Articles re Tesla—Fact or Fiction?

[bhzmark]

It was a *gamble*, though -- everyone who reserved knew the tax credits might start to phase out before they got their car (seriously, there were lots of discussion of this on all the car websites).

The only people who would do this are people who would buy the car *regardless* of whether they got the tax credit. I mean, the only way you can get the credit is if you accept and drive the car! And you have a chance of handing Tesla $1000 for two years just to get NOTHING. Very few would do that.

The idiot who shall not be named described it as an "option" on the $7500 tax credit. I do some options trading -- that's an expensive option.

The $1000 deposit is refundable whenever you want.

The main way to maximize the chance that you can use the credit is to put down the refundable deposit.

The only cost of the refundable deposit is the time value which is nothing. And some credit risk which only short sellers think is anything material.

Other threads project with detail how the credit will be phased out and they predict with clear reasoning logic and evidence that significant numbers of model 3 buyers will benefit from the credit.

At least those who were smart enough to put down the refundable deposit early enough will benefit from the credit.

 

[neroden]

Sure, my point is, these people would have reserved the car with or without the credit. If you're going to do that, it makes sense to reserve early to increase your odds of getting the credit. If you're not going to, uh.... why are you putting a deposit down on a car which you don't really want to buy? That makes no sense.

 

[ggr]

The Street headline:
"Tesla's Model S Recall and 12 More of the Worst Auto Blunders of All Time"
Sheesh. I didn't bother reading the article itself.

 

[jcdenton40]

The Street headline:
"Tesla's Model S Recall and 12 More of the Worst Auto Blunders of All Time"
Sheesh. I didn't bother reading the article itself.

The body of the article actually affirms the premise of the title, i.e. that this proactive recall (involving a third party part which has had a total reported failure rate of ZERO thus far) is one of the "worst auto blunders of all time":

"Is it as bad a [sic] the exploding pinto [sic], no, but where does the incident rank among the worst automotive industry blunders and recalls in history? TheStreet takes a look:"

BTW this isn't the first time TheStreet.com (one of of the more prominent investing-related news sites out there) has done something like this.

From two months ago:

Musk Pens Email to Employees, Stresses Importance of Work Environment

Tesla CEO Elon Musk said employees need to 'look forward' to coming to work each day.

Then the actual quote:

"It is incredibly important to me that you look forward to coming to work every day. For that, we must be a fair and just company - the only kind worth creating," Musk wrote.

So not only was the headline misleading (making it sound as if Musk issued some kind of decree ordering his employees that they "need to start looking forward to coming to work") but it was simply wrong grammatically. A more accurate headline would have been along the lines of:

"Musk said Tesla wants their employees to look forward to coming to work each day"

 

[wdolson]

The Street headline:
"Tesla's Model S Recall and 12 More of the Worst Auto Blunders of All Time"
Sheesh. I didn't bother reading the article itself.

WTF

 

[roblab]

It was a *gamble*, though -- everyone who reserved knew the tax credits might start to phase out before they got their car (seriously, there were lots of discussion of this on all the car websites).

The only people who would do this are people who would buy the car *regardless* of whether they got the tax credit. I mean, the only way you can get the credit is if you accept and drive the car! And you have a chance of handing Tesla $1000 for two years just to get NOTHING. Very few would do that.

The idiot who shall not be named described it as an "option" on the $7500 tax credit. I do some options trading -- that's an expensive option.

I remember gambling that I might get a Model S. My wife and I drained our savings of $40,000, 4 years before they built mine, about number eight to the public. We knew nothing of any rebates or incentives at the time. But being an idiot at times seems to pay off.

 

[dmckinstry]

I remember gambling that I might get a Model S. My wife and I drained our savings of $40,000, 4 years before they built mine, about number eight to the public. We knew nothing of any rebates or incentives at the time. But being an idiot at times seems to pay off.

Amen Rob.

 

[SteveG3]

The Street headline:
"Tesla's Model S Recall and 12 More of the Worst Auto Blunders of All Time"
Sheesh. I didn't bother reading the article itself.

street.com does this kind of gibberish several times a week with Tesla. they have two other regular components to their efforts to talk the stock down, 1) they do not have a comment section available, so the nonsense cannot be refuted directly, 2) they release the same article multiple times to try to get more mileage from their fake news (websites like Yahoo Finance repeat the re-release as if it is new).

 

[GoTslaGo]

WTF

Couldn't agree more!

 

[bhzmark]

Sure, my point is, these people would have reserved the car with or without the credit. If you're going to do that, it makes sense to reserve early to increase your odds of getting the credit. If you're not going to, uh.... why are you putting a deposit down on a car which you don't really want to buy? That makes no sense.

