Tesla to pay tax credit amount to customers if it fails to deliver the ordered cars

Elon Musk tweeted on Saturday that Tesla (TSLA) will deliver all mid range Model 3 cars by December end although it will be tight. When a customer asked what will happen if someone’s pre-December order is not delivered in time, Musk replied that if Tesla had committed delivery and customer made good faith efforts to receive the car by year-end, Tesla will cover the tax credit difference.

The US customers who don’t get their orders fulfilled by end of this year will get the federal tax credit of $7,500 and in the first six months of 2019, this amount is halved to $3,750 further reducing to $1,875 in the second half of 2019. A lot of US customers will benefit from this decision and market experts expect that more people might use this opportunity to book Model 3s.

Model 3s base price is fixed at $45,000 now and this is expected to reduce to $35,000 in 2019. It’s worth noting that Tesla last week cut its Model 3 prices in China. In November, Tesla reduced the prices of Model X and Model S cars in China by 12-16%. The automaker also slashed down the Model X and Model S prices earlier this month in China as a result of Chinese government’s decision to stop additional tariffs on the vehicles produced in US.

In Q3 2018, Tesla delivered 83,500 vehicles totally, which include 55,840 Model 3; 14,470 Model S; and 13,190 Model X vehicles. Based on the demand, Tesla sales are expected to increase in 2019 in US and worldwide.