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Tax Credit Clarification
- Thread starter SmarterMotors
- Start date
melindav
☰ 2018
based on InsideEVs sales tally, thru September looks like 98,077 have been sold in the US. So depends on what S/X deliveries will be in the next year.
K-MTG
Sunshade Captain of TMC
Oh wow, so only the first M3's will get a chance. I just hope they don't prioritize more expensive models (as they did with the X) rather go in order of reservations
They've already said that they will prioritize geography and build level.
melindav
☰ 2018
well, if they meet the same number of deliveries as last quarter (14,956 in the US) for S and X sales going forward, that would be 6+ quarters worth of sales before they hit 200,000.
Being an optimist, I would expect they would be into delivering Model ☰s when they hit 200,000 - and I trust Tesla will time the 200000th to fall at the beginning of a quarter, so a high percentage of the reservations will get the credit in some form or another.
K-MTG
Sunshade Captain of TMC
I did a online launch date reservation as soon as they opened, I am a existing owner and located in California. If I order a baseline Model 3, what are my chances?
Will probably get self driving, leather seats, maybe premium package if it is $2k or so
Will probably get self driving, leather seats, maybe premium package if it is $2k or so
My understanding is that you will probably be early in line. Being a current owner is an automatic bump. California location, bump. Your options, bump. Just make sure you get the biggest battery...
JoeCoolMan24
Member
My problem with the prioritizing is that someone could come along TOMORROW and put down a reservation, and they live in California, and they get every option available, and they would completely jumpfrog over me who lives near Chicago, will only get a couple upgrades, but reserved my car within the first minute the online portal opened, right?
If true, that's what's annoying me, is that with every new person that has a lot of money, they push back MY chance at getting the tax credit, despite them needing it less than I do.
I wish Tesla would have done the prioritizing in BUCKETS (or maybe they are). Line up the 400,000 reservations in order of reservation time, cut those in to 10 groups of 40,000 each, and then within that 40,000, prioritize based on location and price. That way instead of me being bumped from... 20,000th or whatever all the way down to 400,000th, I just drop from 20,000th to 40,000th. Does that make sense?
I just think there should be cut off points from which those of us who can't afford to max out our cars and don't live on the West Coast won't get screwed out of the credit. Anyone clarify?
If true, that's what's annoying me, is that with every new person that has a lot of money, they push back MY chance at getting the tax credit, despite them needing it less than I do.
I wish Tesla would have done the prioritizing in BUCKETS (or maybe they are). Line up the 400,000 reservations in order of reservation time, cut those in to 10 groups of 40,000 each, and then within that 40,000, prioritize based on location and price. That way instead of me being bumped from... 20,000th or whatever all the way down to 400,000th, I just drop from 20,000th to 40,000th. Does that make sense?
I just think there should be cut off points from which those of us who can't afford to max out our cars and don't live on the West Coast won't get screwed out of the credit. Anyone clarify?
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SageBrush
REJECT Fascism
I'm not so different than your position but I am OK with it. It makes sense to keep the first ~ 50k cars close to Tesla's home to iron out the expected kinks, and we all live in a capitalist society where people willing to spend more money are granted priority to goods and services. <<shrug>>
K-MTG
Sunshade Captain of TMC
Will probably go for the small battery though, already have a 90D X and 3 will just be the spare car
Waiting for Tesla to hit 200,000 USA sales before making any calculations is not necessary because according to the rules all you need to do is to guess the quarter they will hit 200K. For example, if Tesla hits 200K in Q1 2018, full credits will end on June 30th, 2018. It doesn't make any difference whether they hit the limit on Jan 1st or March 31st, 2018. The exact date is not important.
It turns out, there are only 2 realistic quarters to consider. Either they will hit 200K at the end of Q4 2017 or at the beginning of Q1 2018. Therefore there are only two possible sets of deadlines:
Pessimistic Scenario
$7,500 for deliveries until Mar 31, 2018
$3,750 for deliveries until Sep 30, 2018
$1,875 for deliveries until Mar 31, 2019
Optimistic Scenario
$7,500 for deliveries until Jun 30, 2018
$3,750 for deliveries until Dec 31, 2018
$1,875 for deliveries until Jun 30, 2019
In the future, for the latest info on this issue, you can open THIS page and scroll all the way to the right.
