Try again. Q3 cannot possibly be $3750. Since Tesla did not hit the 200k in Q1, then even if they hit it on the first day of Q2 (which they didn't), the credit will still be available in full for Q3.
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dhanson865
Well-Known Member
Not even close. The title of the thread is about hitting 200,000 in Q1 vs Q2. We finished Q1 37 days ago on March 31 and hadn't hit 200,000 yet.
To top that the post somehow said there was a 50% chance of Q1 and a 100% chance by Q2.
Now the big discussion from anyone that has a clue is will it hit 200,000 in Q2 or Q3?
I'm firmly in the Q3 camp. As in Mon July 2nd Tesla will announce the 200,000 triggered in Q3 and full credit will extend until Mon Dec 31 2018.
So to rephrase the post you quoted we'd have to go for
"There is a 0% chance of the federal tax credit phase out starting in Q1 2018, and 10% chance of it starting in Q2, with a much more likely 90% chance it will be delayed to Q3 2018.
So good news is full credit is available through September 2018, and a possibility it will extend to the end of December 2018."
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Yes there are ways to stockpile cars in the US, but stockholders will not be happy unless they are delivered
Short sighted shareholders will be unhappy to see Q2 profits lower. Everyone who is still a stockholder at the end of Q3 will be elated. Delaying the 200Kth delivery until the first few days of Q3 would buy them a lot of good publicity. It will also mean Tesla buyers will get the most benefit from the incentive because close to 300K buyers will get the full credit if they really ramp Model 3 production in the second half of 2018, and even more will get the benefit during the phase out. GM will almost certainly hit the limit 2nd, probably later this year and they probably will see little increase in sales during the phase out.
The incentive did exactly what it was supposed to do for Tesla, it allowed them to get their models established in the market and then the incentive phases out right about the time their cars can stand on their own without the incentive. Most of the rest of the industry frittered away the incentive and didn't make as much progress towards establishing their EVs as a viable product without incentives.
TT97
Active Member
That is the problem with the rebate program the way it is written. While Tesla and GM are about to run out of the incentive, other manufacturers have barely put a dent in theirs. With all these manufacturers just getting into the game, they will have a $7500 advantage over Tesla and GM for years until they get to 200k or the incentive is stopped.
jelloslug
Active Member
TT97
Active Member
I don’t think there is a hard sunset as of now (of course, it can always be changed by Congress).
dhanson865
Well-Known Member
This thread's poll Q1 vs Q2 ended up 91.6% for Q2 vs 8.4% for Q1.
Poll: Tesla US 200,000th sale in Q2 or Q3 ??? has a newer poll and is running about 70% Q3 vs 30% Q2.
@FlatSix911 might disagree but the consensus is Q3. I suppose we'll know who's right in 2 months.
JBare
Member
No sunset as of today but It's hard to believe this administration will want foreign manufacturers to get over on the American manufacturers. Maybe if Ford gets serious it stays the way it is, otherwise I have to assume sometime next year they'll just eliminate it altogether (or modify to remove number of cars delivered for a set date)
Actually I don't think it will hurt Tesla that badly. These sorts of programs are set up to give an artificial price advantage to emerging technologies to allow them to get established and reach a price point that is closer to on par with the existing tech. The key problem everyone recognized when the program was established was batteries were a lot more expensive than ICE drive trains and so the incentive was to artificially tilt the playing field a bit towards EVs until manufacturers could reduce the cost of batteries to a point where an EV could compete close to an ICE in price.
Tesla did that. They used the time and price advantage the incentive gave them to build the GigaFactory and bring cell prices down to the lowest point ever seen. Now they are sitting on EV gold, they have a factory poised to produce batteries at a much lower price than their competition will be capable of for at least a few years. By the time the rest of the industry is to GF cell prices, Tesla will be making them even cheaper.
When the incentive goes away for Tesla, they could probably do something to effectively reduce the price of their cars (maybe by making current optional features standard, or an actual price cut) which would still leave them with a decent profit per car (though maybe a little reduced), but they probably won't have any serious problems selling their cars without incentive. Without incentive the cost of ownership of the Model 3 is lower than comparable ICE.
GM on the other hand is going to be hurting. They negotiated a sweet deal with LG on batteries for the Bolt, but that's still a limited quantity. They can't produce more than about 50K Bolts a year. LG is taking a loss on Bolt batteries, but they are doing it to learn how to make cars. I expect LG to be a competitor in a few years.
GM will have a hard time moving PHEVs and EVs without the incentive because they didn't figure out how to sell them without the incentive.
I expect GM and other car makers close to losing their incentive to go to Congress asking for some kind of extension. Either that or something from the feds that stops CARB states from mandating the sale of EVs. Though it's likely at least one house of Congress will be in Democrats hands next year and Nancy Pelosi's district has Tesla workers living in it. Congress forcing CARB states to quit requiring EV sales is probably dead in the water, though a new incentive might happen.
If the incentive is allowed to expire, Tesla will do fine. They have been planning to work in an incentive free environment all along and Elon has said he would prefer it (he thinks carbon should be taxed instead). Other car companies will struggle without the incentive though because they haven't figured out how to make compelling cars consumers would want without the incentive.
Congress tried to kill the whole thing as part of the tax bill, but that gambit failed when the auto industry squawked.
FlatSix911
Porsche 918 Hybrid
I do not think so at all, Elon wants to make 5000 model 3 a week at the end of Q2, and he clearly wants to massively produce Model 3 to get market share before other big player starting delivery their electronic car.
You are right, I am one quarter off, Tesla will reach 200,000 sales in the US in Q2, Q3 still have the full amount, The tax credit for Q4, Q1/2019 will be reduced to $3750 for sure. For Q3, Q4 2019, the tax credit will be $1875, after that, no tax credit.
The phase out is triggered by selling the car, not building the car. There is no conflict in your statement.
voip-ninja
Give me some sugar baby
You don't understand the tax credit quite as well as you think you do. Tesla can build as many as they want, all that matters for the purpose of the tax credit is US deliveries, which Tesla CAN manipulate without slowing their production rate, if they choose to. They can also choose to stock pile cars for a few weeks before delivering in order to manipulate the numbers so that 200K car delivery occurs on July 1st.
Related, in the Q1'18 Update Letter they even stated "[w]e are planning to deploy significantly more Model 3 vehicles in our stores in Q2 this
year." More Model 3's in stores means they are not delivered and counting against the 200k limit.
year." More Model 3's in stores means they are not delivered and counting against the 200k limit.
I was at the Portland service center/store today and was surprised there were about 6 Model 3s on display. Some may be waiting for delivery, but they were showing off at least one of them to a prospective buyer.
Another thing they can do would be to fill out loaner fleets with Model 3s. I expect most loaners will be Model 3s within a year.
DR61
Member
I know that just within the last couple of weeks, the Seattle showroom got a Model 3. The Bellevue one has had a Model 3 for a few months now. So I wouldn't be surprised if this is another way to use production cars without breaking the 200k mark. Plus loaners. Would be great if Tesla could always have a Tesla available for loaner instead of renting an ICE.
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