Model S/X Owners Have Priority Model 3 Orders Over Non-Owners

[eisbock]

Objection -
Assumes facts not in evidence. And wow, those last six words are particularly assumptive.

Look. Each buyer of a Model S or X between now and the 3's release, also steps TM towards the "200,000th U.S. sale triggering the phaseout of the credit" - Not just those who purchased before now (HOW DARE THEY!). Why the scorn for only current owners?

I guess the ideal situation would be: If 1) TM stopped selling Ss or Xs right now, then 2) way more people could get that tax credit they need on the 3, that'd be better right?
Now what is wrong with that picture...

I was generalizing and making broad assumptions for a reason. Otherwise, we end up with nit-picky irrational arguments founded on inane technicalities and what-ifs such as this one.

Point is, S/X/Roadster owners generally have lots of money. Everybody loves their Tesla, so many will probably get a 3 (or 3s). All this does is bump the rest of us plebeians down the line, even if we reserve sooner in the cold rain on March 31.

It sucks, and life is hard. Boohoo. $7500 is a bigger chunk of change to me than it is to somebody running around with more Teslas than they have bodies to drive them. I'm not happy about it, but it is what it is. Oh well.

I would be thrilled if Tesla offered a program where current owners can trade in their tax credit to be bumped up in line, because let's be real, that's generally going to be more important to them than the money. I don't give a rat's ass when I get the car, but I sure would like an extra $7500 to play with.

 

[ohmman]

It sucks, and life is hard. Boohoo. $7500 is a bigger chunk of change to me than it is to somebody running around with more Teslas than they have bodies to drive them. I'm not happy about it, but it is what it is. Oh well.

For me, the point of the credit is to encourage adoption. The real question is not so much whether it's a bigger chunk of change to one person or another (though that's a valid discussion as well), but whether someone is buying the car that wouldn't have done so otherwise.

 

[SureValla]

For me, the point of the credit is to encourage adoption. The real question is not so much whether it's a bigger chunk of change to one person or another (though that's a valid discussion as well), but whether someone is buying the car that wouldn't have done so otherwise.

If the intent of the credit was to help people who can't afford an EV buy one they should have phased it out for higher incomes. Instead its a little of the reverse due to the requirement that you make enough to pay 7500 in taxes in the first place. Making it a tax rebate instead of credit (like what was done with hybrids early on) would have fixed this second problem.

 

[eisbock]

For me, the point of the credit is to encourage adoption. The real question is not so much whether it's a bigger chunk of change to one person or another (though that's a valid discussion as well), but whether someone is buying the car that wouldn't have done so otherwise.

I agree, but do you think that will be the driving factor for current owners in their purchase of a 3?

Maybe a better solution is to limit the credits to one per person. If you've already bought an EV, you've already adopted the idea. Unless you mean every EV purchase to be considered an "adoption", which gets to be a bit ridiculous when you're adopting a new child every other year, sometimes trading in the old child because the new one comes with better features (like a higher IQ).

And I suspect well-off Tesla owners will continue to do just this as advancements are made and new models released.

 

[Foxhound199]

If the intent of the credit was to help people who can't afford an EV buy one they should have phased it out for higher incomes.

I think you misunderstood what they meant. It's not for people who can't afford an EV, but for people who would have bought an ICE if all things were equal. It doesn't matter what you can afford so long as the $7500 credit makes the EV more appealing than a comparable ICE you would be in the market for.

So the concern is that if you have already converted to EVs and plan to continue buying them, the credit isn't doing as much good as for someone buying one for the first time.

 

[SureValla]

It doesn't matter what you can afford so long as the $7500 credit makes the EV more appealing than a comparable ICE you would be in the market for.

What I'm saying is the effect of the 7500 is variable depending on how much you are spending.

3 scenarios

Guy 1 Makes 75,000/year
Guy 2 Makes 250,000/year
Guy 3 makes 1,000,000/year

Based on a rule that you shouldnt spend more than ~30% of your income on a car:
Guy 1 is looking at cars that cost up to ~25k
Guy 2 is looking at cars that cost up to ~75k
Guy 3 is looking at cars that cost up to ~300k

Lets now say all 3 can claim the full $7500 tax credit on an EV
Guy 1 has two options. 1) Get a 25k car for 18k or 2) Buy a more expensive car of ~32k. This moves him into the luxury market or brings down a more expensive EV to his level. He can now swing his price by +/-33%.
Guy 2 has the same two options but at the end of the day he's still getting a luxury car. This just lets him go for the premium sound system if he wants. This is a savings of 10% for him.
Guy 3 doesnt give a crap about $7500. This is a savings of 3% for him.

If your a lawmaker your endgame is to get as many EVs on the road as possible. You should probably target your tax credits to those who need it most.

 

[ohmman]

The hard thing about this discussion is that there is very limited evidence to support either argument - I've done plenty of searching and have found conflicting conclusions about the efficacy of tax credits for just about any emerging technology. A somewhat recent NSF study implied that the money would have been more effectively spent on charging infrastructure instead of vehicle purchase incentives.

