Clearly not "everyone" since I missed the tweet/post/article where Tesla said that that was what they did.
No. Why would they?
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It'd sure be nice if there were price drops across the board, even temporary. How about if the credit is eliminated prematurely, Elon gives a $7,500 Model 3 discount to all line waiters who order a Model 3? Elon?
ElecFan
Member
Jacking up or taking down prices would be dumb since not everyone qualifies for the (full) tax credit.
Interesting Responses!
I still feel that Microeconomics trumps Marketing and Emotions. Tesla is not different from other businesses. The idea of tax incentive is to spur the adoption of the product by the consumers and help subsidize the initial expense involved in adoption of new technology. Tesla knows that too. Why would it not want to sell a product at a $7500 higher price when the consumer is going to get benefit of that credit?
What Elon says or does not say is irrelevant?
Just wait and see what happens when SALT deduction is limited to $10,000 per year? and maybe then no one else takes into account the property tax deduction when buying the property? Microeconomics 101
I still feel that Microeconomics trumps Marketing and Emotions. Tesla is not different from other businesses. The idea of tax incentive is to spur the adoption of the product by the consumers and help subsidize the initial expense involved in adoption of new technology. Tesla knows that too. Why would it not want to sell a product at a $7500 higher price when the consumer is going to get benefit of that credit?
What Elon says or does not say is irrelevant?
Just wait and see what happens when SALT deduction is limited to $10,000 per year? and maybe then no one else takes into account the property tax deduction when buying the property? Microeconomics 101
It could be priced in USD and that's why adjusted for currency. If I manufactured in USA, paid my employees in USD, why would I want to take currency risk? Euro has varied from 1.05 USD to 1.20 USD in the past one year.
Yes, of course prices are adjusted for currency (which I already stated), but the prices outside the US are not $7500 cheaper due to the tax credit. You stated that Tesla is charging $7500 more because they know people will receive $7500 in credit.
Tesla does not receive any benefit from the federal tax credit other than helping the buyer finance or incentivise their rationale to purchase.
Zaphod
Galaxy President (former)
SageBrush
REJECT Fascism
Lovely argument. Americans are so islanded they forget that half of Tesla sales are in other countries
What? It's a credit not a deduction. I'd imagine 99% of people who are buying a Tesla (even the 3) probably have a federal tax liability of over $7500. Or maybe you mean that they think it's instantaneous, but at the same time if you can't float the 20% loan payment difference for 15 months (at most) why are you getting a new car?
voip-ninja
Give me some sugar baby
Bingo.
Something like 40% of filers don't pay any federal income taxes anyway, but some of those are likely reservation holders. They probably would get quite the shock when they finally discovered that not only would the car not be $7500 cheaper at time of purchase but that they don't pay enough in taxes to get the full $7500 back anyways.
https://nypost.com/2016/02/24/45-percent-of-americans-pay-no-federal-income-tax/
dgpcolorado
high altitude member
That might be close to true for the S/X but I doubt that it is remotely true for Model 3 buyers. It takes a pretty hefty income to qualify for the full tax credit: ~$58,000+ for single filers with the standard deduction and no extra personal exemptions, ~$75,000 for couples with the standard deduction and no extra personal exemptions (under current tax rules, of course). If the tax credit survives Congress I expect that there at a lot of people who will be surprised that they don't qualify for the full tax credit on their Model 3. Whether they are stretching to afford the 3 on a modest income or just have low incomes and robust savings — as is the case for many retirees — the number of such folks figures to be a LOT higher than 1%!
SageBrush
REJECT Fascism
I can understand the retirees argument for S/X/3 and not qualifying for the full $7500 federal tax credit. However, I think most working people buying a 3 will owe more then $7500 in taxes. I would be hard pressed to believe anyone making under $60k would be in the financial position to buy a $40-60k Model 3. If they were that financially irresponsible then I'm sure they might also try to overreach and get loans for an S/X. Spending beyond means for a car is probably one of the stupidest things people can do with their money. Cars can get damaged and hit by others, they depreciate quickly, and not worth risking to get bankrupt over if someone doesn't have the means. General rule I have heard is never buy a car worth more then 1/3 annual salary.
I did the math for California and I think state income tax of $10,000 would be an income of $136,000. So, most middle class taxpayers wouldn't miss it. I think it will be similar for other high income tax states like NY, NJ, CT, and Mass.
voip-ninja
Give me some sugar baby
Average family income in the US is about $50,000 a year. Average price of a new sedan sold is around $22,000. Someone who thinks they will get a $35,000 base model 3 for $27,500 after a $7500 federal tax credit might very well pay far less than that in federal taxes.
dgpcolorado
high altitude member
If I had a modest income and low savings I'd feel that it was a poor financial decision too. However, I question the assumption by some that everybody lives paycheck to paycheck. Before retiring I never earned an income high enough to qualify for the full tax credit. Nevertheless, toward the end I was saving one third to one half of my (modest) gross income. Yet there are people with incomes of $150k who are barely scraping by. It depends a lot on how thrifty one is, not on how big one's income is.
[I'm sensitive to this point because I got some flak when I mentioned that I am to low income to qualify for more than a tiny speck of the tax credit. The gist of it was amazement that anybody could be foolish enough to drive a Tesla with a low income. Income does not equal wealth.]
SageBrush
REJECT Fascism
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