-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
Tesla EV Tax Credits coming back?
- Thread starter hnguy054
- Start date
leaftoy
Member
When we are into Q4 deliveries if the proposed bill is law by then decision won’t be as straightforward.
I think the case for the Model Y is pretty straight forward. They know that people are willing to pay at the current prices so Tesla is incentivized to capture most of the benefit. Tesla is going to absolutely make use of their potential savings tab on their order pages.
- MY LR AWD: Tesla knows people will be willing pay approximately $53,990 for the base so they can raise the price as much as $7000 to $60,990 and still allow for the $8000 maximum of upgrades coming in just under the $69,000 limit for SUVs. This would only net the customer $1000 of benefit to wait until 2022.
- MY P: Tesla could raise the MY P $6000 from $60,990 to $66,990 allowing for the maximum of upgrades ($2000). This also maintains most of the price difference between the LR AWD and P. This would only mean a $2000 benefit to the customer to wait until 2022.
SageBrush
REJECT Fascism
I follow your reasoning, but I don't think it will play out that way. Tesla raised prices due to supplier constraints and higher cost of production. I expect Tesla to lower prices again as the supplier constraints ease if the tax credit is not available; and if the tax credit is available, then I expect Tesla to keep these prices even when supplier constraints ease.
Elon has said many times that Tesla does not price its cars to capture tax credits. I'm not convinced that is entirely true, but I think it is mostly true.
The unionization criterion is designed for companies that give workers rights through a union. It's a Democratic platform. I have no problem favoring companies that support workers' rights. The big three need all the help they can get. Look at their products. A Mustang dead on the street. A Chevy Bolt, that did... BOLT, that is, after it burned.
The only thing "at the expense of Tesla workers" is that they did not vote for a union when they had the opportunity. Choice. Musk insists the employees are happy with the way it is and their safety record is 2X better than auto-plants with unions. On the Glassdoor review site, the overall score for Tesla was a 3.4 out of 5 stars, which says employees, on average, enjoyed working there. They also get stock and free FSD with any Tesla they order. VW is also union-free.
The cost is a factor. People who can afford luxury cars outside the bounds should be able to afford the total price. If you can't find a truck under $74,000, that's a problem.
Remember, the "Hummer tax credit"? Wealthy business owners were able to accelerate deductions on any vehicle over 6,000 pounds. It was initiated by W and it was a way payback big farmers and oil companies who bought a lot of big trucks for their votes. It ain't right, but it's real and still in place. The cool thing was that the curb weight of the Model X is over 6,000 pounds and yes I got the $35,000 tax credit the year my business owned it.
To put it bluntly, the Hummer Loophole of Section 179 basically allows small business owners to write off 100% of “heavy equipment” purchases as long as those purchases are put into use at the business during the same year they are purchased. Big boys are always going to take care of each other.
So, its probably fair that the blue-collar workers at the big three get break for a change.
Has Tesla faced this scenario before with a tax credit starting?
If the bill is passed as is on September 27 as Nancy Pelosi is pushing for and Tesla keeps prices as is, then I would expect a decent number of people if not most to just hold their order until January which would hurt Tesla's Q4 deliveries and thus hurt their 2021 fiscal year delivery numbers.
With the given supply constraints maybe Tesla wants to do this, but I would guess not because deliveries are revenue and revenue means shareholder value which is big for a publicly traded company. I think part of the reason why Tesla would increase their actual prices immediately after the bill passes is to keep their Q4 delivery number stable. They can always drop their prices again later even on say 1/1/2022 to really drive more demand.
Elon might say they don’t price their cars to capture tax credits, but history has shown they do price capture tax credits, federal ones at least.
Check out the Model 3 price drops when the original tax credits started expiring, Tesla always lowered the price right after the tax credit went down.
I suspect Tesla is going to raise vehicle prices by the FSD cost ($10k), and include FSD as standard to capture these credits.
45thParallel
Member
That is only one side of the equation. What about me as a union worker earning average wages in a single income household? What have I done to be told because non union Tesla workers are better off than otherunion auto workers, I will not receive the federal tax rebates? All consumers who are also union workers should be treated the same. If not make the benefit income tested for all Americans regardless of the vehicle and union membership of buyers and also auto workers.
leaftoy
Member
Why should it be tied to income at all? There is already an upper limit on vehicle price in the proposal. Why not just leave it at that? An EV sale is an EV sale.
45thParallel
Member
I was responding to the person who said it is about Union workers. Once you start carving out benefits to target them to a favored groups the logic can be applied any number of ways. There is no end to it. One can justify the benefit going to one or the other group. Who is being helped? The union worker at a big 3 plant, a non union worker (Tesla), low income Americans or the environment. If it is the environment then any EV buyer should be able to get rebate. But like all pork, it is only meant for some, not everyone.
I think the opposite, Tesla would more likely lower prices between enactment and effective date to avoid a colossal inventory backup and loss of quarterly income.
Car demand is 3-6 months out right now. Sure some people will wait but I bet you more people will be glad to forgo the tax credit to take delivery now.
usna92
On order LR3 - Midnight Silver - Black -18"
Having the credit means-tested is window dressing for Congress that EVs are not just things rich people buy. I agree that if you really want to incentivize people to go electric it shouldn't matter who buys them, but I don't face re-election every two years. Regardless. I think the union portion of the credit is most likely the first to be cut in order to get the rest of the incentive through, but the whole thing might just be window dressing on the larger bill that may not survive.
leaftoy
Member
This may be true in this forum (may be) but if the bill is signed by the end of Sept with the current proposed language for EV tax credit and credit starts on Jan 1 how many can forego an almost 15% discount for the privilege of driving the vehicle couple of months sooner? Especially when resale value won’t distinguish between, say, a Dec 21 MY and Jan 22 MY and would factor in the discount.
I wonder if Tesla will provide an incentive such as get FSD for free if you take delivery before the end of the year. It's a $10K value vs getting $8K off of the price of the car by waiting until January. I was skipping FSD but I would consider it if this deal was presented as delivery is scheduled for mid to late November.
leaftoy
Member
Because without incentives, no one will want to take delivery between the period that the bill signs and 31 Dec 2021. Unless the desire to just have a car 1-3 months sooner had a valuation of $8k USD for someone.
Similar threads
- Sticky
