Tesla takes hit in the UK as its best-selling Model 3 is excluded from EV incentive

– Mar. 18th 2021 5:58 am ET

The UK delivered a blow to Tesla today as it abruptly decided to change its EV incentive program to now exclude the Model 3, which was the best-selling electric car in the country.

In recent years, the UK became an important market for Tesla.

In 2020, it was Tesla’s biggest European market with about 25% of all deliveries in Europe with over 24,000 vehicles delivered.

The vast majority of these vehicles, over 22,000 of them, were Tesla Model 3 electric sedans.

It even resulted in the Model 3 becoming the best-selling car overall in the country in December 2020.

The vehicle was a big reason behind the UK’s surge in electric vehicle sales last year.

Part of Tesla’s success in the country was due to incentives for electric vehicles that include a £3,500 electric car grant and tax incentives.

Today, the government updated the incentive program to reduce the grant to £2,500 and change the price cap for eligibility from £50,000 to £35,000.

Starting at £40,000, this change will price the Model 3 out of the grant program.

The change reportedly came abruptly and automakers were only informed today.

A government source told The Times that the change was specifically targeting Tesla:

“We’re ending the Tesla subsidy. Taxpayers should not be subsidising people to buy £50,000 cars.”

As we reported earlier this week, it was revealed that Tesla had lobbied the UK government for greater EV incentives.

More specifically, Tesla called for the government to increase taxes on petrol and diesel in order to offer tax exemptions and grants at the purchase of electric vehicles.

The proposal came amid a proposed ban on all new internal combustion engine vehicle sales by 2030 in the country.

Tesla and CEO Elon Musk have often argued that a carbon tax would be a better solution than the electric vehicle subsidies, but most governments appear reticent in trying to implement the strategy.

In the US, Musk recently revealed that he proposed the idea to the Biden administration, but it wasn’t well-received.

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Tesla

Tesla is a transportation and energy company. It sells vehicles under its 'Tesla Motors' division and stationary battery pack for home, commercial and utility-scale projects under its 'Tesla Energy' division.

Tesla Model 3

The Tesla Model 3 is the first vehicle built on Tesla's third-generation platform. It aims to reduce the entry price for electric vehicles while not making any compromise on range and performance. The Model 3 starts at $35,000 in the US and deliveries to employees and company insiders began in mid 2017 – customer deliveries begin in late 2017.