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Tesla’s Model 3 is going to get more expensive the longer you wait

Updated Feb 12th, 2016 6:06PM EST
Tesla Model 3 Price
Image: Green Car Reports

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Tesla earlier this week confirmed that its highly anticipated Model 3, set to be unveiled on March 31, will in fact debut with a sticker price of $35,000 before incentives. With the $7,500 federal tax subsidy taken into account, interested buyers will be able to pick up a Model 3 for $27,500. What’s more, additional tax credits in certain states will lower the purchase price by even more.

While that all sounds great, it’s worth noting that the aforementioned $7,500 tax credit won’t be available in perpetuity. Rather, the law governing EV tax incentives dictates that the $7,500 tax credit will expire once a car manufacturer sells 200,000 eligible vehicles in the United States. Following that, the tax credit drops down to $3,750 for six months and then to $1,875 for the next six month period.

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In other words, only buyers who pick up a Model 3 before Tesla sells its 200,000th vehicle in the United States will be eligible to get the cheapest deal. This of course begs the question: when will Tesla reach the 200,000 sales threshold in the U.S.?

Unfortunately, Tesla doesn’t break down sales figures on a country by country basis, but Fred Lambert over at Electrek did a little bit of math and put together some interesting projections regarding when Tesla is likely to reach that milestone.

By estimating U.S.-based sales as being about 40-50% of global sales – a reasonable assumption – Lambert finds that the 200,000 threshold will be reached sometime in 2018.

“That means that for most of 2019 Tesla buyers won’t likely have much federal incentive to buy cars,” Lambert writes. “By 2020, the Federal Subsidy will have run out.”

Put simply, if you’re interested in the Model 3 and want to get it at the cheapest price available, you’d be well advised to get your order in as soon as possible. As we detailed earlier in the week, pre-orders for the Model 3 will begin on March 31 will require an in-store reservation along with a $1,000 deposit. Starting on April 1, reservations will be available online.

Notably, the $1,000 deposit is the cheapest deposit Tesla has ever implemented and it therefore stands to reason that pre-orders for the Model 3 will incredibly high.

An official release date for the Model 3 hasn’t been announced yet, but we do know that deliveries will begin in late 2017.

Yoni Heisler Contributing Writer

Yoni Heisler has been writing about Apple and the tech industry at large with over 15 years of experience. A life long expert Mac user and Apple expert, his writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and TUAW.

When not analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions.