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Discussion : All discussion regarding Model 3 and Tax credit in model 3 subforum
- Thread starter mapman
- Start date
Snow Drift
[Off-Road Assist] Activated
I listened to the call live. It didn't sound 100% that we would qualify for the full $7,500. They eventually devolved into a statement that they credit is in two parts and they manufacturer their batteries in the US. So, the materials issue may still be an issue...certainly down the line when it changes annually. Elon, in the end, thinks they will meet the annual thresholds, so that's good if it happens.
Colin Langan -- Wells Fargo Securities -- Analyst
Got it. And just as a follow-up. You mentioned in the prior questions about IRA. I mean it sounded like you thought you could get -- can you get all of it? I mean, because my interpretation is like the production credits, battery component credits for buyers seems very likely for you guys.
Is the sourcing part of it possible? Because that seems like a pretty tough hurdle given how much has to be sourced from the U.S.?
Unknown speaker
Yeah. So, we have a cross-functional team that's looking very closely. As you mentioned, the sourcing threshold increases by the year. So, we're looking at all options and also getting some clarification from Treasury.
That's -- it's important to say that's only a fraction of the other credits. We do manufacture ourselves in the U.S. We manufacture the modules in the U.S. So, that's a pretty thin.
So yeah, we feel confident that we'll have a path as these incentives -- as the threshold sort of increases by the year.
Elon Musk -- Chief Executive Officer and Product Architect
Yeah. We'll meet those thresholds –-
[TRANSCRIPT]
Did anyone see some of the details from the earnings call? Many of us suspect that the Model 3 pricing will be adjusted so that the Long Range will qualify, I know it's still a very vague statement but based on this, I would assume Tesla is making sure all model categories will have at least a trim that will qualify. For the Model 3, I'm hoping this is for the Long Range:
"Tesla CEO Elon Musk said during the company’s third-quarter earnings call on Wednesday evening that the company expects to fully meet the Inflation Reduction Act requirements that would allow consumers to receive tax credits on new EV purchases"
I was able to postpone my order delivery until January 2023, so I guess I will have to see what happens by then...
"Tesla CEO Elon Musk said during the company’s third-quarter earnings call on Wednesday evening that the company expects to fully meet the Inflation Reduction Act requirements that would allow consumers to receive tax credits on new EV purchases"
I was able to postpone my order delivery until January 2023, so I guess I will have to see what happens by then...
Hard to know what to take from all of this. I listened to the recording as well. Elon said they "have a path" for the minerals requirements, but I don't think I'd bank on that for January 1 2023.
I'm still wagering on a de-contented M3 LR to meet the $55k price ceiling. And that the content they'd remove would likely be something I'd pay for after-sale, bringing the effective cost to around where it's been, less $3750 in tax incentives.
I'm still wagering on a de-contented M3 LR to meet the $55k price ceiling. And that the content they'd remove would likely be something I'd pay for after-sale, bringing the effective cost to around where it's been, less $3750 in tax incentives.
blackT3$!@
2021 LR Model 3
If you want a Tesla, buy a Tesla. Don’t hold your breath waiting for a tax break that may not apply to any Tesla.
If you have an existing Model 3 Long Range on order it probably cost more than the $55k limit for sedans and will not qualify.
I suspect that new orders in 2023 will magically come in just under $55k, probably by removing something that can be purchased separately in the app after the sale.
I suspect that new orders in 2023 will magically come in just under $55k, probably by removing something that can be purchased separately in the app after the sale.
I’ve already owned plenty of Teslas. Planning for the next purchase to make sure to take advantage of the $7500 rebate is what anyone with financial smarts should do. How foolish would it be to buy the car right before you end up finding out it qualifies for the $7500 rebate if you only waited a few months.
With that being said, I assume it will be with some options removed to bring it under the $55k price, but we won’t know until it gets closer to end of year I guess. The deposit I have down is only $250, if I have to lose that and get a new order, obviously that would be the route to go if the old order won’t qualify…
The problem is it wouldn't be a few months. If Tesla's qualify for the entire $7500 in 2023, the backlog will be insane. A lot of people are waiting right now for that credit. Also, not many people would qualify for the entire credit. It doesn't carry over and most people would probably be getting $3,000 to $4,000 in credits.
I bought now because I can still get the Valley Air Pollution District $3000 rebate. It stinks that Tesla no longer qualifies for the California rebaye.
The car will be useful for the holidays where I commute all over California. I might kick myself in 2023, but I also might just trade in my 2013 Model S for another Model 3 if the rebates/credits are still there.I believe you can do a Roth IRA conversion to make your liability $7.5K for the year.The problem is it wouldn't be a few months. If Tesla's qualify for the entire $7500 in 2023, the backlog will be insane. A lot of people are waiting right now for that credit. Also, not many people would qualify for the entire credit. It doesn't carry over and most people would probably be getting $3,000 to $4,000 in credits.
