New York (CNN Business) The federal tax credit for Tesla buyers falls by 50% on Monday and will be eliminated altogether at the start of 2020.

The reduction of the tax credit makes buying a Tesla more expensive, because the credit reduces the federal tax bill for buyers. So Tesla could suffer a drop in sales or feel pressure to cut prices, either of which would be bad news for a company struggling to return to profitability.

"When Tesla loses any part of that credit, it undeniably loses a segment of its customer base," said Karl Brauer, executive publisher of Kelley Blue Book. "It's never going to help them sell more cars, it's only going to hurt."

Buyers of plug-in vehicles, both pure electrics and plug-in hybrids, are eligible for a $7,500 credit that reduces their federal taxes by that amount. But once a manufacturer has sold 200,000 of those cars to US buyers, the credit starts being phased out.

Tesla TSLA General Motors GM was the first to hit that mark, and the credit for its buyers fell to $3,750 , on January 1. On Monday, July 1, it will decline to $1,875.is the only other automaker to have sold enough cars to have its tax credit reduced . But that won't happen to GM until October. To receive the tax credit, a buyer must take delivery of a car by the deadline, not just order it.

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