Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Discoducky]

This will also bring into play cars made in Mexico and Canada with final assembly in the US, vs Tesla made and assembled in US....

By many, many US veterans whom I proudly worked with.

 

[StarFoxisDown!]

Based on what has been posted about the $10,000 EV credit, it appears that Tesla buyers would be eligible for $7,500 and buyers of union made EV's could receive the full $10,000. I might have missed it, but I don't think that there's been an outline of the amount of money available and how the eligibility is determined in regards to the government's proposed charging network expansion.

Based on the totality of the circumstances leading up to the "Big 3 + UAW EV meeting" and the speech following their "agreement" I would not be surprised if the language for both the EV credits and the charging network build out is written in such a way that Tesla is excluded. For example; wording it so the funds are directed towards start-ups** to really jump start the adoption of EVs.

**"Start-up" = Any company that hasn't produced as many vehicles or built as many chargers as Tesla.

Sorry but this is just silly. The government isn't going to make a EV tax credit that excludes 98% of the manufacturing capability in the US (Tesla, Ford, GM, etc..) by making it for only start ups.

Not sure why people speculate like this. Biden was very clear in his words - $7,500 credit + $2,500 for American made + $2,500 for Union made. Tesla would be eligible for $10,000 of the credit. There's no way to exclude Tesla. Tesla's vehicle are priced across multiple ranges so they can't even try to exclude Tesla based on selling price of the car. There's nothing left to speculate on except for maybe speculating that the Union made part gets dropped all together.

 

[Cattledog]

Sorry but this is just silly. The government isn't going to make a EV tax credit that excludes 98% of the manufacturing capability in the US (Tesla, Ford, GM, etc..) by making it for only start ups.

Not sure why people speculate like this. Biden was very clear in his words - $7,500 credit + $2,500 for American made + $2,500 for Union made. Tesla would be eligible for $10,000 of the credit. There's no way to exclude Tesla. Tesla's vehicle are priced across multiple ranges so they can't even try to exclude Tesla based on selling price of the car. There's nothing left to speculate on except for maybe speculating that the Union made part gets dropped all together.

Hopefully. Because what are we saying by saying that? 89% of the US workforce isn't unionized. I'm not saying they are better, but I sure am not going to say they are worse and their contributions should be valued differently.

 

[wws]

I sure someone from the press asks President Joe why Tesla was not represented there today...

Keep in mind almost all the talking heads on TV, and most of the press are union members.

 

[Wicket]

The S/X in the states now Mar-Apr delivery. Do we have any idea whether we are running full production rate yet?

 

[willow_hiller]

union worker doesn’t equal US worker. If the intent is US worker, that should be the stipulation. I would at least see the benefit….

The way I've seen the bill described, I think the made-in-America credit is a necessary condition before the union-made credit can be applied.

From Green Car Reports : "The proposal, potentially part of President Biden’s $2 trillion infrastructure plan, would continue at the amount of $7,500 but include a boost of $2,500 for models that are assembled in the U.S., plus another $2,500 if the vehicles are made with production workers represented by a labor union."

So it would be $10,000 for a US-made non-union vehicle, and $12,500 for a US-made union vehicle, but $7,500 for all other foreign EVs (even if it's made by union labor).

 

[elasalle]

Tesla needs a “Not a union” union

 

[PeterJA]

Personally, I'm not concerned about the snub of Tesla, or the weak commitments of the Big Three (only 50% "electric" including hybrids), or union political power, etc. None of this matters, IMO, because Tesla will have the power to bankrupt all competitors by 2030.

FSD will change everything.

When people drive a BEV for the first time, most declare they will never buy another ICE car. The step change in functionality is so dramatic that people never go back.

When Tesla's FSD achieves Level 4/5, the news will dominate mass media worldwide. Everyone will hear about it. "Wait, what? I can send the car to pick up Grandma in another State? Grandpa can keep his mobility? No more drunk drivers? Kids can get to soccer practice on their own? I can work while commuting?"

The step change in functionality will be so dramatic that virtually no one will want EVs from Tesla competitors, let alone ICE cars. Overnight, their market value will plummet toward scrap metal. The companies that make them will go bankrupt, unless...

Their only hope is to license FSD tech from Tesla. Will Tesla license it? Of course, to achieve the mission. Some automajors will go bankrupt anyway because their products can't compete in other ways. (I predict Ford will be killed by Cybertruck.) But none have a chance without Tesla's FSD. None have Tesla's colossal driving data or AI expertise.

Some folks here have speculated Tesla might eventually sell batteries or skateboards. I doubt that; automajors can get their own batteries that are "good enough." But they can't compete with Tesla's software. For anyone who missed it, Lars makes this case with great clarity.

 

[M3Rider]

...would government support actually...slow down Tesla?

Tesla has a 5 month wait for the Y. If these Ys get a $10k credit, how long will the wait line be?

Option #1 for Tesla is raise the price by $9k (considering the competition from the $10k cheaper Bolts and Mach-Es - do the latter even qualify for the credits?)

Option #2 is to increase production & over-supply(temporarily) and force the competition to give away credits to consumers rather than raise prices. The 2 upcoming factories are just perfect in timing (actually, a bit late) to help the mission. I bet Elon hates having to raise the car prices and it was clear this would happen as soon as Biden got elected, but Elon really has no choice right now and up to when Austin and Berlin are pumping cars out at a full capacity. It's amazing that Elon saw this coming and acted on it 1yr+ ago. It's a game of matching demand and supply and projecting the S-curve into the future.
I mean, we all know Tesla is supply constrained, but by how much? If you 2x your production is there enough demand? The demand builds up as a function of time(more people had a chance to experience a Tesla) and lowering prices(this doesn't help lately) and I'm definitely impressed with how Elon's projections and building out of manufacturing capacity is aligning with the anticipated demand.