I bought now because I can still get the Valley Air Pollution District $3000 rebate. It stinks that Tesla no longer qualifies for the California rebaye.
For anyone looking to finance a vehicle, if the fed hikes the rate a few more times, it will potentially nullify a large portion of the credit through additional interest charges. If you’re trading in a vehicle, you probably should try to get rid of said vehicle ASAP; used car values are dropping quickly and you’ll likely lose thousands in trade value between now and 2023.
For folks paying cash with no trade in, waiting til 2023 could pay off tho. For anyone else, it could be awash or even largely negative to wait.
With that being said, if the used car market collapses, I’m not sure what that will do to new cars. There are several newly received and traded in 2022 Ys (ie vehicles with less than 500 miles) in my area, that are thousands less than a new one….and they’re sitting. I’m guessing new cars will have to get cheaper but I dunno if that means they’ll be the same models or newly launched cheaper ones.
For folks paying cash with no trade in, waiting til 2023 could pay off tho. For anyone else, it could be awash or even largely negative to wait.
With that being said, if the used car market collapses, I’m not sure what that will do to new cars. There are several newly received and traded in 2022 Ys (ie vehicles with less than 500 miles) in my area, that are thousands less than a new one….and they’re sitting. I’m guessing new cars will have to get cheaper but I dunno if that means they’ll be the same models or newly launched cheaper ones.
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Snow Drift
[Off-Road Assist] Activated
Or just have a job. Just about everyone who can afford these cars pays $7,500+ in Federal income tax each year.
All companies will qualify for full credit as long as the manufacturing is in the US/Mexico of FTA country. The battery sourcing does not go into affect until 2024 if I understood the IRA correctly.The problem is it wouldn't be a few months. If Tesla's qualify for the entire $7500 in 2023, the backlog will be insane. A lot of people are waiting right now for that credit. Also, not many people would qualify for the entire credit. It doesn't carry over and most people would probably be getting $3,000 to $4,000 in credits.
I bought now because I can still get the Valley Air Pollution District $3000 rebate. It stinks that Tesla no longer qualifies for the California rebaye.
So I do believe for 2023 TEsla, GM, Ford, and some others will qualify for full credit as long as price is not above 55k for cars or 80k for trucks and SUVs. The battery Sourcing part takes effect in 2024 where a certain percentage needs to be sourced from US or FTA countries.
Nope, it goes into effect as soon as guidance is released. Expected late this year.
I traded in my old car in the nick of time. I've already KBB values go down on it too. I see the rate hikes as a threat for the tax credit too. Which is why I'm trying to push to get a new M3 asap.
Noted, I picked a MYP on Aug 2022, love the car and hopefully purchase another Tesla for the wifey either M3P or MYP. It be like Ford & GM have already raised their prices to offset the irs rebate - so called supply demand excuse. Waiting for that rebate they may not come but prices have increased. To me battery really doesn’t matter, I’m fine with my 2170 battery pack. I think most people will sell their cars now to take advantage of rebate that may never come. Prices are falling and for new M3’s are available on Tesla website now. If you need or want one, just get one.
The public comments that the IRS requested are due by 11/4. So then the question is how long will it take them to review the comments and produce the final guidance? All we know is that they are required to publish it by the end of the year. So it will be out sometime between 11/7 and 12/30.
But even then you won't know immediately which vehicles qualify. Manufacturers will have to review the guidance and figure out which of their vehicles qualify.
I wish Congress used 12/31 as a cut off point for tax credits and the IRS was quick to note the clarity around 2023 MY vehicles too. After the tax credit went away, I removed the Kia EV6 and Hyundai Ioniq from consideration, especially with the abhorrent "market adjustments" stealerships love to add onto the vehicles they sell.
It makes it so much easier to get a RWD M3 over a Polestar 2 with similar configured packages to include some of the features Tesla offers in a base M3 because the tax credit won't absorb the price differences anymore.
Tax credits should be instantaneous at the time of purchase, not some claim in 2024 for the 2023 tax year.
That would be a rebate and not a tax credit...
There is no way to 100% know that you are going to qualify for a tax credit until the year is over. (I suppose that isn't 100% true because you can qualify for the income limit on the prior years MAGI, but if you didn't qualify last year but think you will this year could cause a problem.) So even when the tax credit can be applied at purchase time , in 2024, some people are going to get nailed by it. (For example, if they are close to the income limit, and buy the car with the time of purchase credit early in the year, but they get a big raise, or bonus, that pushes them over the limit by the end of the year; they would then have to repay the credit they were given to the IRS when they file.)
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