Poll: Tesla US EV Federal Tax Credit ends Q1 or Q2 ???

[TaoJones]

Full-blown unfettered tax credit-eligible domestic production for 2 full quarters would be a beautiful thing. In a perfect world.

May require some patience on the part of our international brethren, but this at least is a one-time thing.

 

[insaneoctane]

Tesla will do this right. I'm sure there are some Canadians that would be more than happy to help Tesla find a home for any 3's that would put American's deliveries over 199,999 in Q1.....

 

[kengchang]

It's gonna be Q2

 

[gregincal]

It's gonna be Q2

Yep, definitely. They'd need to average about 2000 Model 3's per week in Q1 to reach 200,000 and now they are only planning on getting to 2,500 per week by the end of the quarter. They don't need to play any tricks to keep under 200K in Q1.

 

[Chris Clark]

Yep, definitely. They'd need to average about 2000 Model 3's per week in Q1 to reach 200,000 and now they are only planning on getting to 2,500 per week by the end of the quarter. They don't need to play any tricks to keep under 200K in Q1.

Yup they also stated that they will reduce Model S and X production by 10% as stated here

Tesla says Model 3 production rate at ‘over 1,000 per week’ and breaks quarterly delivery record with 29,870 vehicles


gregincal would you please show your math for how you got to the conclusion that they would need to average about 2000 Model 3 per week to get to 200k?

 

[jddssc121]

I think there is a 50/50 chance of the federal tax credit phase out starting in Q1

Literally impossible

 

[Big-T]

So to be clear, if they deliver their 200,000th vehicle in the USA sometime in Q2 as projected just now, as long as you take your delivery by the end of Q3 you will have access to the full $7,500 credit - correct?

 

[gregincal]

So to be clear, if they deliver their 200,000th vehicle in the USA sometime in Q2 as projected just now, as long as you take your delivery by the end of Q3 you will have access to the full $7,500 credit - correct?

Correct.

 

[gregincal]

gregincal would you please show your math for how you got to the conclusion that they would need to average about 2000 Model 3 per week to get to 200k?

They need about 40K in US sales in Q1 to beat 200K. They sold about 14K Model S/X in the US last quarter, and they are unlikely to sell more than that this quarter, so they need more than 26K Model 3 sales in 13 weeks.

 

[Troy]

Hi. I was the person writing about 50/50. That's not the case anymore.

I'm calculating 162,967 S/X/3 at the end of 2017. The count starts on 1st Jan 2010. My guess is, Tesla sold 590 Roadsters after this date in the USA. So, the total with the Roadster is 163,557. If you check out insideevs, it shows 159,671 for the S/X/3. With the 590 Roadsters, that's 160,261. I expect 13,100 S/X deliveries in Q1 in the US and 19,928 Model 3 deliveries. Based on my calculation, Tesla will hit 200K on April 6th, 2018. Based on my interpretation of insideevs' numbers, the date is April 15th, 2018. Therefore Q2 is very likely. I'm going to cautiously assume 80% likely. Here is the latest situation:

Pessimistic Scenario (20% likely) (If Tesla delivers more than 23,300 Model 3's in Q1 2018)

• $7,500 for deliveries until Jun 30, 2018
• $3,750 for deliveries until Dec 31, 2018
• $1,875 for deliveries until Jun 30, 2019

Optimistic Scenario (80% likely) (If Tesla delivers less than 23,300 Model 3's in Q1 2018)

• $7,500 for deliveries until Sep 30, 2018
• $3,750 for deliveries until Mar 31, 2019
• $1,875 for deliveries until Sep 30, 2019

 

[kalikgod]

Hi. I was the person writing about 50/50. That's not the case anymore.

I'm calculating 162,967 S/X/3 at the end of 2017. The count starts on 1st Jan 2010. My guess is, Tesla sold 590 Roadsters after this date in the USA. So, the total with the Roadster is 163,557. If you check out insideevs, it shows 159,671 for the S/X/3. With the 590 Roadsters, that's 160,261. I expect 13,100 S/X deliveries in Q1 in the US and 19,928 Model 3 deliveries. Based on my calculation, Tesla will hit 200K on April 6th, 2018. Based on my interpretation of insideevs' numbers, the date is April 15th, 2018. Therefore Q2 is very likely. I'm going to cautiously assume 80% likely. Here is the latest situation:

Pessimistic Scenario (20% likely) (If Tesla delivers more than 23,300 Model 3's in Q1 2018)

• $7,500 for deliveries until Jun 30, 2018
• $3,750 for deliveries until Dec 31, 2018
• $1,875 for deliveries until Jun 30, 2019

Optimistic Scenario (80% likely) (If Tesla delivers less than 23,300 Model 3's in Q1 2018)

• $7,500 for deliveries until Sep 30, 2018
• $3,750 for deliveries until Mar 31, 2019
• $1,875 for deliveries until Sep 30, 2019

I agree with your sales estimates after seeing the numbers last night.

I would change the probabilities to:

Pessimistic Scenario (5% likely): This is the slowest selling quarter historically, no effect to 3, but it does for S and X.
Optimistic Scenario (90% likely): April definitely seems to be the odds on favorite for hitting 200k.
Ultra Pessimistic Scenario (5% likely): Tesla finds another major production/supply hang up and can’t get 3s in steady production (as opposed to bursts), and 200k drags to Q3 with some delivery gymnastics (July 1 deferrals and international overload).

