General Discussion: 2018 Investor Roundtable

[elasalle]

Not sure if there's anyway to know the answer to your Q... we'll just have to wait and see, but position for endless resilience by bears/shorts. They are determined, even if completely wrong, so they will have to be squeezed. I don't think they will "choose" to start to cover based on any sort of logic or factual observations.



My understanding is that Model 3 production has ramped to the point (2,000+ per week) that it'd take a tremendous effort on Tesla's part, and I think Tesla will choose to apply that level of effort into simply accelerating production rate to 5,000 by May/June and beyond in 3Q18, which would ensure all U.S. first day reservations who want LR + PUP and LR + AWD get the full credit. I'm not sure about SR, which seems to be more of an early 2019 story, but I think it'd be fair for LR buyers to get the full credit and SR to get half, and if SR buyers really want the full, they can go for a 75D Model S in 2Q/3Q18. I think that's a fair outcome. I don't think Tesla will bend out of shape to get $7,500 to people who only want to pay $35,000 for Model 3.

Correct, if SR is getting pushed to 2019(some thread is there on this ), no way they will get the full credits, it looks like ....

 

[Reciprocity]

My understanding is that Model 3 production has ramped to the point (2,000+ per week) that it'd take a tremendous effort on Tesla's part, and I think Tesla will choose to apply that level of effort into simply accelerating production rate to 5,000 by May/June and beyond in 3Q18, which would ensure all U.S. first day reservations who want LR + PUP and LR + AWD get the full credit. I'm not sure about SR, which seems to be more of an early 2019 story, but I think it'd be fair for LR buyers to get the full credit and SR to get half, and if SR buyers really want the full, they can go for a 75D Model S in 2Q/3Q18. I think that's a fair outcome. I don't think Tesla will bend out of shape to get $7,500 to people who only want to pay $35,000 for Model 3.

The more I look at it, the less I think they can shift production to Canada and outside the US to delay the credit phase out so I agree with most of this. People need to understand that you must have a lot of income to use a $7500 tax credit. It does not roll over. Not everyone is the same so there are always exceptions and I hope those folks put in their reservations really early and are queued up now to order an SR under the wire. Cali would be a place where its more likely due to how much people make vs say the mid west, due to the cost of living.

Here is the problem. Based on just your average delivery rate in the US for a quarter, you would have to shift ALL of that out of the US, but only if production really is ramping the model 3. If it stays around 2k/w for the entirety of Q2 then its possible to shift enough out of the US to stay under 200,000. But what would be worse? Ending next quarter at 3k and averaging 2k/w or potentially starting the phase out process sooner? Lets not forget that there is a push to extend the credit that should make sense to both Rebubs and Dems. What they can layout is that some major US automakers will be out of credits after pushing the Germans to build cars in Germany to sell in the US to get the credit, while making the US companies that lead the way not competitive. It was an ill conceived plan to begin with. It should have always been like the solar credits where you have a set date to start the phase out of the credit and the credit can be used over more then one year. Hopefully they correct both of these issues. But we cannot assume that will happen. With the admin wanting fair trade, they should either level the field or get rid of the credit for everyone.

 

[K_Dizzle]

The more I look at it, the less I think they can shift production to Canada and outside the US to delay the credit phase out so I agree with most of this. People need to understand that you must have a lot of income to use a $7500 tax credit. It does not roll over. Not everyone is the same so there are always exceptions and I hope those folks put in their reservations really early and are queued up now to order an SR under the wire. Cali would be a place where its more likely due to how much people make vs say the mid west, due to the cost of living.

Here is the problem. Based on just your average delivery rate in the US for a quarter, you would have to shift ALL of that out of the US, but only if production really is ramping the model 3. If it stays around 2k/w for the entirety of Q2 then its possible to shift enough out of the US to stay under 200,000. But what would be worse? Ending next quarter at 3k and averaging 2k/w or potentially starting the phase out process sooner? Lets not forget that there is a push to extend the credit that should make sense to both Rebubs and Dems. What they can layout is that some major US automakers will be out of credits after pushing the Germans to build cars in Germany to sell in the US to get the credit, while making the US companies that lead the way not competitive. It was an ill conceived plan to begin with. It should have always been like the solar credits where you have a set date to start the phase out of the credit and the credit can be used over more then one year. Hopefully they correct both of these issues. But we cannot assume that will happen. With the admin wanting fair trade, they should either level the field or get rid of the credit for everyone.

