so the magic dates are 7/1/2017, 10/1/2017, 1/1/2018, 4/1/2018 (etc?)(beginning of calendar quarters) whenever they hit 200,000 (unless rules get upgraded after the 2016 elections)
{seriously considering an S85 CPO or similar}
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Tax Credit Clarification
- Thread starter SmarterMotors
- Start date
so the magic dates are 7/1/2017, 10/1/2017, 1/1/2018, 4/1/2018 (etc?)(beginning of calendar quarters) whenever they hit 200,000 (unless rules get upgraded after the 2016 elections)
{seriously considering an S85 CPO or similar}
BluestarE3
Active Member
Hi everybody. I have detailed calculations on this topic. The numbers are updated daily. For the latest info, open THIS page and scroll all the way to the right. According to my calculation, Tesla is currently at 88,307 deliveries in the USA and they are expected to reach 200,000 on 31st Oct 2017. The assumption is 100,000 Model 3 deliveries in 2017, based on Elon's statement HERE.
SageBrush
REJECT Fascism
AZ Desert Driver
Rare combination
Wow - you did a LOT of work on this. Best refinement of a SWAG I've seen in a while. I hope you are close to being right.
Congress doesn't change until January 2017. Nothing will be done about any green car benefits in this Congress. If the Democrats gain back both houses in this election, they may take up some legislation to incentivize green cars, but I don't think Tesla is asking for any extensions to the tax break. Elon has said many times there should be punitive taxes levied on fossil fuels and let the market sort out the answers with no incentives.
I don't think anybody is really lobbying to extend the tax credits. I know Tesla hasn't sold the most EVs in the US, but it looks like Tesla will get there first. The car makers would rather deal with a surging Tesla if they still have a tax break they can advertise and Tesla doesn't.
I think the numbers for deliveries are a bit low. I took delivery of a 142xxx Model S in June, and that doesn't count Model X deliveries. I think they are probably somewhere approaching 100,000 in the US at this point.
Elon has made it clear that the production start date they are making suppliers work towards with the Model 3 is July 1, but he does not expect to hit that target. He's gone as far as to say, it will not happen because the process can only move as fast as the slowest part and somebody is going to miss the deadline. I expect the start date for Model 3 production is going to be more around October 2017. With only Model S and X production before then, there is no chance they will hit the threshhold before Q4 2017 at the earliest, and it's much more likely early 2018. Then when the 200,000th car is delivered in the US, the incentive remains for the quarter when it was hit, and then it remains for the next quarter to before being cut in half.
A large percentage of Model 3 buyers don't owe $7500 in federal taxes (SSN taxes don't count), you need a fairly hefty income to owe that much in taxes. For a lot of Model 3 buyers, the $3750 credit will go a long ways towards wiping out their taxes for the year, if not wiping them out entirely.
Hi,
Tesla publishes their quarterly global delivery numbers in shareholder letters. At the end of Q2 2016, they were at 136,652 units. If you want to see the shareholder letters, open THIS page, then in column 8 under "Global" click on the quarterly numbers and a PDF file will open.
It looks like, you are expecting maybe 20-30K Model 3's in 2017, but Elon said 100-200K. Even if they produce only 50K Model 3's in 2017, they will still hit 200K in Q4 2017. So I will stick with Q4 2017 until there is new data that shows less than 50K.
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Plus, I'm willing to bet that the pre-phase-out credit is going to generally go to higher income individuals anyway. That'll just be a side effect of Tesla delivering highly optioned vehicles first.
"Qualified Plug-In Electric Drive Motor Vehicle Credit (IRC 30D) Phase Out
The 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"
the way I read this, if they hit 200,000 on 1/1/2018 (1st day of calandar quarter),
then you have until 6/30/2018 for the full 100% (2nd calendar quarter AFTER calendar quarter when they hit 200,000)
{or if anywhen between Oct 1st, 2017 and 12/31/2017 then the magic date for 100% is until 3/31/2018}
(i could be wrong, but it looks pretty clear to me)
Plug-In Electric Drive Vehicle Credit (IRC 30D)
sorry, it just seems like there is confusion about when, (perhaps less so here.)
apologies may be in order from me
SageBrush
REJECT Fascism
Something of a WAG, household income over $100k is likely to have a federal tax liability of at least $7500. That does not sound like a high bar for a $35-40k car.
True. Plus, as we've been taught here at TMC, the ideal annual income for a $35k car is $1.4 million.
AZ Desert Driver
Rare combination
And if you just pull the price of the car from your IRA, that generates a tax bill of $7500. (assuming you don't pay 10% penalty)
SageBrush
REJECT Fascism
'Bar' was a poor word choice. I meant that I suspect that finding Model 3 owners from salary with federal tax liability under $7500 strikes me as the exception to the rule.
There appear to be some VINs missing from the total then, somewhere in the neighborhood of 12,000 (at the end of Q2 2016 they were around VIN 145K for the Model S and they had Model X deliveries on top of that). In that chart the numbers for the US are estimated and they don't include the Roadster numbers, which are small, but count against the 200K.
I didn't lay it out in quite as much detail, but that's what I thought I said.
There are a lot of people out there stretching their budget to get a Model S. I'm one of them. I may or may not get the entire tax credit. I am making more this year than ever before, but whether I get the whole credit or not is iffy.
The pool of Model 3 reservation holders have a significant number of people who will be stretching their budget to afford the 3. I would bet the majority of Model 3 buyers will owe less than $7500 in federal taxes.
It's difficult to nail down exactly what gross income level owes what in taxes. There are people who make more than $1 million a year and pay virtually no taxes by taking advantage of tax loopholes for the rich, and people who make much more humble incomes who get nailed for taxes. Someone making $100K a year gross income could end up paying more than $7500 a year in federal income taxes, but if they have a large mortgage, a couple of kids, have a large property tax bill, other state and local taxes, business expenses, possibly a loss on an investment, they could see their taxable income shrink dramatically.
Roadster numbers are included. To see it, open the page HERE, scroll horizontally to the middle. After you've passed the grey columns, the third column shows 1,500 units for the Roadster. This is included in the USA running total column at the end.
Not exactly. Tesla published their 2014 and 2015 USA sales numbers HERE on page 1, table 2. Also, in 2012 and 2013, Tesla was selling cars only in the USA and Canada and they have published the total numbers. I'm obsessed with these details so others don't have to. Also, I like Google Sheets.
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SageBrush
REJECT Fascism
Oh, no doubt. I was imagining a four person household including two kids who then might have 4 personal exemptions, 24k in deductions and $2000 in tax credits not including the EV. That works out to about $7500 in fed tax liability starting from 100k income.
More deductions usually means less discretionary income. Single person households have less expenses and have more discretionary money at lower incomes, but they also usually have less tax credits or deductions. So I stand by my prediction that M3 owners buying the car from current salary will overwhelmingly have enough tax liability to hope that the full tax credit is available. Exceptions will certainly exist.
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dgpcolorado
high altitude member
It has been discussed elsewhere here, but the minimum income for a single filer to generate a $7500 tax liability is a bit over $55k and more than $75k for a couple, both using the standard deduction. To me $55k is a huge income; I would have stretch to qualify for the one fourth phase-out tier. My income is miniscule, being retired and thrifty, so my S purchase is coming out of savings, not income, something that is true for many, though certainly not all, retirees.
You may be right that most Model 3 purchasers would qualify for the full $7500 tax credit, but "overwhelmingly"? I doubt that. My impression is that a lot of middle income folks will stretch their budgets to afford the 3 and a $7500+ tax liability is solidly upper middle income or higher.
Just my perspective from the absolute bottom of the income scale here at TMC.
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