From what I know about economics, which admittedly isn't all that much, incentives are supposed to be most effective when they have the most impact to the purchaser. Therefore, it stands to reason that as a group, those with more limited incomes will be more likely to purchase an EV because of the credit; they may be priced out of one otherwise. And as a group, those with higher incomes will be less likely to be swayed if they are not given the incentive. It's nearly impossible to gather evidence about whether this is true, though. There will be anecdotes that oppose both of these theoretical norms.

The tricky thing with this particular credit is that it's limited by the number of credits, and not so much by the dollar value. Therefore, higher earners (those paying over $7500 in federal income taxes) are more likely to get the maximum absolute dollar value from the incentive. And earners in a more limited range will be limited by what they owe - therefore limiting the power of the incentive.

This is usually the point where people will say something like "it's your money, you just get to keep it." I disagree pretty strongly with that notion. Without the incentive, I owe that money to the federal government. Getting to "keep it" means they basically are giving it back to me.

Finally, I think Tesla has also diluted the effectiveness of the EV credit. They've done so by creating compelling vehicles in their own right - so compelling that people want the cars with or without the credit (assuming they can afford them). Imagine instead that the only choices were Bolts and Leafs (not to disparage those cars, which I think are good vehicles with my favorite drive source). Shopping a Bolt against a Volt or a Bolt against a Cruze or whatever.. the incentive matters.

 

[brianman]

(1) I was generalizing and making broad assumptions for a reason....
(2) Point is, S/X/Roadster owners generally have lots of money....

(1) Bad approach. (2) Incorrect. Derived content irrelevant, IMO.

 

[brianman]

I would be thrilled if Tesla offered a program where current owners can trade in their tax credit to be bumped up in line, because let's be real, that's generally going to be more important to them than the money. I don't give a rat's ass when I get the car, but I sure would like an extra $7500 to play with.

Given current law, this is kind of impossible without doing something illegal.

 

[eisbock]

What I'm saying is the effect of the 7500 is variable depending on how much you are spending.

3 scenarios

Guy 1 Makes 75,000/year
Guy 2 Makes 250,000/year
Guy 3 makes 1,000,000/year

Based on a rule that you shouldnt spend more than ~30% of your income on a car:
Guy 1 is looking at cars that cost up to ~25k
Guy 2 is looking at cars that cost up to ~75k
Guy 3 is looking at cars that cost up to ~300k

Lets now say all 3 can claim the full $7500 tax credit on an EV
Guy 1 has two options. 1) Get a 25k car for 18k or 2) Buy a more expensive car of ~32k. This moves him into the luxury market or brings down a more expensive EV to his level. He can now swing his price by +/-33%.
Guy 2 has the same two options but at the end of the day he's still getting a luxury car. This just lets him go for the premium sound system if he wants. This is a savings of 10% for him.
Guy 3 doesnt give a crap about $7500. This is a savings of 3% for him.

If your a lawmaker your endgame is to get as many EVs on the road as possible. You should probably target your tax credits to those who need it most.

I've always thought this was the dumbest rule. 30% is high too, usually you see more around 20%.

By this logic, the average American can't afford any new car, and if they can, it'll be a cheap, barebonesmobile. Yet you see people buying new cars all the time.

Every time this comes up, there's always discussion about whether the 20% rule applies to total cost of the car, or how much you should spend in car payments per year. The latter seems far more reasonable, which means it would take the 75k guy three years to pay off his 45k entry level luxury vehicle.

I mean, *sugar*, life's too short to be making above the median income and driving around crappy used cars.

 

[Big-T]

Sorry if this was already posted before, I just figured out how to re-log in without the facebook connect option that went away after the re-design so my read/unread notices aren't current.

Electrek posted that all Tesla Employees got their reservation invites and insiders say most of Tesla's 15,000 employees are reserving, so the line on the 31st starts at around 15,001... FYI Tesla employees began reserving their Model 3s last night, sight unseen

 

[Darryl]

Says someone, predictably, from California.

As a non-owner I want to know if I wait in line on the 31st, will an existing owner who orders online immediately after the event get priority over me (assuming the same location and options).

I keep seeing the word "order" used when talking about the March 31 launch. There is no ordering on March 31. On March 31 up until when the car is in production you place a "reservation" and give them $1,000 to hold your reservation. You will be given a Reservation Sequence Number. It is not an order. That comes much later. When placing a reservation you do not make any decisions on options or what you will be ordering on the car. Sometime starting probably in late 2017 early 2018 (later if there are delays) you will be invited to configure and place an order based on when you placed your reservation with current owners of a Tesla along with Tesla employees bring invited to the design center/studio first. This is when you decide what you want and how much you are willing to pay and then you will place your order and within a week you will get a confirmation of your order from Tesla. Once you place you order there is currently a $500 fee to change the order. Tesla will then take all of the orders and priorities the orders based on what each person ordered and come up with an sequence for the build of the cars. Once your car is six week out from being delivered you will be notified by Tesla your car is about to go into production and they assign your car a VIN, vehicle indentificstiom number.

