Tax credit 2023 [The tax credit discussion thread]

[CrazyRabbit]

Does the model y qualify for the full 7500 federal 2023 tax credit, when configured under 80k purchase price?

Lots of caveats in inflation bill:

Here's every electric vehicle that qualifies for the current and upcoming US federal tax credit

As sales of electric vehicles continue to surge, many new and prospective customers have questions about qualifying for federal tax...

electrek.co

• That means you can get your credit up front at the dealer, but these terms may not kick in until 2024
• In order to get the full credit, the EV must be assembled in North America and…
• The majority of battery components need to come from North America and…
• A certain percentage of “critical minerals” must come form North America or countries with free trade agreements with the US

Sorry if this has been asked before.

 

[acpd]

No one knows for sure. IRS will provide guidance later in the year. Until than it's all guessing game.

Although it is likely MY will qualify or atleast one of the versions. But we won't know for atleast 2-3 months.

 

[Imurgodak]

Any update or insight on this topic? Our scheduled delivery (Y-LR) is now December 2023. To qualify would the delivery need to be Jan ‘23?!

 

[tenvyll]

Any update or insight on this topic? Our scheduled delivery (Y-LR) is now December 2023. To qualify would the delivery need to be Jan ‘23?!

Yes, delivery would have to be after the tax credits go into affect and that is Jan 1st 2023. If it delivers Dec 31st, sorry. Have to see how much Tesla cracks down on putting orders on hold or rejecting orders the closer we get to December.

 

[ElectricIAC]

Prob just 3750.

 

[arbitrage000]

Yes, delivery would have to be after the tax credits go into affect and that is Jan 1st 2023. If it delivers Dec 31st, sorry. Have to see how much Tesla cracks down on putting orders on hold or rejecting orders the closer we get to December.

Looks like Tesla is cracking down....

Tesla updates vehicle unmatching policy to prevent long order holds

Tesla has updated one of its policies that could see your order being cancelled if you don't follow the rules carefully.

driveteslacanada.ca

 

[kithytom]

where is the copy of the email mentioned in the article?

 

[pepperoni]

Looks like Tesla is cracking down....

Tesla updates vehicle unmatching policy to prevent long order holds

Tesla has updated one of its policies that could see your order being cancelled if you don't follow the rules carefully.

driveteslacanada.ca

That’s a policy that actually makes sense. A year ago during the anticipation of the BBB tax credit, Tesla was cancelling customer orders who placed their vehicles on hold 90 days after the reservation, even if it was before the original window of their order. Sometimes, customers legitimately can’t accept a car that shows up months before the original estimated delivery date.

 

[vickh]

So now the question is how this will impact price:

Musk says Tesla expects to meet Inflation Reduction Act requirements for new tax credits on EVs

To be eligible for the credit, the car's battery must meet a minimum threshold of parts sourced from the U.S. or a select set of countries.

www.cnbc.com

 

[acpd]

Keep in mind Tesla will still have many customers who don't qualify for Tax credit due to income limit. So this going to be a balancing act.

Plus individual can only get 1 tax credit every 3 years.

 

[randmness]

So now the question is how this will impact price:

Musk says Tesla expects to meet Inflation Reduction Act requirements for new tax credits on EVs

To be eligible for the credit, the car's battery must meet a minimum threshold of parts sourced from the U.S. or a select set of countries.

www.cnbc.com

I imagine most companies plan to make changes to meet eligibility criteria (for example, Hyundai recently announced a US factory for their GMP vehicles), but I wonder if his statement means starting January 1, vehicles will meet all criteria, or that it is a work-in-progress?

From the same article (Kirkhorn is CFO):

Kirkhorn added that it would also result in “scaling the battery supply chain at large in the United States,” though he said the eligibility criteria for the credit won’t be fully clear until the Treasury Department publishes guidance, likely by the end of the year

 

[vickh]

Keep in mind Tesla will still have many customers who don't qualify for Tax credit due to income limit. So this going to be a balancing act.

Plus individual can only get 1 tax credit every 3 years.

yeah I'm under the income limit (poor wife ) but want to make sure 3 or Y qualify for full credit.

 

[AndrewZ]

yeah I'm under the income limit (poor wife ) but want to make sure 3 or Y qualify for full credit.