If you are a Model 3 reservation holder, check out the Model 3 Delivery Estimator. It integrates this information to the output based on your delivery estimate.
It turns out, there are only 2 realistic quarters to consider. Either they will hit 200K at the end of Q4 2017 or at the beginning of Q1 2018. Therefore there are only two possible sets of deadlines:
Pessimistic Scenario
$7,500 for deliveries until Mar 31, 2018
$3,750 for deliveries until Sep 30, 2018
$1,875 for deliveries until Mar 31, 2019
Optimistic Scenario
$7,500 for deliveries until Jun 30, 2018
$3,750 for deliveries until Dec 31, 2018
$1,875 for deliveries until Jun 30, 2019
In the future, for the latest info on this issue, you can open THIS page and scroll all the way to the right.
If you are a Model 3 reservation holder, check out the Model 3 Delivery Estimator. It integrates this information to the output based on your delivery estimate.
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Darryl
ModelXTracker.com Co-Adm
I think people should plan they will not get any tax rebate and then pleasantly surprised if they get one. This is rather than counting on a tax rebate and when they don't get it they are disappointed. There are too many things we have no control over which can effect whether we get a tax credit.
- Trump has already said he plans on getting rid of energy related tax credits and rebates. Where he didn't come out and say the EV Tax Rebate he said energy related. This can't effect cars purchased in 2017 but could effect cars delivered after that.
- Elon has already stated the order cars will be produced is Employee, Current Owners (10% of cars), Highly Optioned(30%). Then West Coast fully optioned. (with the Model X they built P90D with Premier and Autopilot Options. Next was the rest of the P90Ds. The next group was 90D with Premier and Autopilot, then rest of 90D. Then finally all 75. All five seat cars were produced last.
- There is no guarantee Model 3 car production will start in 2017. It could move to early 2018 or later. I believe based on what is being reported it is a 50/50 chance that it will start in 2017.
- No one knows how fast they will ramp. It took them weeks to be able to produce more than 50 Model X's per day. It took them 8 months to get to full production.
- The total number of cars being produced will be a mixture Model X, Model S as well as Model 3s all of which will be eligible for the rebate.
I fully agree with you on all of these points. The other tradeoff is that even if you can get the Model 3 with a tax credit, it will be an early production, and based on the history of the S/X, there will likely be some (but less than previous models) design flaws or manufacturing issues that take a while to work out and result in potentially random defects in the delivered cars.
At this point, without the odds being in favor of a tax credit (especially low odds of a full credit), I am likely going to delay my delivery. I was someone on the edge - knowing that I wanted an EV in the next 5-7 years, I decided to get it a little sooner, because of the tax credit. Now that it seems like it will take a little while longer, I'm likely going to sit tight and wait to see how this all shakes out regarding delivery timelines, tax credit status, cost of upgrades (EAP, battery, audio system), etc. before deciding. The good thing is that if I wait a little bit, I'm likely to get a more mature car, benefit from greater EV infrastructure, and likely continued enhancements to AP, the expected HUD, etc.
From the NY Times today, an interesting piece about the uncertainty in the auto industry. It includes this paragraph about the tax credit.
New York Times said:
Remember the time line phaseout listed in page 1 of this topic. The 200,000 sold in USA, has to be delivered and then the remainder of that quarter and the following quarter continue to receive the full $7,500 tax credit. If Tesla makes the 200,000 delivery just after the beginning of a quarter, there will be that quarter and the following quarter to continue to receive the full tax credit.
"Once Tesla delivers its 200,000th vehicle in the US, then the Phaseout process starts. It does not just end but there is a 15 month phaseout process.
Pre-Phaseout: The CALENDAR QUARTER that the 200,000th vehicle is sold in is entitled to the FULL $7500 tax credit.
Phaseout Part 1: After the end of the Pre-Phaseout Quarter, then the IRS give you ANOTHER CALENDAR QUARTER (3 months) with the FULL $7500 tax credit.
Phaseout Part 2: After the end of Phaseout Part 1, there are TWO QUARTERS (6 months) with a redued 50% tax credit (that is $3,750).
Phaseout Part 3: After the end of Phaseout Part 2, there are TWO MORE QUARTERS (6 months) with a reduce 25% tax credit (that is $1,875)
Then bye bye tax credits. So there is literally 15 months plus the original quarter the 200,000th car is delivered on.... "
"Once Tesla delivers its 200,000th vehicle in the US, then the Phaseout process starts. It does not just end but there is a 15 month phaseout process.
