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Model 3 Production ramp?

Discussion in 'Model 3' started by Ryan H, Sep 20, 2015.

  1. Ryan H

    Ryan H Member

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    I know the production goal for the Gigafactory is 500k cars in 2020. Has anyone seen anything about expected production in 2018-19 with regards to the Model 3? Assuming the preorders are off the charts, it seems possible that the first year of production could be filled within days or even hours of the unveil in March.
     
  2. MartinAustin

    MartinAustin Active Member

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    Definitely. This will be a bonkers pre-order situation... think iPhone, but for cars. Expect broken Tesla web page, servers, etc. etc.

    The big pre-order, coupled with the small production during the ramp-up, will ensure that a large amount of initial production time will be spoken for very quickly.

    I'm expecting deliveries to start right around 2 years from now, in a repeat of the madness & agony going on with Model X right now. Three months' of early ramp-up will be spoken for in a very short time at the pre-order site. As for one complete year of deliveries, that's harder to say how long it will take to become reserved. But... Tesla continues to permeate the marketplace, the Model X will continue this, and by March of next year anticipation for the Model 3 could be pretty high. I myself have "pre-sold" dozens of Model 3 cars while I've had my Model S. It is normal now to meet people who already know there is a moderately-priced Tesla coming out in a few years. Originally I was the one revealing it - now people already know it.

    In terms of expected production through to 2020 and beyond, certain professional financial analysts who focus on the performance of TSLA have built up various spreadsheets for yearly production numbers, based on the scant information that exists from Tesla re: projections. You will have to search around for that information, perhaps, asking in the investor section here on TMC.
     
  3. Ryan H

    Ryan H Member

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    You're more optimistic than I am. Every time I see late 2017, I think New Year's Eve party at the Fremont factory for people taking first delivery.

    I've only been following Tesla for about 6 months, but I'm already well aware of Tesla's tendency to be late with new vehicles and features (i.e. Autopilot).
     
  4. Foxhound199

    Foxhound199 Member

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    I honestly think that the federal tax credit is going to play a role in the way Tesla ramps up. Think about it, from the moment they reach that 200,000 number, it becomes a countdown clock, not a car limit. That means from that point, the more cars they can get into US buyer hands, the more $7500 credits they get to hand out. If they're not ready to roll at 50,000+ cars/quarter the quarter they hit 200,000, it will be money going down the drain.
     
  5. bigbear

    bigbear Member

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    I'm not following you on this. It's 200k total and I think they are around 50k now. I hope I can get in before the rebate dries up.
     
  6. ProphetM

    ProphetM Member

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    The credit gradually goes away - it's not an instant dropoff when they hit 200,000, and it drops off by quarter, so Tesla has an opportunity to enable more people to get the credit. After the quarter in which they hit 200k, they get one more quarter of 100% credit, then two quarters at 50%, and two more at 25%.

    So to maximize the number of people that get the credit, they would want to:
    A) Hit full production capacity before reaching 200k total sales, and
    B) Reach 200k sales at the very beginning of a quarter.

    Then they will have nearly 6 months of full production with all US sales getting the full credit, followed by a year of draw-down.
     
  7. Ryan H

    Ryan H Member

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    I tried to post something on this thread the other day, but since I'm new, my post got flagged for moderator approval. It hasn't shown up yet, so I'll try again differently.

    I wonder how many Model 3 buyers will be eligible for the full $7500 federal tax credit based on income. As I understand it, when it comes to the EV tax credit, a person's tax liability cannot be less than zero. Someone such as myself would not be eligible for the full amount. Using myself as an example, I'm a single guy with no kids. I file an Individual tax return. For 2015, an individual would have to have a taxable income of $46825 to have a tax liability of $7500. Using myself as the example, I take the standard deduction of $6300 and a personal exemption of $4000. Adding it all up, I would have to have an income of $57125 to have a tax liability of $7500. I do not make that much money, so I would not be eligible for the full amount. I wonder how many people like myself are expecting the full amount not realizing they won't be eligible.
     
  8. bigbear

    bigbear Member

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    Thank you for this info, I think there should be a separate thread for this kind of info. I tried to figure out if I'd be eligible and I have not been able to figure it out with my tax situation. Married, three kids, multiple jobs, ect.
     
  9. Ryan H

    Ryan H Member

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    If you have your 1040 from last year, I think the easiest thing to do would be look at line 63(?). It should be your total tax. If it's less than $7500, you won't get more than that amount.

    Full disclosure: I'm not a tax expert, but this has been pointed out to me by others. I'm just trying to pass on the info.
     
  10. bigbear

    bigbear Member

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    That sounds easy enough, I'll take a look. Thank you.
     