So for the Event on 31st and online reservations the only thing you need is a credit card. No decisions are required at this point.

There will be a system, devlooed by forum user where reservation holders are encouraged to put their reservation sequence number and where they can see where they are in relation to other reservation holders. Later this system will be used to track key dates and information about the options on their car. This system is voluntary and not related to Tesla Motors. The link to the system will be posted on March 32st.

 

[SureValla]

Sorry if this was already posted before, I just figured out how to re-log in without the facebook connect option that went away after the re-design so my read/unread notices aren't current.

Electrek posted that all Tesla Employees got their reservation invites and insiders say most of Tesla's 15,000 employees are reserving, so the line on the 31st starts at around 15,001... FYI Tesla employees began reserving their Model 3s last night, sight unseen

wow couple things stand out:

• not even employees saw a photo of the car at reservation time so that means we won't on the 31st before the event
• ~15,000 employees (as mentioned above)
• WORKING PROTOTYPE will be shown

 

[sports4eva115]

wow couple things stand out:

• not even employees saw a photo of the car at reservation time so that means we won't on the 31st before the event
• ~15,000 employees (as mentioned above)
• WORKING PROTOTYPE will be shown

LESS THAN 2 MORE WEEKS!!!! *insertexcitedface*

 

[Sp4rky]

wow couple things stand out:

• not even employees saw a photo of the car at reservation time so that means we won't on the 31st before the event
• ~15,000 employees (as mentioned above)
• WORKING PROTOTYPE will be shown

Assuming 13k of 15k employees reserved a Model 3, that's a cool $13 million Tesla can put toward building the car right there.
Imagine what kind of deposit figures they'll see come March 31st and April 1st...

 

[brianman]

wow couple things stand out:

• (A) not even employees saw a photo of the car at reservation time (B) so that means we won't on the 31st before the event
• ~15,000 employees (as mentioned above)
• WORKING PROTOTYPE will be shown

(A) does not imply (B).

 

[gregincal]

(A) does not imply (B).

True, but I would be shocked if it was otherwise. Elon is going to want the maximum anticipation for the reveal event, not letting all the air out by posting stuff earlier in the day.

 

[palmer_md]

It will also make for great press when they disclose how may of the reservations were sight unseen.

 

[StapleGun]

I keep seeing the word "order" used when talking about the March 31 launch. There is no ordering on March 31. On March 31 up until when the car is in production you place a "reservation" and give them $1,000 to hold your reservation. You will be given a Reservation Sequence Number. It is not an order. That comes much later. When placing a reservation you do not make any decisions on options or what you will be ordering on the car. Sometime starting probably in late 2017 early 2018 (later if there are delays) you will be invited to configure and place an order based on when you placed your reservation with current owners of a Tesla along with Tesla employees bring invited to the design center/studio first. This is when you decide what you want and how much you are willing to pay and then you will place your order and within a week you will get a confirmation of your order from Tesla. Once you place you order there is currently a $500 fee to change the order. Tesla will then take all of the orders and priorities the orders based on what each person ordered and come up with an sequence for the build of the cars. Once your car is six week out from being delivered you will be notified by Tesla your car is about to go into production and they assign your car a VIN, vehicle indentificstiom number.

So for the Event on 31st and online reservations the only thing you need is a credit card. No decisions are required at this point.

There will be a system, devlooed by forum user where reservation holders are encouraged to put their reservation sequence number and where they can see where they are in relation to other reservation holders. Later this system will be used to track key dates and information about the options on their car. This system is voluntary and not related to Tesla Motors. The link to the system will be posted on March 32st.

Correct, I should have phrased my post "I want to know if I make my reservation in-store on the 31st, will an owner who places a reservation online on April first get an invitation to order before me".

 

[wdolson]

I think you misunderstood what they meant. It's not for people who can't afford an EV, but for people who would have bought an ICE if all things were equal. It doesn't matter what you can afford so long as the $7500 credit makes the EV more appealing than a comparable ICE you would be in the market for.

So the concern is that if you have already converted to EVs and plan to continue buying them, the credit isn't doing as much good as for someone buying one for the first time.

Limiting the credit to one per tax payer in a household would have been closer to the spirit of the law. This would allow a couple to buy one EV for each of them, but not buy more than that and keep getting the tax breaks.

As for spending 20 or 30% of your income on a car, I agree that is probably more about payments per year. When I bought my last car, it cost about 2/3 my income, but I saved up and paid cash. My Tesla will be a significant percentage of my income too, but it's been 24 years since I bought a car. Unless you make a pretty big income, it's pretty much impossible to buy a decent new car for 20% of your yearly income.

I don't recall a time when it was. The year my father bought his 1967 Caprice (1966) the median income in the US was $4900 and new cars cost $3000-$4000 according to answers.com. I recall my father saying the car cost something like $3400 and he was making a bit less than the median income at the time, around $4200.