That's how I understand it as well. Perfect time to ramp up Megapack production
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Near-future quarterly financial projections
- Thread starter luvb2b
- Start date
Yup
Plus the inverter in a Megapack (I think):
0.97MW*$0.015 = $14,555 for a 4hr Megapack
1.93MW*0.0025= $4,825 for a 2 hr Megapack
Unless they can individually rate the inverter modules in a 2hr Megapack.
Powerwall+: 9.6kW*0.065= $624 (max backup continuous power, it has a full sun 22kW peak output, but I assume the 20kW limit is continuous power)
bkp_duke
Well-Known Member
ByeByeJohnny
Active Member
The main reason why I don't think this will last all the way to 2032 is that Tesla will get SO MUCH money from this. So many will be upset about the worlds richest getting so much 'tax money' that there is no chance this will survive for 10 years.
I'll give it two years before there are some significant changes. No matter who's in power.
I'll give it two years before there are some significant changes. No matter who's in power.
petit_bateau
Active Member
Two questions please ?
Q1. Are the payments the same irrespective of whether installed in USA or sold for - and then installed - export out of USA ?
Q2. Are the payments the same irrespective of whether made in or out of USA ( I think not, if it is the same as cars) ?
I'm guessing these payments advantage US mfg for US internal use. If so short term then getting hold of Tesla storage outside USA is going to get even more difficult (I'm buying SolarEdge, no chance of getting Tesla, and not competitive on price either). Longer term I see a full-blown trade war USA-EU looming due to this.
Todd Burch
14-Year Member
FSD Beta has now gone wide release for anyone who wants it so I think it’s safe to bank all that deferred revenue for Q4.
Very good point of clarification!
Production in the US or territories, sale anywhere:
Though it need not be sold outside the company :
Additionally, it looks like solar shingles and Tesla assembled panels are good for $0.07 / W.
And inverter sub units can get the higher credit tiers:
To confirm, inverters need not be for solar:
Solar powered Megapack backed Supercharging gets a nice cost reduction. As does Tesla solar/battery farms.
Note, there are additional credits not enumerated here.
Full text available here, page 154 for Advanced Manufacturing Production Credit:
https://www.congress.gov/bill/117th-congress/house-bill/5376
petit_bateau
Active Member
Thank you, most helpful. So only US (or US territories) production .... but my reading is that the final purchase must also be by a US entity, i.e, a US taxpayer. So my reading is that both conditions must be satisfied, i.e. made in USA and purchased/installed in USA.
If so there is a pretty significant US-EU trade war looming imho. The EU doesn't just ignore this sort of thing, and it neither fliches nor blinks. And the EU is not a territory of the US !
Where are you seeing the requirement for a US purchaser?
All I see is non-related purchaser (which can still be related).
petit_bateau
Active Member
It is pretty much implicit throughout that the buyer must be a US taxpayer.
"(Sec. 13402) The act allows a new tax credit for buyers of previously-owned qualified clean plug-in and fuel cell vehicles. The credit is limited to the lesser of $4,000 or 30% of the vehicle purchase price. The credit is disallowed for taxpayers whose modified adjusted gross income exceeds certain levels and applies only to vehicles with a sales price not exceeding $25,000. It does not apply to vehicles acquired after 2032."
I'd love the US tax authorities to be giving me a big wodge, but I can't see any language in that which provides for a non-US resident and/or non-US taxpayer to claim the subsidy. In the vehicles bit it also seems implicit (but not explicit) that the vehicles must be licenced and placed into service in the US.
"Part 4--Clean Vehicles
(Sec. 13401) The act modifies requirements for the refundable income tax credit for qualifying plug-in electric vehicles. The modified credit is $3,750 for any vehicle meeting certain critical minerals requirements and $3,750 for vehicles meeting certain battery component requirements. The maximum allowable credit remains $7,500 per vehicle. Vehicles eligible for the credit include those made by qualified U.S. manufacturers and excludes those manufactured or assembled by a hostile foreign entity.
The credit is not available to taxpayers whose modified adjusted gross income exceeds $150,000 ($300,000 for married couples filing jointly) The credit is not allowed for vehicles that have a manufacturer's suggested retail price in excess of $80,000 for vans, sport utility vehicles (SUVs), or pickup trucks, and $55,000 for other vehicles.
The credit does not apply to vehicles placed in service after 2032.
(Sec. 13402) The act allows a new tax credit for buyers of previously-owned qualified clean plug-in and fuel cell vehicles. The credit is limited to the lesser of $4,000 or 30% of the vehicle purchase price. The credit is disallowed for taxpayers whose modified adjusted gross income exceeds certain levels and applies only to vehicles with a sales price not exceeding $25,000. It does not apply to vehicles acquired after 2032.
(Sec. 13403) The act creates a new tax credit for qualified commercial clean vehicles. The amount of the credit is the lesser of 15% of the cost of the vehicle (30% for vehicles not powered by a gasoline or diesel internal combustion engine), or (2) the cost of the vehicle in relation to a comparable vehicle. The credit amount may not exceed $7,500 for vehicles weighing less than 14,000 pounds ($40,000 for other vehicles). Eligible vehicles must have a battery capacity of not less than 15 kilowatt hours and be capable of being recharged from an external source of electricity.