 

[ItsNotAboutTheMoney]

Correct.

Possibly not correct. The quarter in which you _acquire_ the vehicle determines what "phase" you are in, where acquired means that the title has been passed to you under state law. I assume that title passes only on the issue date of the new title.

Internal Revenue Bulletin: 2009-48 | Internal Revenue Service

The new qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period. After December 31, 2009, a vehicle that qualifies for a credit under § 30 does not qualify for the credit under § 30D.

...

.07 Acquired. A vehicle is not “acquired” before the date on which title to that vehicle passes under state law.

(My emphases)

Note that for claiming the tax credit, putting the vehicle into service determines the tax year for which you claim, but you cannot claim until you have acquired the vehicle. E.g you took delivery 12/31/2017, but there is a screw-up with the title application process and a title will not be issued until 4/18/2018. If the state doesn't consider the title passed until the title is issued, the delay would mean you'd have to file taxes without the credit, and then file an amended return.

 

[Moderatefan]

Optimistic Scenario (80% likely) (If Tesla delivers less than 23,300 Model 3's in Q1 2018)

I don't agree this is an optimistic scenario, but it does help more people to get $7.5K credit. For those, who would get their car by Q2 end anyway, any unnecessary delay is a pessimistic scenario, i.e. optimistic would be 60K M3s in Q1.

 

[mongo]

Possibly not correct. The quarter in which you _acquire_ the vehicle determines what "phase" you are in, where acquired means that the title has been passed to you under state law. I assume that title passes only on the issue date of the new title.

Internal Revenue Bulletin: 2009-48 | Internal Revenue Service



(My emphases)

Note that for claiming the tax credit, putting the vehicle into service determines the tax year for which you claim, but you cannot claim until you have acquired the vehicle. E.g you took delivery 12/31/2017, but there is a screw-up with the title application process and a title will not be issued until 4/18/2018. If the state doesn't consider the title passed until the title is issued, the delay would mean you'd have to file taxes without the credit, and then file an amended return.

Regardless of when paperwork is finally processed by the state, the vehicle is acquired/ placed in service when you take delivery. You could file for the credit normally in your scenario since the form only requires the vehicle info/ VIN, PIS date, and no further corroborating paperwork.

 

[Dr. J]

Possibly not correct. The quarter in which you _acquire_ the vehicle determines what "phase" you are in, where acquired means that the title has been passed to you under state law. I assume that title passes only on the issue date of the new title.

Internal Revenue Bulletin: 2009-48 | Internal Revenue Service



(My emphases)

Note that for claiming the tax credit, putting the vehicle into service determines the tax year for which you claim, but you cannot claim until you have acquired the vehicle. E.g you took delivery 12/31/2017, but there is a screw-up with the title application process and a title will not be issued until 4/18/2018. If the state doesn't consider the title passed until the title is issued, the delay would mean you'd have to file taxes without the credit, and then file an amended return.

Doesn't title to a new car pass to the buyer at delivery? I don't think even a paperwork screw up would delay the legal transfer of title. But I'm no lawyer...

 

[ItsNotAboutTheMoney]

Regardless of when paperwork is finally processed by the state, the vehicle is acquired/ placed in service when you take delivery. You could file for the credit normally in your scenario since the form only requires the vehicle info/ VIN, PIS date, and no further corroborating paperwork.

Yes, you could. But you're not actually entitled to file unless you've acquired it (as recognized by your state) _and_ have placed it in service. It's the date acquired, not date placed in service that determines the maximum credit. The date placed in service sets the tax year, which is why it would be particularly relevant on your tax form. The rest is just on trust.

IANAL. IANACPA.

 

[wdolson]

Unless Congress gets rid of it, there is a 0% chance it will run out entirely in 2018. I think you meant to ask when Tesla will hit 200K domestic sales and the incentive taper begins. I think it will likely happen in Q2, but they may be able to delay it until Q3.

 

[mongo]

Yes, you could. But you're not actually entitled to file unless you've acquired it (as recognized by your state) _and_ have placed it in service. It's the date acquired, not date placed in service that determines the maximum credit. The date placed in service sets the tax year, which is why it would be particularly relevant on your tax form. The rest is just on trust.

IANAL. IANACPA.

IRS Form 8936:

3 Enter date vehicle was placed in service (MM/DD/YYYY)

IRS i8936: related to purchase vs in service date

If you purchased a vehicle and its certification was withdrawn
on or after the date of purchase, you can rely on such
certification even if you had not placed the vehicle in service or
claimed the credit by the date the withdrawal announcement
was published by the IRS. The IRS will not attempt to collect any
understatement of tax liability attributable to reliance on the
certification as long as you purchased the vehicle on or before
the date the IRS published the withdrawal announcement.

I think the only normal case of in service not aligning with purchase regarding EV credits is if the vehicle is purchased for subsequent leasing.
Interesting article?

the Service has often interpreted this provision narrowly, requiring full actual operational use, not merely availability for use, of an asset before it is deemed placed in service.

 

[⚡️ELECTROMAN⚡️]

How many first day reservations were made? Is there any data showing how many reservation holders there are in certain geographical areas?

 

[wdolson]

How many first day reservations were made? Is there any data showing how many reservation holders there are in certain geographical areas?

Tesla knows that information, but I haven't heard any hint any of it was made public.