East Coasters to get short end of the stick

[EV-Bull]

I am not trying to get into an argument with anyone about how tax credits work. I am simply restating what I was told by a Tesla representative at Tesla (the national office, not my local store) today.

Regarding knowing how the tax rebate works, having received the rebate on 2 electric cars so far, I think I understand how it works. There is also a cap limit per manufacturer, and this will eventually come into play with Tesla when it reaches the upper threshold of the limit. Having been a Tesla stockholder for many years, and having been a Tesla owner for almost 3 1/2 years I am very familiar with how the federal tax credit works.

At what point do you "quaify" for the tax credit? When you order? Take delivery? Or something else?

 

[Dave Garaffa]

I think we need to distinguish between *configuration* priority and *manufacturing* priority. Tesla is not going to reconfigure its manufacturing lines 7 x 4 (PXXD, XXD, xxD, xx) = 28 different times -- that is much, much more expensive to them (in terms of cost and downtime) than the difference in delivering to the east coast vs. west coast. Historically, this is the approach that Tesla has taken with the Model S and Model X, and I see no reason why this would be different with the Model 3.
.snip.
To spell it out explicitly, under this rollout plan, if you're a non-owner on the East Coast and order a PXXD, only the following six groups will get their car before you:

1. West Coast family members and employees who ordered a PXXD
2. West Coast existing Tesla owners who ordered a PXXD
3. West Coast non- Tesla owners who ordered a PXXD
4. Central US Tesla owners who ordered a PXXD
5. Central US non-Tesla owners who ordered a PXXD
6. East Coast Tesla owners who ordered a PXXD

....Thank You!... Clearly the voice of reason and yes it certainly makes the most sense.

 

[eloder]

I think we need to distinguish between *configuration* priority and *manufacturing* priority. Tesla is not going to reconfigure its manufacturing lines 7 x 4 (PXXD, XXD, xxD, xx) = 28 different times -- that is much, much more expensive to them (in terms of cost and downtime) than the difference in delivering to the east coast vs. west coast. Historically, this is the approach that Tesla has taken with the Model S and Model X, and I see no reason why this would be different with the Model 3.

Now, is it possible that Tesla will open up the Model 3 *configurator* for reservation-holders in a given macro-region (e.g. US + Canada) in the provided sequence? Sure, let's say they do that. Months after that happens, when production's about to fire up, Tesla will have a good idea of *how many* people have actually ordered (vs. deferred or cancelled), and *what* they ordered, they will come up with a manufacturing plan to drain that sequence in a way that maximizes their profit and delivery numbers. To me, this means that they will (as Elon has stated explicitly) deliver PXXDs first (likely in the same 1-7 sequence that the rep gave), then XXDs (again, likely in 1-7 order), then xxD (1-7) and xx (1-7). This approach makes good business sense for Tesla, as they will make better margins on the PXXDs (very important since the Gigafactory will not be up to full speed yet), and they will also only need to reconfigure their Model 3 manufacturing lines four times (instead of 28).

To spell it out explicitly, under this rollout plan, if you're a non-owner on the East Coast and order a PXXD, only the following six groups will get their car before you:

1. West Coast family members and employees who ordered a PXXD
2. West Coast existing Tesla owners who ordered a PXXD
3. West Coast non- Tesla owners who ordered a PXXD
4. Central US Tesla owners who ordered a PXXD
5. Central US non-Tesla owners who ordered a PXXD
6. East Coast Tesla owners who ordered a PXXD

Right after that, you're up:

7. East Coast non-Tesla owners who ordered a PXXD

...and then:

8. West Coast family members and employees who ordered a XXD
9. West Coast existing Tesla owners who ordered a XXD
10. West Coast non- Tesla owners who ordered a XXD
...etc...
28. East Coast non-Tesla owners who ordered a xx (base model)

I agree and believe it will be based like this (with perhaps a little more oomph/priority given to owners).

Ultimately your place in line will much more largely depend on A) Your willingness to line up early this morning, and B) Your willingness to spend more money than who you are.

 

[tga]

Its certainly not based on delivery cost, since the customer pays that.

The customer pays a flat fee regardless of delivery location (even if you pick up at the factory), so yes, it's cheaper to ship a car to LA than NY.

 

[Az_Rael]

At what point do you "quaify" for the tax credit? When you order? Take delivery? Or something else?

When you take delivery. Its based on the "in Service" date of the vehicle based on Form 8936 from the IRS. http://www.irs.gov/pub/irs-pdf/f8936.pdf


That's why this is going to get exciting around here once Tesla hits the 200K limit and the phaseout clock begins.

Here is the government website that will list when various manufacturers officially hit the 200K: Federal Tax Credits for All-Electric and Plug-in Hybrid Vehicles

 

[model3fan]

At what point do you "quaify" for the tax credit? When you order? Take delivery? Or something else?

I tried to spell it out the incentives with the help of previous TMC posts here if you're interested Incentives

Edit: sorry, I thought you were asking how the incentives work/phase out.

 

[EV-Bull]

Thanks for the info!

 

[rogbmw]

I think this all will get very interesting. Lots of excitement for the model 3. I was simply repeating what the person I spoke with at the Tesla Headquarters said. I specifically repeated with him what he said, and he affirmed it. And again said that Tesla wanted to be perfectly transparent about it.

Regarding the tax incentive, it is when the car is put in service, and registered. Not on a reservation sequence or anything else.

 

[aronth5]

No way.... The way you are moaning tells me you have no idea how the tax credit works OR how it expires.

Let me guess you think that any sale AFTER 200,000 is out of luck?!?! Hint the rebate doesn't vanish that way.

In fact once the 200,000 car is sold Tesla could sell a MILLIONS or even BILLIONS of more cars (in the next calendar quarter or quarters) and they'd ALL be qualifying with the TAX rebate.

Please stop with the FUD will ya?

Yes but the tax credit will not be the full $7,500 for those who still qualify after the 200k Tesla is sold in the US.. There have been many posts clarifying this so your only partially correct..

 

[MiamiNole]

Yes but the tax credit will not be the full $7,500 for those who still qualify after the 200k Tesla is sold in the US.. There have been many posts clarifying this so your only partially correct..

Not entirely accurate. When the 200,000th Tesla car is sold in the U.S., all additional sales during that quarter year and the next quarteyear will be eligible for the full $7500. Then all cars sold during the next two quarters will be eligible for half of the credit. Then the two quarters after that will be eligible for a quarter of the credit. So many buyers who get their cars after the 200,000th car is delivered can still utilize the full credit if Tesla ramps up its production fast enough.

 

[TravelSD80]

Well if California passes SB-680 (removes requirement of collecting CA sales tax for out of state purchasers), then Factory Pickup is the way to go.

Oregon (no state sales tax) might also be an avenue for delivery

I live in CA. So would getting delivery in Oregon really result in no CA tax?

 

[tga]

I live in CA. So would getting delivery in Oregon really result in no CA tax?

Yes, until you go to register your newly purchased car. You'll just pay the sales tax a little later in the process (registration vs purchase).

Now for those of us who live in states without sales tax and want to take delivery at the factory, this is kind of an issue.

 

[ucmndd]

I live in CA. So would getting delivery in Oregon really result in no CA tax?

No sales tax. But when you register your new vehicle in CA you'll pay a "use tax" that is identical to your sales tax rate.