Tax Credit

[Trips]

If the credit runs out you can always buy Apples version in 2020. It will be the same as a 2017 M3 but with a fancy fingerprint ignition button.

Seriously my guess is that at 160% growth that would put US sales at around 150-160k on Jan 1st 2018. 39k sales in Q1 puts them just under. Full Credit in Q2 and Q3 of 2018 puts roughly 150,000+ people at a full credit.

 

[JonathanDandrea]

Chevy has sold around 100,000 plug in vehicles to date and as the theoretical primary competition for the Model 3 if the Bolt is successful it will run into the same rebate issue is all I'm saying.
And mass market does imply economy. Tesla has targeted the 3 series and BMW with their performance and features. BMW sells millions of cars globally per year which is a fairly mass market. Eventually Tesla may make a Honda Accord fighter but the Model 3 is not it and doesn't need to be to be successful.
What they need to do is streamline their repair process. A broken taillight and small scratch took over a month for parts and cost 8000$ to fix on our Model S. Tax credits will be meaningless if mainstream consumers are forced to deal with such headaches. I'm rooting for them.

 

[gregincal]

I truely don't understand how anyone's math works out that the $7500 would even be close to available. If the Model 3 is on time, 100,000-175000 Model S/X will have been built. Tesla still sells a large majority of produced cars to the US market. If Model 3 production doesn't start until a quarter later your chances at the 50 percent might be nil aswell.

??? If the Model 3 is on time as you say they will have build 100-175K Model S/X. That means that the 200K barrier will be crossed some number of months after the Model 3 starts shipping and the full credit will be available for probably at least 4 months after that point. And then you have 6 months of a partial credit. Even if the Model 3 is late, the odds of Tesla crossing the 200K mark before shipping the 3 are quite slim. So how can you say that it won't even be close to available when your very stats show that it almost certainly will be available.

 

[tga]

??? If the Model 3 is on time as you say they will have build 100-175K Model S/X. That means that the 200K barrier will be crossed some number of months after the Model 3 starts shipping

Don't forget, it's 200,000 cars delivered in the US, not total cars shipped. Deliveries outside the US don't count towards the 200k.

 

[MrBoylan]

I truely don't understand how anyone's math works out that the $7500 would even be close to available. If the Model 3 is on time, 100,000-175000 Model S/X will have been built. Tesla still sells a large majority of produced cars to the US market. If Model 3 production doesn't start until a quarter later your chances at the 50 percent might be nil as well.

I think others have pointed out that even the most optimistic models for Tesla sales growth predict that Tesla will hit the "200,000 vehicles delivered in the USA" threshold some time in 2018. And when they hit that number, all Teslas sold in that quarter and in the following quarter will be eligible for the full credit. Then for 6 additional months (2 quarters), they'll be eligible for $3750 tax credit (50%) and for the next two quarters $1875 (25% credit). The actual full phase-out date for Tesla is likely to occur some time in 2019 or even 2020 depending on how quickly they can ramp up production of the X and the Model 3, and how sustained the demand is for the Model S and Model X in the United States (since these sales stats impact when they'll hit the 200K mark).

Irony of the whole thing was this all indicates that the Tax Credit was a huge success. Not only did it produce an atmosphere for mass produced EV's. It also created the First new auto Manufacture in the US in decades and 50,000+ jobs.

I agree that it has and will continue to be beneficial in facilitating adoption of lower emission/sustainable transportation. So yay!

I'm biased being a Canadian without a $7500 federal tax credit.

Bummer! But many Canadian provinces have their own tax incentives for EVs (Ontario, BC and Quebec). Can you move?

 

[MrBoylan]

Chevy has sold around 100,000 plug in vehicles to date and as the theoretical primary competition for the Model 3 if the Bolt is successful it will run into the same rebate issue is all I'm saying.
And mass market does imply economy. Tesla has targeted the 3 series and BMW with their performance and features. BMW sells millions of cars globally per year which is a fairly mass market. Eventually Tesla may make a Honda Accord fighter but the Model 3 is not it and doesn't need to be to be successful.
What they need to do is streamline their repair process. A broken taillight and small scratch took over a month for parts and cost 8000$ to fix on our Model S. Tax credits will be meaningless if mainstream consumers are forced to deal with such headaches. I'm rooting for them.

