Tesla’s Model 3 has been excluded from the U.K.’s electric vehicle incentive.
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This story originally appeared on ValueWalk
Tesla Inc (NASDAQ:TSLA) took a hit in the U.K. when the government excluded its Model 3 from the electric vehicle incentive. The car was the best-selling EV in the country, so it’s a major blow for the U.S. automaker.
The U.K. excludes Tesla’s Model 3 from incentive
According to Electrek, the U.K. was Tesla’s largest market in Europe last year, with approximately one-quarter of all European deliveries and more than 24,000 vehicles delivered there. More than 22,000 of the Teslas delivered in the U.K. last year were Model 3s, making the car the U.K.’s best-selling vehicle overall in December. The Model 3’s popularity is one of the reasons the U.K. saw such a tremendous surge in EV sales in 2020.
One of the reasons Tesla sold so many Model 3s in the U.K. last year was due to incentives on EV purchases, including a £3,000 grant and tax incentives. Today the British government changed the incentive program, reducing the grant to £2,500 and reducing the cap for price eligibility from £50,000 to £35,000.
The Model 3 starts at £40,500, which means it will no longer be eligible for the U.K.’s incentive program for electric vehicles. The change occurred suddenly, and automakers only learned about the change today.
A source with the U.K. government told The Times that lawmakers made the change specifically to target Tesla. The person referred to the incentive as “the Tesla subsidy,” adding that “taxpayers should not be subsidizing people to buy £50,000 cars.”
Electrek reported earlier this week that the automaker actually lobbied the government for more incentives on electric vehicles, including higher taxes on gasoline-powered cars and diesel-powered trucks. Tesla also wanted the government to provide tax exemptions and continue the grants on EV purchases. U.K. lawmakers are also considering banning all new vehicles with internal combustion engines by 2030.
Tesla is part of the Entrepreneur Index, which tracks 60 of the biggest publicly traded companies managed by their founders or their founders’ families. CEO Elon Musk took the helm at the automaker in 2008, also serving as product architect at the time. He led Tesla’s Series A funding round in 2004 and joined its board of directors as its chairman.
Musk is battling Amazon CEO Jeff Bezos for the title of the wealthiest person in the world. He briefly surpassed Bezos to take the title, but declines in Tesla’s stock price have taken a bite out of his net worth. Tesla shares declined another 3% in morning trading today. The automaker’s shares remain well below their 52-week high of about $900.