We won't know what it looks like until the treasury provides guidance, Elon's vague forward-looking statements (which are protected in earnings calls) really say nothing about what it'll do for consumers.

I think CNBC is posting articles like that so people become perturbed with Elon when this doesn't live up to his high-level commentary.

We already know the S and X won't qualify, and even an obvious point like that was not mentioned. This legislation is so complex and full of nuance to consider, like how many vehicles can even be produced right now that will qualify for the full $7500 with the raw materials being sourced domestically or from countries with trade agreements.

 

[randmness]

We won't know what it looks like until the treasury provides guidance, Elon's vague forward-looking statements (which are protected in earnings calls) really say nothing about what it'll do for consumers.

Yea, I wonder if we'll see a scenario where some early 2023 models dont qualify for some/all of the credit (like the RWD3), and some production changes happen throughout the year(s) to make it eligible (similar to what happened with the 2022/3 ID4.) I guess we should know by year's end.

 

[AndrewZ]

Yea, I wonder if we'll see a scenario where some early 2023 models dont qualify for some/all of the credit (like the RWD3), and some production changes happen throughout the year(s) to make it eligible (similar to what happened with the 2022/3 ID4.) I guess we should know by year's end.

I‘m thinking about it this way as well: we have a finite amount of raw minerals etc that can currently be sourced domestically or from friendly countries, and the initial requirement is 40% of the value in 2023. Companies will be doing everything they can to get those raw materials here and divvy them up among production to hit that 40% requirement on as many vehicles as possible. And suppliers of these domestic/friendly raw materials will have big pricing power.

Although we don’t know what the numbers will look like, I seriously doubt there will be enough raw material to cover all domestic sales with both portions of the credit.

 

[ucmndd]

So now the question is how this will impact price:

I think this gives them the cover necessary to leave prices at their current astronomically high levels and let the government do the discounting.

I certainly don’t expect any decrease.

 

[AndrewZ]

I think this gives them the cover necessary to leave prices at their current astronomically high levels and let the government do the discounting.

I certainly don’t expect any decrease.

Until the Treasury provides guidance following the IRS' request for comments about these things, we don't even know for sure if the Model Y will be slotted under the $80k Truck/Van/SUV limit or whether it will be held to the $55k "Other" category -- I personally would not be surprised to see the latter.

This legislation is called the Inflation Reduction Act. Vehicles are a big piece of inflation right now, EVs are the transportation of the future, and Tesla's prices have inflated ridiculously over the last couple years. I don't think they're going to use taxpayer money to subsidize luxury-priced small SUVs, and I think holding vehicles to appropriate limits is what will mostly drive the reduction of inflation.

For Tesla the company, manufacturing credits included in the legislation would allow them to cut prices while limiting damage to the bottom line and profitability.



But I will not be at all shocked if only the Model 3 RWD qualifies and to maybe see them open up the LR orders again at just below $55k

 

[acpd]

Until the Treasury provides guidance following the IRS' request for comments about these things, we don't even know for sure if the Model Y will be slotted under the $80k Truck/Van/SUV limit or whether it will be held to the $55k "Other" category -- I personally would not be surprised to see the latter.

This legislation is called the Inflation Reduction Act. Vehicles are a big piece of inflation right now, EVs are the transportation of the future, and Tesla's prices have inflated ridiculously over the last couple years. I don't think they're going to use taxpayer money to subsidize luxury-priced small SUVs, and I think holding vehicles to appropriate limits is what will mostly drive the reduction of inflation.

For Tesla the company, manufacturing credits included in the legislation would allow them to cut prices while limiting damage to the bottom line and profitability.



But I will not be at all shocked if only the Model 3 RWD qualifies and to maybe see them open up the LR orders again at just below $55k

Tesla might come up with cheap version of MY to qualify pricing requirements(<$55k) with upgrades via app.

 

[randmness]

Tesla might come up with cheap version of MY to qualify pricing requirements(<$55k) with upgrades via app.

Yea, I think we will likely see the return of the SR AWD Y. It seems like they have been stacking the battery packs.

 

[ElectricIAC]

Yea, I think we will likely see the return of the SR AWD Y. It seems like they have been stacking the battery packs.

Hopefully this is the case.