The Model 3 is likely to be steel instead of aluminum, which should make getting bodywork done much simpler. Parts could still be an issue though. Hopefully they'll get better about stocking those in service centers and maybe even start selling them wholesale to independent service centers at some point.

As for competing with an Accord, I think the Model 3 will actually be able to do that, not to mention Prius (particularly plug-in Prius) and even a Corolla. The Model S and X are already being purchased by many who would never have considered such an expensive car in the past. I think when the general public figures out how clean, peppy. convenient and cool an EV can be, they'll be willing to pony up a bit extra to get one (particularly one with the brand appeal of a Tesla). I'm not saying the Model 3 will make a significant dent in Corolla or Accord sales, but it wouldn't be ridiculous for a potential buyer of these entry/mid level sedans to consider reaching a bit to take home a Tesla Model 3.

 

[EcoHeliGuy]

I think others have pointed out that even the most optimistic models for Tesla sales growth predict that Tesla will hit the "200,000 vehicles delivered in the USA" threshold some time in 2018. And when they hit that number, all Teslas sold in that quarter and in the following quarter will be eligible for the full credit. Then for 6 additional months (2 quarters), they'll be eligible for $3750 tax credit (50%) and for the next two quarters $1875 (25% credit). The actual full phase-out date for Tesla is likely to occur some time in 2019 or even 2020 depending on how quickly they can ramp up production of the X and the Model 3, and how sustained the demand is for the Model S and Model X in the United States (since these sales stats impact when they'll hit the 200K mark).


I agree that it has and will continue to be beneficial in facilitating adoption of lower emission/sustainable transportation. So yay!


Bummer! But many Canadian provinces have their own tax incentives for EVs (Ontario, BC and Quebec). Can you move?

I ment to say 100,000-175000 more which is the figures Tesla is implying with 1000/wk figures they provide.

BC tax credit is for cars below 77k. Considering current exchange rates and pricing. A well optioned Model 3 might not qualify.

 

[gregincal]

I ment to say 100,000-175000 more which is the figures Tesla is implying with 1000/wk figures they provide.

BC tax credit is for cars below 77k. Considering current exchange rates and pricing. A well optioned Model 3 might not qualify.

But that's total production, not US sales. Tesla sells about half their cars in the US, which means 50-85K, and they've sold about 65K cars in the US up until now. Still quite short of 200K.

 

[Trips]

2014 they sold 16,689 US cars. (From financial report)
2015 was 25,207 US cars. (From financial report)

Total Worldwide Sales:
2016: 80,000 - 90,000 cars (EM's estimate to shareholders)
2017: 150,000 cars/year (My Estimate)
2018: 225,000 cars/year (My Estimate, higher percentage US sales as M3 roll out starts there)
2019: 350,000 cars/year (My Estimate)
2020: 500,000 cars/year (EM's stated Goal)

 

[Red Sage]

The Model 3 is likely to be steel instead of aluminum, which should make getting bodywork done much simpler. Parts could still be an issue though. Hopefully they'll get better about stocking those in service centers and maybe even start selling them wholesale to independent service centers at some point.

Once upon a time, a guy was interviewed and merely said that Model ☰ would be made from 'appropriate materials'... Sometime later, someone asked Elon Musk and in an offhand comment he said it would be 'made of steel'... Since then, many Tesla Enthusiasts have predicted the Generation III vehicles would be built primarily using 'high strength lighweight steel', with strategic use of aluminum bits, and perhaps combined with a carbon fibre reinforced plastic 'life cell', similar to what BMW introduced with the i3/i8.

Even so, at least until Thursday, I'll hold out hope the Model ☰ will be built in a manner very similar to the Model S and Model X. That is, 90% of frame and body being aluminum. So that most of what you see in the exterior of the completed car is aluminum, plastic, and glass... While some critical components that are hidden within the body are made of hardened boron steel. I believe that the long-term anti-rust aspects of construction greatly outweigh the issues of fender bender correction.