The credit does not apply to vehicles acquired after 2032."
In the wind leasing section it dos at least make it clear that the territorial extent is the US EEZ though it cannot use that language as US never ratified/etc UNCLOS for various reasons, but one can read-across from this that the act is US-facing, not whole-of-world facing.
"Part 5--Offshore Wind
(Sec. 50251) The act allows the Department of the Interior to grant leases to develop energy on federal offshore land in the Outer Continental Shelf (OSC) in areas that were withdrawn from leasing in 2020. Thus, the act nullifies the presidential memorandum titled Memorandum on the Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing Disposition published on September 8, 2020, as well as the Presidential Determination on the Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing Disposition published on September 25, 2020.
Further, it expands the definition of the OCS under the Outer Continental Shelf Lands Act to include land that is within the U.S. exclusive economic zone and adjacent to any territory of the United States, thus the act expands the submerged lands that are available for energy leases. Interior may also conduct wind lease sales that are in such areas if the leases meet specified criteria."
Or am I missing something ?
We've been discussing section 13502, Advanced Manufacturing. It does not have any other references in the bill. 45X is referenced, but not in a sale to limiting way.
Agree vehicles sales are for US buyers.
One important aspect of Megapack financials that is worth highlighting is how big of an impact price increases over the past 16 months are likely to have on TE margins in 2023 and especially 2024.
The biggest increases have been for larger systems. For example, a 1000 Megapack order at 3916MWh/970MW currently costs $468/kWh. On July 26, 2021 -- 16 months ago -- a system less than 10% that size was priced at only $280/kWh. Tesla Megapack Pricing, Specs, Ordering Details and More Revealed - TeslaNorth.com
So the price per installed MWh increased >67% in 16 months!
Price increases for smaller systems were also significant. For example a ~30 MWh (4MWh/MW) system went from $328/kWh to $504/kWh in the same time period -- a 54% increase!
There was also at least one other large price increase in March 2022. Tesla hikes Megapack prices as backlog extends to next year
Installation estimates have been 18-24 months from order (or more), so it seems likely that the Q3 2022 financials do not reflect any of the 2022 price increases. But the impact on revenues and margins should start showing up over the next 12-24 months.
Although there were cell and chip cost increases a significant chunk of the price increases seems likely to go directly to the bottom line. Combine with (1) US production tax credits (2) other additional revenue/income streams discussed in recent posts in this thread and (3) likely cost reductions as Lathrop rampes up, it seems likely that Megapack margins will skyrocket over the next few years. With Elon estimating 150-200% annual Megapack growth TE could (finally) make a significant positive contribution to margins.
In fact, given the huge Megapack price increases that will be hitting the bottom line over the next couple years this contribution already seems baked in (as long as Tesla can ramp up Megapack production).
*All prices include installation.
The biggest increases have been for larger systems. For example, a 1000 Megapack order at 3916MWh/970MW currently costs $468/kWh. On July 26, 2021 -- 16 months ago -- a system less than 10% that size was priced at only $280/kWh. Tesla Megapack Pricing, Specs, Ordering Details and More Revealed - TeslaNorth.com
So the price per installed MWh increased >67% in 16 months!
Price increases for smaller systems were also significant. For example a ~30 MWh (4MWh/MW) system went from $328/kWh to $504/kWh in the same time period -- a 54% increase!
There was also at least one other large price increase in March 2022. Tesla hikes Megapack prices as backlog extends to next year
Installation estimates have been 18-24 months from order (or more), so it seems likely that the Q3 2022 financials do not reflect any of the 2022 price increases. But the impact on revenues and margins should start showing up over the next 12-24 months.
Although there were cell and chip cost increases a significant chunk of the price increases seems likely to go directly to the bottom line. Combine with (1) US production tax credits (2) other additional revenue/income streams discussed in recent posts in this thread and (3) likely cost reductions as Lathrop rampes up, it seems likely that Megapack margins will skyrocket over the next few years. With Elon estimating 150-200% annual Megapack growth TE could (finally) make a significant positive contribution to margins.
In fact, given the huge Megapack price increases that will be hitting the bottom line over the next couple years this contribution already seems baked in (as long as Tesla can ramp up Megapack production).
*All prices include installation.
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Correct, but the point I think @petit_bateau is trying to make earlier in the thread is that export sales of Megapack may well be impacted by retaliatory tariffs to counterbalance the impact of the IRA. Perhaps Tesla will build an equivalent to Lathrop in Berlin and/or Shanghai to avoid this issue?
Lathrop only has a "puny" 40 GWh capacity.
Tesla will need at least 25X the production capacity to reach its goal of a TWh scale battery storage business. So yes, they'll need Megapack production in Europe and Asia and probably other locations around the world as well. Europe seems to have finally woken up to the need for more energy storage so that seems like a good place to start.