Please keep in mind that the Ontario EV rebate is $14k, is not dependent on income, has no upper bound on widgets and will most likely be phased out in June as the liberals will most likely be voted out. Elon has Canadian roots, he might be giving us Canadians hand with the price for as long as he can.

 

[elasalle]

The more I look at it, the less I think they can shift production to Canada and outside the US to delay the credit phase out so I agree with most of this. People need to understand that you must have a lot of income to use a $7500 tax credit. It does not roll over. Not everyone is the same so there are always exceptions and I hope those folks put in their reservations really early and are queued up now to order an SR under the wire. Cali would be a place where its more likely due to how much people make vs say the mid west, due to the cost of living.

Here is the problem. Based on just your average delivery rate in the US for a quarter, you would have to shift ALL of that out of the US, but only if production really is ramping the model 3. If it stays around 2k/w for the entirety of Q2 then its possible to shift enough out of the US to stay under 200,000. But what would be worse? Ending next quarter at 3k and averaging 2k/w or potentially starting the phase out process sooner? Lets not forget that there is a push to extend the credit that should make sense to both Rebubs and Dems. What they can layout is that some major US automakers will be out of credits after pushing the Germans to build cars in Germany to sell in the US to get the credit, while making the US companies that lead the way not competitive. It was an ill conceived plan to begin with. It should have always been like the solar credits where you have a set date to start the phase out of the credit and the credit can be used over more then one year. Hopefully they correct both of these issues. But we cannot assume that will happen. With the admin wanting fair trade, they should either level the field or get rid of the credit for everyone.

Instead of hitting 200,000, they could still do US and hit just 199,999 ... So everything doesn't need to be channelled out of US. ?

 

[ValueAnalyst]

Instead of hitting 200,000, they could still do US and hit just 199,999 ... So everything doesn't need to be channelled out of US. ?

In such a scenario, would you be concerned about "Tesla games the system for the rich" type of negative press?

 

[HG Wells]

Dont forget. Convert an IRA or 401k to a ROTH IRA and you have raised your income by that amount. Use the $7500 to pay the taxes on the conversion.

IE: You have been out of work all year, you are single, have 64,554 in an IRA. Convert to ROTH IRA and get the $7500 !

Assuming standard 12K deduction.

 

[Reciprocity]

Please keep in mind that the Ontario EV rebate is $14k, is not dependent on income, has no upper bound on widgets and will most likely be phased out in June as the liberals will most likely be voted out. Elon has Canadian roots, he might be giving us Canadians hand with the price for as long as he can.

Oh no doubt. I just dont think they are trying to pull of some kind of delivery gymnastics to extend the tax credits. The other thing to consider is that most in Canada want/need AWD. Also consider that Canada is about 1/10th the population so probably 1/'10th the reservations when compared to the US. So that would be around 25,000 Canadian reservations if you assume a 50/50 split between US and the rest of the world. The problem is that the vast majority of those 25,000 will probably want SR AWD and probably the cheapest interior. I think the LR PUP RWD woudl be the least popular setup there, probably as few as 5,000. Its just not nearly enough even if Tesla can only manage 2k/w next quarter.

 

[Reciprocity]

Dont forget. Convert an IRA or 401k to a ROTH IRA and you have raised your income by that amount. Use the $7500 to pay the taxes on the conversion.

IE: You have been out of work all year, you are single, have 64,554 in an IRA. Convert to ROTH IRA and get the $7500 !

Assuming standard 12K deduction.

Every rule has exceptions. This is certainly an option. I did this with my Solar+Model S purchase last year.

 

[elasalle]

In such a scenario, would you be concerned about "Tesla games the system for the rich" type of negative press?

Why should we, its not like Tesla doesn't get enough FUD already. No rules broken, just another loophole.
Best case scenario would be -- Tesla gamed the system, so we are stopping tax credits for all EV - what a scenario ...

