The phaseout of the federal tax credits begins two quarters after the quarter during which a manufacturer crosses the 200,000 threshold. That means buyers can still get the full credit for up to six more months, depending on the timing.
If Tesla, for example, reaches the limit anytime from July 1 through Sept. 30, the full credit would remain available to buyers who take delivery of its vehicles by the end of the year. The credit would then be cut in half, to $3,750, for the following two quarters (January through June) and then halved again, to $1,875, for two more quarters (July through December) before going away for all Tesla buyers starting Jan. 1, 2020.
Tesla has said it expects to hit the 200,000 mark sometime this year, and reports on some Tesla online message boards suggest that the company has slowed U.S. deliveries to ensure it doesn't trigger the phaseout before July 1.
During Tesla's annual shareholders meeting this month, Musk said the company wouldn't start building the least-expensive version of the Model 3 until the first quarter of 2019.
That means consumers who have been waiting for the $35,000 base trim that Musk announced two years ago would finally get their car just as the credit drops by $3,750.
The credit applies to businesses as well as individuals, suggesting that Waymo, Google's self-driving technology affiliate, could reap credits totaling $465 million for a May agreement to buy up to 62,000 Chrysler Pacifica plug-in minivans. If so, that also would reduce the number of individual FCA US customers eligible to receive a credit by nearly one-third.
Plug-in advocates are quietly pressing lawmakers to raise the limits, although no legislation is imminent, said Genevieve Cullen, president of the Electric Drive Transportation Association.
In March, 36 utilities wrote House and Senate leaders seeking elimination of the 200,000-unit cap. Utilities are increasingly gearing up to provide charging infrastructure for EVs and say incentives still are necessary to help achieve economies of scale and provide certainty to automakers and consumers.
"We've continually reinforced the need to extend," GM CEO Mary Barra said earlier this month.
"As we believe in an all-EV future, we think there's still work to do to make sure customers understand the benefit as we continue to develop the marketplace."