In any case, given the huge backlog of Megapack orders even if Europe were to "cut off its nose to spite its face" by imposing draconian tariffs on storage at the very time they need to ramp storage as fast as possible to shore up shaky energy systems, Tesla could likely redirect Megapacks to other regions.
petit_bateau
Active Member
I was looking through the whole of the US bill trying to find geographic scope text that was generally applicable, hence my quoted bits. I'm really unsure what the situation is in the bill re support for exported storage that was manufactured in US and would have received subsidy if it were to otherwise have been installed in USA. Maybe one of you could ping your Congrrss person and get a clarification 
Re subsidy warfare, be very clear that this bill is putting the US in the EU's sights for retaliatory action under WTO rules just on the known text on the vehicles side, even before we get to storage which is ambiguous. If the USA chooses to ignore WTO then all the unnecessary and bad consequences are attributable to the US alone. That is precisely why the EU has already started the pre action protocols in this respect.
The EU has many companies who have long been a manufacturer of storage systems, just as USA and China also have. I used to run one so I should know. Whilst I accept that China has been engaged I'm naughty trade practices in this area, if the US wants the EU to be an ally in that dispute then I'm afraid this is not the best approach.
In the meantime it may simply mean that Tesla storage sales primarily skew to US, and that EU market is dominated by other (cheaper) brands. Short term that is not a problem for Tesla in a production constrained world, but longer term it might mean stronger competition gets good footholds than otherwise.
There is a lot of smoke and mirrors going on in storage pricing and I trust very little data at the moment unless it is accompanied by a transparent sales invoice.
Re subsidy warfare, be very clear that this bill is putting the US in the EU's sights for retaliatory action under WTO rules just on the known text on the vehicles side, even before we get to storage which is ambiguous. If the USA chooses to ignore WTO then all the unnecessary and bad consequences are attributable to the US alone. That is precisely why the EU has already started the pre action protocols in this respect.
The EU has many companies who have long been a manufacturer of storage systems, just as USA and China also have. I used to run one so I should know. Whilst I accept that China has been engaged I'm naughty trade practices in this area, if the US wants the EU to be an ally in that dispute then I'm afraid this is not the best approach.
In the meantime it may simply mean that Tesla storage sales primarily skew to US, and that EU market is dominated by other (cheaper) brands. Short term that is not a problem for Tesla in a production constrained world, but longer term it might mean stronger competition gets good footholds than otherwise.
There is a lot of smoke and mirrors going on in storage pricing and I trust very little data at the moment unless it is accompanied by a transparent sales invoice.
While not too many people qualify as I read the legislation the beneficiary must be a US taxpayer and the product must be placed in service in the US. There is no indication anywhere that the US taxpayer must be a US resident. This may seem arcane, but there are many Tesla buyers in the US who place the product in service in the US but are not US residents. How many I do not know, although I am one and there are many like me, including some US Tesla buyers also. Clearly people in that situation are very likely to have good tax attorneys.
Several past tax benefits have accrued to property, including Teslas, charging stations and renewable installations for people in that situation which whose situations I am aware. My own have been beneficial.
This newly leased industrial space in San Antonio is about the size of Lathrop - Megapacks Texas? Or parts warehouse for Giga Austin?
Tesla leasing San Antonio industrial site on Far Eastside
Elon Musk's Tesla is reportedly leasing an over 400,000-square-foot space in San Antonio, making it the largest new property tenant of the region for Q3.
www.mysanantonio.com
Doggydogworld
Active Member
Probably a warehouse for parts coming up I-35 from Mexico (Tesla has their own lane at the border station). The least congested route to GF Austin is 35 to 410 to 10 to 130. This property is directly on that route, one mile off I-10.This newly leased industrial space in San Antonio is about the size of Lathrop - Megapacks Texas? Or parts warehouse for Giga Austin?
Tesla leasing San Antonio industrial site on Far Eastside
Elon Musk's Tesla is reportedly leasing an over 400,000-square-foot space in San Antonio, making it the largest new property tenant of the region for Q3.
Yup, that makes the most sense. But the most fun would be a Megapack or Semi production facility.
The Advanced Manufacturing Production Credit is in a separate section and the credit appears to be based on production -- not sales -- in the U.S.. I don't see any limitation based on the geography of the ultimate purchaser or any requirement that the ultimate purchaser has to be based in the U.S. or a U.S. taxpayer. I don't see any reason that a domestic sale requirement would be imported from other tax credits created by separate sections of the IRA.
I also did a Google search and looked at about half a dozen law firm write-ups, none of which suggested that the credit was limited to domestic sales (to be fair, none of them explicitly discussed production for export either.)
There will be regulations and guidance issued and I suppose some domestic sale limitation could be introduced through that route but it seems inconsistent with the language and intent of this section of the IRA. So without more information it seems likely to me that the Advanced Manufacturing Production Credit will not be limited to domestic sales or sales to US taxpayers.
If the IRA does result in a "subsidy war" with Europe Tesla Energy is likely to be a huge beneficiary as Tesla will likely be able to rapidly build a Megapack production plant in Europe, building (and improving) on what it learns in Lathrop.
