Tax Credit and Model Y delivery

[arbitrage000]

You really think that backlog is going to hold up? I suspect at least 50% if not more of those orders will disappear between now and January. There is NO reason to take a delivery now if you can get $7,500 come January. I think we're already seeing it with the Performance. I had to wait 18 days from order to matching with a VIN even though I was estimated for mid Sep to mid Oct. A bunch of other people also suddenly started matching. Someone claims they ordered and matched the next day. I fully suspect we will see inventory vehicles before the end of the year.

I'm not sure how much of an affect it will have on the waitlist of orders. If it does it will be very short lived and a big backlog come 2023.
There are a lot of outstanding order from as far back as Aug 2021 for MYLR. MYLR orders are currently being fulfilled mostly for Oct/Nov/Dec/Jan orders. Any base MYLR from Feb onward already has an EDD into 2023. Any optioned MYLR order from ~Apr/May onward already has an EDD into 2023.
Tesla isn't letting people hold an order for more than 30 days. The orders before the two March and subsequent June price increases will have the price increase eat into any $7500 credit if they were to cancel and reorder. If you ordered before the March increases the new car price has gone up $6K for a MYP and $7K for MYLR. Don't think any of those people will postpone and get caught in the 2023 backlog to save $500-$1500 considering other things like trade-in values declining and interest rates increasing.

It certainly could slow down MYP orders with their much quicker turnaround. But even though your order and a few other MYP orders got fulfilled so quickly there are still lots of people with orders as far back as April (even a few March stragglers) that are still waiting for MYP orders to be delivered. I'm not sure what is going on with these quick turnaround July orders but if you read through the couple active MYP delivery threads there are lots of people still waiting for older orders. Doesn't seem like there is now a situation of over supply.

I'd be really surprised if we see inventory orders by end of year. Lots of Canadian orders to go through, plus all of the above, plus people who don't qualify for the credit.

It will be interesting to watch it play out.

 

[robert10e]

A friend of mine is thinking about placing an order for the MYLR now or wait until January.

He is trying to figure out if he qualifies for this $7k tax credit because he has two jobs where he pulls in at least $255k with both jobs combined. Can someone help answer that question because I don't want to give him the wrong answer. Figure there are some smart people here that fully understand the bill they are about to pass.

Under the current Inflation Reduction Act, one would have make less then 150k ( filing single) and under 300k ( filing married)

 

[Happy Hippo]

If this bill passes, when will the point of sale on the delivery purchase happen? I am seeing conflicting reports one video says 2024!! And others are saying 2023?!

 

[Happy Hippo]

I wonder if adding FSD after will legally void the tax credit. I bet it's an unintended loophole that might change.

Are you going to chance it? I would get the car without it and then pay what ever it would be if you really want FSD.

 

[Bluelocust]

If this bill passes, when will the point of sale on the delivery purchase happen? I am seeing conflicting reports one video says 2024!! And others are saying 2023?!

It is my understanding the credit applies for vehicles purchased beginning January 1, 2023.

 

[Happy Hippo]

It is my understanding the credit applies for vehicles purchased beginning January 1, 2023.

I guess we will know once it is passed versus all these speculations. lol I have to see if it makes sense to push out 1 30 days for January 2023 delivery and that is if it does not slip again.. who knows!

 

[RoBoRaT]

Vegas this is a point of sale rebate. This is different than the last Federal credit. This one is a rebate not a credit . Everyone who purchases a qualified EV will receive this rebate at the sales table on delivery day.

@VegasMYP

As of the Senate version, this is still a Federal Credit and non-refundable credit.

Although the credit is deducted by the dealer at point of sale - Uncle Sam recaptures any excess payment at income tax return filing.

Watch Rob Mauer explain and clarify TLDR at 10:54:

And the follow up video at 3:30:

 

[FFCars]

My dilemma is I would like to purchase a Tesla because I believe they manufacture the best electric vehicle (especially their software). I am not “gaming” the system – I am just following their ordering procedure. I look at the EDD on the screen and it says Jan-Apr 2023 for a possible delivery date. I realize that the date may be earlier or later depending on Tesla’s ability to produce the desired model. That happens to work for me. Do I wait until after January to order? Maybe. But I choose to order now and see what happens. If necessary, I will use the 30 days they allow. Personally, I would like to have a M3 but the wife feels differently – and has a number of reasonable points to justify her position (game over). But with the rebate, we can afford the MY. Without it, we will probably purchase the M3 – which by the way still cost $4,000 less than our configured MY with the credit.

I do appreciate everyone’s thoughts and opinions!

The M3 LR doesn’t qualify for any tax credit. The MSRP is too high.

 

[FFCars]

While that may be true, if your income (adjusted) is over the limit then I assume you will need to pay the Fed back the $7,500 at tax time?

