Neither Tesla nor GM have said if they have plans to reduce the upfront prices of their cars as the credits wind down. As of next January, subsidies will be cut in half before being phased out completely a year later.
A Tesla spokeswoman confirmed the change to Green Car Reports, but declined to comment further.
Giant carmaker Tesla has announced that they are building a "Gigafactory 3" in China, a "bold" move that will allow them to produce some 500,000 vehicles per year for Chinese customers.
Tesla buyers have benefitted from a $7,500 federal tax credit, but that's going away.
In March, GM Chief Executive Mary Barra called on Congress to expand the consumer tax credit for electric vehicles as the company boosted production of the Bolt in response to strong demand.
Each manufacturer is allotted 200,000 credits before the phaseout begins.
The Tesla Model Y will be a more low-priced version of its Model X, similar to how the Model 3 is a less expensive version of the Model S.
Besides the import tariffs and the shipping costs Tesla effectively sidesteps by breaking ground in China, the EV maker also stands to save money in terms of sourcing, as many raw materials needed to build a Tesla, such as rare earth metals, are mined and processed for manufacture in China.
It is unclear if the phase-out will affect sales of the entry-level Model 3, which carries a $35,000 price tag but is not likely to begin rolling off the production line until next year.
In an interview with Bloomberg published Friday, Tesla CEO Elon Musk said "we were huge idiots and didn't know what we were doing" when attempting to redesign Tesla's production process for the Model 3.
For example, a buyer today who purchases a Model 3 for $50,000 (representing a long-range battery, rear-wheel drive auto with the required Premium Package), would get a tax credit that will bring the effective price down to $42,500.
The Model 3, billed as a more affordable auto with a starting price of $35,000, is now delivered only in more expensive versions.
Electric automaker Tesla has hit a production threshold that will phase out a key tax credit for new vehicle owners. The Model 3 was created to be Tesla's first mass-market vehicle, meant to broaden the company's customer base beyond the luxury segment and increase the rate of electric-vehicle adoption.