Oh. you are arguing against people putting a deposit down on something they don't want buy.

I think your chances of winning that argument are pretty good. If you can find someone who holds that position. Good luck.

 

[jcdenton40]

The Street headline:
"Tesla's Model S Recall and 12 More of the Worst Auto Blunders of All Time"
Sheesh. I didn't bother reading the article itself.

Lol. As of today they’ve changed the title. Still ridiculously sensationalistic, of course.

Did Tesla Just Join the List of the Worst Automotive Industry Mishaps of all Time?

 

[Curt Renz]

Lol. As of today they’ve changed the title. Still ridiculously sensationalistic, of course.

Did Tesla Just Join the List of the Worst Automotive Industry Mishaps of all Time?

When a headline is written as a question, the answer is almost invariably "no".

 

[ValueAnalyst]

Ratio of bear:bull articles on SeekingAlpha is now 10:1.

 

[ggr]

Oh, good, it got better!

Actually, I guess that depends on what "better" means in this context. The ratio was All:0 for a long time. But I guess if you're looking for a bear trap for shorts to squeeze, this is worse. ;-)

 

[adiggs]

I remember gambling that I might get a Model S. My wife and I drained our savings of $40,000, 4 years before they built mine, about number eight to the public. We knew nothing of any rebates or incentives at the time. But being an idiot at times seems to pay off.

I appreciate your sacrifice @roblab!

 

[Vern Padgett]

I remember gambling that I might get a Model S. My wife and I drained our savings of $40,000, 4 years before they built mine, about number eight to the public. We knew nothing of any rebates or incentives at the time. But being an idiot at times seems to pay off.

We all are in your debt. I bought 2 Model Ss a year ago, right after standing in line 3 hours to place a deposit on the Model 3. Because you, and people like you, believed in Musk's vision years ago, and put your money on the line, people like me could buy Model Ss one year ago.

And everyone can buy a Model 3 soon.

Thank you.

 

[Ugliest1]

Sure, my point is, these people would have reserved the car with or without the credit.

For example, anyone who doesn't live in the US but plunked that $1,000 down. As has been said before, the $7,500 is only a tax break for the US (and the way I think of it, is mostly kind of irrelevant anyway because you still have to pay that $7,500 value upon car purchase, and only later, *IF* you make enough to get the full deduction over 2 years, do you get *UP TO* $7,500 off your taxes -- I know most everyone knows this... just reminding it's not like paying $92,500 for a $100,000 car).

So back to my main point, those of us in Canada and elsewhere in the world put deposits down with no expectation of EV credits. Yes BC currently has a $5,000 off EV deal but the money could run out at any time and they may or may not renew it, all of which has happened in the past 4 years. It is definitely not a guaranteed thing, getting free money from the government, no matter where you live.

 

[wdolson]

The credit is only for one year's taxes and it is a credit rather than a deduction. I did my taxes a couple of weeks ago and didn't get the full credit, and I didn't take all the deductions I could have. I think quite a few US Model 3 buyers will get their federal tax bill zeroed for a year even if they only get in at the 50% credit level.

Another thing to take into account is sales tax is deductible off your federal taxes. Because of the car, that was a pretty hefty deduction all by itself.

The median US household income is around $50,000 a year. Because of deductions most families are able to take advantage of, quite a few households with incomes around $100.000 pay around $7500 in federal income taxes. According to this article the average real income tax rate most households making $100K-$200K a year actually pay is less than 10%:
How Much Americans Really Pay in Taxes

Having tax incentives is a nice bonus, but it isn't critical. My income is a lot more humble than a lot of the Model S and X buyers and I would have gotten by without the incentive. It's definitely nice, but it wasn't a critical factor. So I agree with your point @Ugliest1

 

[Electroman]

Another thing to take into account is sales tax is deductible off your federal taxes.

What? Is this true for any car or just EVs? What about CPOs?

 

[wdolson]

What? Is this true for any car or just EVs? What about CPOs?

It's true for any purchase if you're state has sales tax. Some states may tax cars differently than other things, but in Washington it's straight up sales tax with registration fees on top of that.

The IRS gives and average sales tax deduction based on typical spending habits, but you can put in your exact tax paid if you keep receipts, and/or you can list major purchases on top of the standard sales tax deduction.

I use TurboTax and they gave the option of entering in the exact tax paid or take the standard deduction, then it asked if I had made any large purchases during the year and gave me the opportunity to add in the sales tax from the car purchase. I'm not a lawyer, so I recommend doing a bit of research yourself. There is lots of information out there from tax professionals about the sales tax deduction.