As for competing with an Accord, I think the Model 3 will actually be able to do that, not to mention Prius (particularly plug-in Prius) and even a Corolla. The Model S and X are already being purchased by many who would never have considered such an expensive car in the past. I think when the general public figures out how clean, peppy. convenient and cool an EV can be, they'll be willing to pony up a bit extra to get one (particularly one with the brand appeal of a Tesla). I'm not saying the Model 3 will make a significant dent in Corolla or Accord sales, but it wouldn't be ridiculous for a potential buyer of these entry/mid level sedans to consider reaching a bit to take home a Tesla Model 3.

Well, I don't see this so much as 'competing' with Accord, Camry, Malibu, Altima, Sonata, and Optima... So much as showing the Model ☰ is a suitable 'upgrade' from those vehicles. The AUDI A4 might be considered an upgrade from the Accord -- until someone realizes the same car can basically be had as a Volkswagen Jetta -- for about the same as an Accord. And let's face it, the combined A4 and Jetta sales doesn't come close to those of an Accord in the US. On the other hand, if 40% of Model ☰ sales are in the US, and 500,000 units are sold worldwide, that would make for 200,000 units sold here each year. Well above what BMW 3-Series has ever managed to accomplish. Dependent upon just how popular the Model ☰ becomes in the US, and when manufacturing facilities are built in Europe and Asia to make them, it could well be that it reaches 200,000+ units per year here well before 2020. And that would be more than enough to crack the top twenty passenger cars sold here in just about any year.

 

[EcoHeliGuy]

Once upon a time, a guy was interviewed and merely said that Model ☰ would be made from 'appropriate materials'... Sometime later, someone asked Elon Musk and in an offhand comment he said it would be 'made of steel'... Since then, many Tesla Enthusiasts have predicted the Generation III vehicles would be built primarily using 'high strength lighweight steel', with strategic use of aluminum bits, and perhaps combined with a carbon fibre reinforced plastic 'life cell', similar to what BMW introduced with the i3/i8.

Even so, at least until Thursday, I'll hold out hope the Model ☰ will be built in a manner very similar to the Model S and Model X. That is, 90% of frame and body being aluminum. So that most of what you see in the exterior of the completed car is aluminum, plastic, and glass... While some critical components that are hidden within the body are made of hardened boron steel. I believe that the long-term anti-rust aspects of construction greatly outweigh the issues of fender bender correction.


Well, I don't see this so much as 'competing' with Accord, Camry, Malibu, Altima, Sonata, and Optima... So much as showing the Model ☰ is a suitable 'upgrade' from those vehicles. The AUDI A4 might be considered an upgrade from the Accord -- until someone realizes the same car can basically be had as a Volkswagen Jetta -- for about the same as an Accord. And let's face it, the combined A4 and Jetta sales doesn't come close to those of an Accord in the US. On the other hand, if 40% of Model ☰ sales are in the US, and 500,000 units are sold worldwide, that would make for 200,000 units sold here each year. Well above what BMW 3-Series has ever managed to accomplish. Dependent upon just how popular the Model ☰ becomes in the US, and when manufacturing facilities are built in Europe and Asia to make them, it could well be that it reaches 200,000+ units per year here well before 2020. And that would be more than enough to crack the top twenty passenger cars sold here in just about any year.

I never felt we would see steel panels. Steel frame is possible, but almost every manufacture including the big Three US truck makers are using aluminum panels especial in the hood.

Auto body shops already know how to fix aluminum as it isn't new in the Auto world, only new in the primary structure.

Model 3 is going to be a premium class leader. That's just who Telsa is.

 

[Az_Rael]

Chevy has sold around 100,000 plug in vehicles to date and as the theoretical primary competition for the Model 3 if the Bolt is successful it will run into the same rebate issue is all I'm saying.
.