 

[K_Dizzle]

Oh no doubt. I just dont think they are trying to pull of some kind of delivery gymnastics to extend the tax credits. The other thing to consider is that most in Canada want/need AWD. Also consider that Canada is about 1/10th the population so probably 1/'10th the reservations when compared to the US. So that would be around 25,000 Canadian reservations if you assume a 50/50 split between US and the rest of the world. The problem is that the vast majority of those 25,000 will probably want SR AWD and probably the cheapest interior. I think the LR PUP RWD woudl be the least popular setup there, probably as few as 5,000. Its just not nearly enough even if Tesla can only manage 2k/w next quarter.

Most Canadians don’t have all wheel drive vehicles and they don’t need it. Waiting for the AWD itself might jepordize the $14k rebate. Everyone I know with a reso will take first production if given the chance.

 

[elasalle]

Most Canadians don’t have all wheel drive vehicles and they don’t need it. Waiting for the AWD itself might jepordize the $14k rebate. Everyone I know with a reso will take first production if given the chance.

14K can get you some good snow tires/ chains etc right?

 

[ggies07]

In such a scenario, would you be concerned about "Tesla games the system for the rich" type of negative press?

no, because at least a year ago, if not more now, Elon explicitly said they would try to manipulate the timing in one of the Q calls. It's not gaming the system for the rich, they just benefit because of the way Tesla is rolling out the cars (ex. owners get priority over non-owners). If they would have gone straight with reservation number, people like me (non-owners) who are not extremely wealthy would not be worried out this... The execution from last summer starting with the production ramp + order priority is one big cluster****.

 

[Curt Renz]

My Tesla account this morning reads: Your Model 3 is ready to be designed.

I live in far northwest suburban Chicago, Illinois.

I reserved in person at the Highland Park, Illinois store on the first morning possible: 2016 MAR 31

I have never owned a Tesla car and am not a Tesla employee.

This morning I told Tesla to hold my place, since I don't want the current limited configuration. My car has been driven for only 25,000 miles and has no problems, so I can be patient.

 

[elasalle]

My Tesla account this morning reads: Your Model 3 is ready to be designed.

I live in far northwest suburban Chicago, Illinois.

I reserved in person at the Highland Park, Illinois store on the first morning possible: 2016 MAR 31

I have never owned a Tesla car.

This morning I told Tesla to hold my place, since I don't want the current limited configuration. My car has been driven for only 25,000 miles and has no problems, so I can be patient.

Curt what was your delivery window prior to invite? Jan-May or Apr-Jun? thanks.

 

[Curt Renz]

Curt what was your delivery window prior to invite? Jan-May or Apr-Jun? thanks.

Mar-May 2018 for the currently available configuration, otherwise Late 2018 for all other options.

 

[flankspeed8]

Dont forget. Convert an IRA or 401k to a ROTH IRA and you have raised your income by that amount. Use the $7500 to pay the taxes on the conversion.

IE: You have been out of work all year, you are single, have 64,554 in an IRA. Convert to ROTH IRA and get the $7500 !

Assuming standard 12K deduction.

Not sure how many people there are out there that have been out of work all year who are ready to jump in and buy a close to $50,000 car just to "save" $7500 unless they were out of work by choice. I may be wrong though, but good thought.

 

[Mike Smith]

A few weeks ago all of Europe was looking like it was going to be a big drop year over year, including Norway. Now Norway just passed last year and looks like it will beat it significantly. Hopefully this is playing out in the rest of Europe as well.

 

[Zaxxon]

Well, the size of my truck is limited right now as I'm expecting to buy a Model 3 in the next month or three. But I backed up what I've got and added a bit this morning at $304.

 

[HG Wells]

Bought 5 one week options at 320 (lottery tickets) $1.48.

Trying to resist selling my EE bonds (almost expired ) and buying LEAPS.
Must resist, must resist.

Not advice in any way, shape or form.

 

[Waiting4M3]

Not sure how many people there are out there that have been out of work all year who are ready to jump in and buy a close to $50,000 car just to "save" $7500 unless they were out of work by choice. I may be wrong though, but good thought.

After 2008 downturn, people who choose to stay out of the labor pool is pretty high. Just ask some here what they think about the "real" unempoyment rate it and you can hear all about it.