct. 15 will be delivered by the end of the year.

Tesla customers who get their Model 3 between Jan. 1 and June 30, 2019, will receive a $3,750 tax credit, and those who take delivery between July 1 and Dec. 31, 2019, will receive $1,875. Starting in 2020, there is no more credit for Tesla buyers.

“I think it’s a good move. We need a little more detail to know what kind of capacity this brings, but having those trucks on the road will help with order momentum,” Roth Capital Partners analyst Craig Irwin told Reuters.

(Click Here for more about Tesla taking heat as Musk lashes out.)

It may be a good move, but can they deliver the vehicles is the question? Tesla history with deadlines is not good. Meeting the end of the year promise may have just gotten more complicated as the company opened Model 3 sales to the Chinese market today.

Tesla plant workers are likely going to see production levels need to rise again after Musk's Dec. 31 delivery promise as well as opening the door to China orders.

China is the largest market for electric vehicles and the government’s goal is to have 100% electric vehicles by 2030.The company inked a deal to build a new factory in China in a few years, but the current stream of Model 3s will come from the company’s sole production source: the Fremont, California plant.

Musk noted in a Twitter post that, “Probably some deliveries in March, but April is more certain,” after being asked when the deliveries in China would start. This supports an assertion Musk made during the company’s last earnings call.

(To see more about Tesla meeting its Q3 production goal, Click Here.) 

Tesla’s last quarter was a landmark event as the Musk said the company would be profitable and it was, reporting $312 million in profits in its third quarter as Model 3 production took off during the that quarter.

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