I agree- I think GM might beat everyone to the 200,000 EV car tipping point. The 2nd gen Volt is much improved over the 1st gen, which accounted for the lion's share of the credit count cars I believe. I expect the 2nd gen Volt to sell well, especially now that it is available nationwide. If they do get the first Bolt's into people's hands at the end of 2016 or 1st quarter 2017, they will have 2 full years of 2nd gen Volt sales plus close to 1 full year of Bolt sales before a single Model 3 is released. And they are already halfway to the credit cap now.

I could see a scenario where all three major EV manufacturers (GM, Nissan, Tesla) are into their credit phase out periods when the Model 3 actually releases. Maybe that's why Tesla isn't too worried about it. They know they won't be competing against other cars with credits at that point. Level playing field and all.

 

[MrBoylan]

I agree- I think GM might beat everyone to the 200,000 EV car tipping point. The 2nd gen Volt is much improved over the 1st gen, which accounted for the lion's share of the credit count cars I believe. I expect the 2nd gen Volt to sell well, especially now that it is available nationwide. If they do get the first Bolt's into people's hands at the end of 2016 or 1st quarter 2017, they will have 2 full years of 2nd gen Volt sales plus close to 1 full year of Bolt sales before a single Model 3 is released. And they are already halfway to the credit cap now.

I could see a scenario where all three major EV manufacturers (GM, Nissan, Tesla) are into their credit phase out periods when the Model 3 actually releases. Maybe that's why Tesla isn't too worried about it. They know they won't be competing against other cars with credits at that point. Level playing field and all.

Great! So then once the Volt and Bolt start selling in big numbers, we'll have some of the big money lobbyists from the "big 3" petitioning to extend the tax credit for EVs (raise the caps). It would be nice to have someone on Tesla's side for something like this, even if it is for (mostly) selfish reasons.

 

[Red Sage]

Nah. The traditional automobile manufacturers still don't want to legitimately offer electric cars en masse. They won't petition for extensions... Even if a car like the BOLT becomes a phenomenal success... Unless they can make sure the Tax Credits are only applied to plugin hybrids, or fully electric vehicles from manufacturers of ICE vehicles -- thereby eliminating Tesla from eligibility. They would prefer to exclude Tesla Motors from the benefits they created for themselves. As it is, Naysayers, $#0r+s, Bears, Pundits, ANALysts, and various other talking heads continually attempt to crucify Tesla for 'gaming the system' for 'carbon credits' or ZEV Credits, but don't acknowledge such things were created -- by the request of traditional automobile manufacturers -- before Tesla even existed.

 

[rayng]

If the Model ☰ is compelling enough, then tax credits don't really matters as much. Most people don't buy a car just to receive tax credits or rebates.

Koch brothers are lobbying to get rid of all ev-related tax credits or rebates.

The issue for me is not really tax credits or rebates, but the high cost of Tesla options. I'd imagine prospective owners to balk at five-figure upgrades. For the Model ☰ to be successful, it must have a package of options that most people want that won't push the cost of the car to over 50k. I can see 40-43k as the sweet-spot for Model ☰ with autopilot and decent range (~160 miles at 80% charge).

 

[wabbit]

Does anyone know how the tax credit works? Does Tesla give you a certificate as a means of proof to keep in the event you get audited? Do they simply take the amount off your purchase agreement when you take delivery?

Tesla would not likely be involved. Presumably you would receive an invoice when your car is purchased (or delivered- when the sale is final) You would then apply that $7,500.00 to your federal tax liability the year of your purchase.

You could deduct this (apply the credit) from you tax bill. If you do not have a tax liability exceeding the $7,500.00 you can only apply the credit equal to the federal tax you owe. You cannot carry over any balance to the next year. The federal credit is a one time deal.

State incentives or credits (if any) are governed by the state you live in.

There is a finite number (200,000) per manufacturer of qualified sales then a diminishing number of qualifying sales will be in effect until time runs out and the program ends for that manufacturer. Tesla has about half of their quota left. (first come first served). Go to a Tesla store and they will give you the up to date details.