Yes

 

[MODEVIL]

I would assume the price increases in 2022 make my January order about break even with tax credit. Need to do the math but the wait time also factors in.

 

[FFCars]

Does anyone else think it’s funny that buyers think the EDD means something? My EDD was December, yet I took delivery last Sunday (4 months early).

Tesla gives people an EDD because they try to under promise, but over deliver. It’s just great customer service to deliver your tech toy early. Normally, we all want the latest tech toy NOW. Not in several months. The only difference here is the tax credit.

Most of us won’t even qualify. And only the M3SR, MYSR, MYLR, MYP qualify. I wish they would lower the M3LR so it would become affordable to more people. I have retired friends who could use a M3LR for about $48k.

 

[FFCars]

I would assume the price increases in 2022 make my January order about break even with tax credit. Need to do the math but the wait time also factors in.

Exactly. Plus, if you have a trade, you’ll get a lot more now. Used Tesla’s could suffer from a tax break.

 

[arbitrage000]

I would assume the price increases in 2022 make my January order about break even with tax credit. Need to do the math but the wait time also factors in.

Yes. As per my post earlier, any order placed before the March price increases for a MYLR has already seen the price increase by $7000. There doesn't seem to be any reason to delay and have to reorder for a tax credit if you ordered before March. And if Tesla raises prices again before Jan 1st then you would be losing money. There is also the risk of any trade-in decreasing in value from now till Jan (very high chance of this) and any increase in interest rate.

 

[wiparker824]

Can't wait to see the creative solutions Tesla (and every other manufacturer) comes up with to fall into whatever final parameters end up in the bill

Yep. It’s why people getting worked up about this car or that car not qualifying at this point is silly. They’re just going to make things be premium add-ons you can choose to add later for those that want the rebate, or at checkout if you don’t qualify or care about the tax rebate. And all these manufacturers will get a base car out exactly at the MSRP needed magically. What I’d expect in particular for a car like the M3LR. Install all the same hardware and just lock features that they know almost everyone will buy at software level for upgrade later.

 

[Jcmiii3]

I was told by Tesla store rep yesterday that you can delay until your original EDD, even if it’s more than 30 days. I don’t know if it’s true or not.

This will possibly be a major headache for them in q4. I guess they can shift to other models that don’t qualify for ftc or else export more to Canada or other countries.

I’m considering placing a MY order assuming price will continue to rise. Do we even know if it’s actually an suv according to the irs?

The Model Y is definitely classed as an SUV.

 

[Jcmiii3]

Nobody even knows whether or what vehicles will qualify under the tax bill, the Congressional Budget Office estimated there would only be a max of around 11,000 vehicle sales claiming the tax in 2023.

Source: U.S. Congress office sees few tax breaks for EVs under Democratic plan

The raw mineral sourcing and assembly requirements are quite onerous to start and gradually build up in severity with each year, the whole intent is to move us away from dependence on China for the EV supply chain particularly in battery minerals and manufacturing. China controls dang near the entire supply chain right now.

The 11,000 vehicle number is in the sourced article, but the article is based on old information as it goes on to say, "Automakers and their home states including Michigan are lobbying Senator Joe Manchin to revise proposals that would curtail or eliminate tax subsidies for electric trucks that cost more than $80,000, make households that earn more than $300,000 a year ineligible ...". Both of those caps are included in the bill that passed.

 

[Jcmiii3]

I would assume the price increases in 2022 make my January order about break even with tax credit. Need to do the math but the wait time also factors in.

Not sure we understand what you mean by "my January order". Did you order in January or are you waiting until January 2023 to order? Tesla locks the price of the car on the day you order. So if you ordered last January, then you're locked in. If you want to wait until January, I suggest you order now as you are not likely to get the car before January. The $7500 is based on the date the vehicle is "placed in service", not the day it is ordered. From 21 CFR 1.179-4 - "The term placed in service means the time that property is first placed by the taxpayer in a condition or state of readiness and availability for a specifically assigned function, whether for use in a trade or business, for the production of income, in a tax-exempt activity, or in a personal activity." Given that definition it is the date you take possession of the car.

 

[AndrewZ]

The Model Y is definitely classed as an SUV.

Does it belong in the same grouping as vans and trucks? I think the Model X is closer in terms of size and scale, it seems likely that grouping is more about large vehicles and would probably lean more towards true full-size utility vehicles. $80k is a lot of money in a vehicle the size of a Model Y.

But who knows

 

[bro1999]

The Model Y is definitely classed as an SUV.

It's classified as an SUV by the EPA, but Sec. Pete is the one in charge of finalizing what qualifies as what for EV tax credit purposes.

 

[Bluelocust]

The M3 LR doesn’t qualify for any tax credit. The MSRP is too high.

True. But the MY I have configured cost $11,000 more than the M3 configured somewhat identically (without the premium wheels). The credit lowers the price closer to what I am confortable paying for the vehicle.