  11. MassModel3

    MassModel3 Member

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    You're absolutely right, the actual tax credit is UP TO $7,500. People forget that fact, and it's great that you reminded everybody. In the Model S and X forums, most people who can afford an S or X are making enough that talk of the $7,500 credit is exactly that -- $7,500 back in their pockets. But when we're talking about people waiting for the 3 because they just can't afford the S or X, the useable tax credit will frequently be under the full amount.
     
  12. dgpcolorado

    dgpcolorado Member

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    I'm in the same boat. I could even wait until the credit has dropped to $1875, and use that instead (let others get ahead of me in the queue).

    There is another approach however: if you lease the car the leasing company takes the credit and should use it as a down payment to reduce lease payments. Then you can buy out the lease. (Whether Tesla offers leases to non-business entities and how Tesla structures leases, I couldn't say. I'm guessing that they will for the "affordable" Model 3.)

    Another option for those with traditional IRAs is to convert some money to a Roth IRA, which increases one's taxable income. But this is tax inefficient because it also raises one's tax bracket.

    I'm tempted to go the leasing route, in part because of Tesla's QC issues, but then I would forfeit most of the $6000 Colorado state tax credit, which is refundable, unlike the federal tax credit. Hard to know what to do.
     
  13. bigbear

    bigbear Member

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    And is it based of previous years taxes or the year you're in, I'm pretty sure it's the latter. If you buy a Tesla in January, you're not going to get that rebate for potentially over a year.
     
  14. Ryan H

    Ryan H Member

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    I have also been thinking about a lease. I've never done it before, but it may be more practical for me.
     
  15. MassModel3

    MassModel3 Member

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    The tax credit applies to the refund for the year in which you sign the purchasing paperwork (regardless of when you take delivery). If you get your Model 3 in 2017, you'll be able to apply for the tax credit in early 2018 when you do your 2017 taxes.

    And don't confuse "rebate" with "credit". Unless your state offers a rebate, we're just talking about a tax credit for federal, and possibly a state tax credit if your state offers one.
     
  16. Ryan H

    Ryan H Member

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    I assume it would be current year. Maybe one of the Model S owners could confirm. I don't see the tax credit as being a big thing for the Model 3, and I'm glad Elon is pushing $35000 before incentives, unlike Chevy who is pushing $30000 after incentives for the Bolt. I think the tax credit will phase out pretty quickly by the time the Model 3 doesn't have a backlog that goes back to before production was started.

    The only reason I addressed the tax credit was because Foxhound199 brought it up. Personally, I don't think the tax credit will have any effect on Tesla's production ramp of the Model 3. I think Tesla will ramp it up as fast as they reasonably can, assuming they have the orders, which I'm pretty sure they will and then some.
     
  17. dgpcolorado

    dgpcolorado Member

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    The tax credit is for the year in which you purchase the car. As for not getting it until tax season the following year, that doesn't have to be the case. If you are subject to withholding or pay estimated taxes, you can just adjust how much you pay each pay-period or quarter. For the former, you just decrease the amount withheld each pay-period and increase your take-home pay.

    If, for example, you expect to pay $8000 in federal income taxes and you buy a qualifying EV, you can adjust your withholding to eliminate all income tax. Then, when you pay your taxes the following year you would pay the $500 owed (which is below the penalty limit for under-withholding). If this stuff is unfamiliar, speaking with a tax expert would be a good idea. But the point I am trying to make is that it isn't necessary to wait for the credit in the form of a very large refund the following year. (And getting any tax refund suggests that one's withholding could use some adjusting.)

    FWIW.
     
  18. ProphetM

    ProphetM Member

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    That's quite a good idea. One hitch I see is if your purchase is delayed too long. For instance if you expect to get the car in late 2017 and have been reducing your withholding for a long time, but then delivery slips to 2018, you could be very screwed in the taxes department, possibly even facing penalties for underpayment. If you can be sure you will get it in the same year you change your withholding - say early 2018 expectation, which has room for slippage to late 2018 - then that would work very well.
     
  19. dgpcolorado

    dgpcolorado Member

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    A valid point. The example given earlier, to which I was responding, was about a car purchased in January but the tax credit wouldn't be received until tax season the following year.

    In your example, if the car is delivered in December 2017, there is no point in adjusting withholding (much) because the tax credit refund will be obtained in just a few months. If, on the other hand, the delivery is delayed until January 2018, then you can just adjust withholding for that year instead. It is best to adjust withholding only when you get the car or are absolutely sure you will get it in that tax year. In the event that you botch withholding you can make up some of the problem by drastically increasing withholding during the last few pay-periods of the year to reduce the shortfall.
     
  20. bigbear

    bigbear Member

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    I thought I had this figured out and now I'm more confused than ever. I guess I'll just wait until I actually get the car to see how I can get the full credit.
     

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