Pre-Phaseout: The CALENDAR QUARTER that the 200,000th vehicle is sold in is entitled to the FULL $7500 tax credit.
Phaseout Part 1: After the end of the Pre-Phaseout Quarter, then the IRS give you ANOTHER CALENDAR QUARTER (3 months) with the FULL $7500 tax credit.
Phaseout Part 2: After the end of Phaseout Part 1, there are TWO QUARTERS (6 months) with a redued 50% tax credit (that is $3,750).
Phaseout Part 3: After the end of Phaseout Part 2, there are TWO MORE QUARTERS (6 months) with a reduce 25% tax credit (that is $1,875)
Then bye bye tax credits. So there is literally 15 months plus the original quarter the 200,000th car is delivered on.... "
OK. I can strongly predict that they will hit 200,000 cars in the fourth quarter of 2017 or the first quarter of 2018.
Assumptions: We know the first Model 3 are going into the US market. About half of Model S and X go to the US market. Tesla produces 25K Model S/X in Q4 2016. Tesla produces about 100K Model S/X in 2017.
Tesla plans to produce 100K Model 3 in 2017. Musk's target was July, but it's very unlikely to have a large number before September. Even if they manage to get 50000 produced in Q3 2017, they're still under the 200K number.
However, if they succeed at 100K Model 3 in 2017, they will definitely be over 200K in the US by the end of Q4 2017.
If they don't, then they probably reach 200K in Q1 2018. Just with S and X they'll be at roughly 150K - 175K by the end of Q1 2018, so even a rather low Model 3 production will get them to 200K. They might be able to tweak this with overseas shipments but only if Model 3 production is going badly.
If something goes horribly wrong with Model 3 then they might reach 200K in Q2 2018. I choose to assume that Model 3 will be producing at least 50K in Q2 2018, because otherwise things have gone horribly wrong.
So scenario 1 (Model 3 volume production by Q4 2017):
Full credit for Q4 2017, Q1 2018; half credit for Q2 2018, Q3 2018; quarter credit for Q4 2018, Q1 2019
Scenario 2 (Model 3 volume production in Q1 2018):
Full credit for Q4 2017, Q1 2018, Q2 2018; half credit for Q3 2018, Q4 2018; quarter credit for Q1 2019, Q2 2019
Scenario 3 (very late Model 3 volume production in Q2 2018):
Full credit for Q4 2017, Q1 2018, Q2 2018, Q3 2018; half credit for Q4 2018, Q1 2019; quarter creidt for Q2 2019, Q3 2019
Now there are already 400K reservations, and Tesla's plan is to have a running rate of 100K per quarter. The first quarter when they achieve this is the quarter which starts the clock ticking. What we *don't* know is how many of the 400K reservations are from the US. Perhaps about half? I'm going to assume that later US reservations will "jump the queue" over earlier non-US reservations, which is pretty much what Tesla said, and would be simple politeness to maximize tax credit availability.
So if you make a reservation now, you can expect to get half credit (if about 200K reservations were from the US) or quarter credit (if almost all of the 400K reservations were from the US).
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ccutrer
Active Member
This is all assuming the terms of the credit don't change in the next 12 months due to the new political climate in the US...
True, but there is also the promise made to help coal and promoting electric vehicles that are, at least in part, powered by coal fired plants would be a good thing there. Not that it will in any way really make a difference, but politics is 80% appearances anyway.
GBleck
Member
Don't forget that GM will still have to make zev or buy credits as that isn't a federal requirement. They just sunk a lot of capital on the bolt development program. They are counting on the rebate to make them price competitive. Hell they where quoting the price with it factored in on the bolt. The CEO of GM is on the transition team. The only question is who has more pull GM or Exon? I'm not sure Exon cares that much but GM and to a lesser extent Ford would get screwed harder then tesla if the federal tax cred was removed. Could break either way.
For what it's worth, Exxon isn't going to benefit much from removing the EV tax credit and in fact may lose if it goes away. They produce lots of natural gas, which powers electric power plants. With greater EV demand, they see increased demand for electricity and that's a boost. We shouldn't be so quick to assume that all of these companies are as evil as we make them out to be and anti-EV.
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