I remember some people questioning a year ago if there would be enough cars and if the waiting lines would keep growing. I thought the same, but could not believe it fully. Seemed so odd with all the FUD going around. Now we see it happening in real time.

So, to answer the question. I think the government support will speed up Tesla. Elon will not be happy with 35% margins just because that is what credits and "competition" is forcing Tesla to do. He will increase production asap to drop those margins to 25%. Well, then there's FSD, but that is separate. I'm in sync with @wholemarsblog in thinking that Tesla will drop hardware margins to zero if they can make up 25% in software only. Long live OEMs.

 

[HG Wells]

And that’s why we can’t move fast enough, this old farts don’t care about the future because they won’t be in it! Ridiculous! ( don’t feel offended if you are old, I specifically meant those old farts, I know all older people here care about the future, even if they won’t be in it!)

Listen, I didn't make all this money so I could just die.
I've got a clone body being grown over in Korea and as soon as it matures I'm getting a lot of new parts. /S

 

[gabeincal]

https://twitter.com/x/status/1423456008832131073

 

[capster]

Sorry but this is just silly. The government isn't going to make a EV tax credit that excludes 98% of the manufacturing capability in the US (Tesla, Ford, GM, etc..) by making it for only start ups.

Not sure why people speculate like this. Biden was very clear in his words - $7,500 credit + $2,500 for American made + $2,500 for Union made. Tesla would be eligible for $10,000 of the credit. There's no way to exclude Tesla. Tesla's vehicle are priced across multiple ranges so they can't even try to exclude Tesla based on selling price of the car. There's nothing left to speculate on except for maybe speculating that the Union made part gets dropped all together.

Assuming Tesla is eligible, the political calculus of excluding Tesla from today‘s event could be a bit more than merely grandstanding for labor.

It is likely that Tesla’s customers will take the lion’s share of the credits for some years. The legacy OEM’s will have a harder time in the future accusing the administration of favoritism towards Tesla given the favoritism it showed to the legacies today.

Or maybe Ol’ Joe didn’t want Elon to outshine the lot of them today. /s

 

[goinfraftw]

Tesla has a 5 month wait for the Y. If these Ys get a $10k credit, how long will the wait line be?

Option #1 for Tesla is raise the price by $9k (considering the competition from the $10k cheaper Bolts and Mach-Es - do the latter even qualify for the credits?)

Option #2 is to increase production & over-supply(temporarily) and force the competition to give away credits to consumers rather than raise prices. The 2 upcoming factories are just perfect in timing (actually, a bit late) to help the mission. I bet Elon hates having to raise the car prices and it was clear this would happen as soon as Biden got elected, but Elon really has no choice right now and up to when Austin and Berlin are pumping cars out at a full capacity. It's amazing that Elon saw this coming and acted on it 1yr+ ago. It's a game of matching demand and supply and projecting the S-curve into the future.
I mean, we all know Tesla is supply constrained, but by how much? If you 2x your production is there enough demand? The demand builds up as a function of time(more people had a chance to experience a Tesla) and lowering prices(this doesn't help lately) and I'm definitely impressed with how Elon's projections and building out of manufacturing capacity is aligning with the anticipated demand.

I remember some people questioning a year ago if there would be enough cars and if the waiting lines would keep growing. I thought the same, but could not believe it fully. Seemed so odd with all the FUD going around. Now we see it happening in real time.

So, to answer the question. I think the government support will speed up Tesla. Elon will not be happy with 35% margins just because that is what credits and "competition" is forcing Tesla to do. He will increase production asap to drop those margins to 25%. Well, then there's FSD, but that is separate. I'm in sync with @wholemarsblog in thinking that Tesla will drop hardware margins to zero if they can make up 25% in software only. Long live OEMs.

That's fair! Though the other parts to the equation of government support also include:

1. Unionization of Tesla workers
2. Supporting "America First" mandates

Elon Musk and team are about getting to the core mission of sustainable transport and energy as quickly as possible via this vehicle of innovation, Tesla. Either one of those two options would significantly reduce the capability to move quickly and between different nations rather than be beholden to the United States' mandates and programs. They don't need unit economics anymore, they've already won there regardless of tax credit or not. They've also won the product too.

At this point, IMO, they're a spearhead for this effort to sustainable transportation and energy with the other laggard automakers coming along for the ride. Remember, Toyota and Daimler both invested into TSLA and made their money helping spur the company's efforts. What did the US automakers do to support the advent of electrification of the US auto fleet and utility grid?

 

[wipster]

Keep in mind almost all the talking heads on TV, and most of the press are union members.

True, but that should not interfere with them doing their job properly and asking the questions people to which people want answers. The question about why Tesla was not represented was asked of Tesla owning Secretary Pete and even he couldn't (or wouldn't) answer it...

But even though Tesla is non-union, their pay and benefits exceed those available if team members were represented by the UAW. Union representation appears to not be a factor by both current Tesla Team members and those looking to become part of the team. That tells me something about the quality of the company.

 

[carterm2]

Is it possible that this time next year, there will be 4 factories building Model 3 and Y? It seems... incredible.

 

[goinfraftw]

That's fair! Though the other parts to the equation of government support also include:

1. Unionization of Tesla workers
2. Supporting "America First" mandates

Elon Musk and team are about getting to the core mission of sustainable transport and energy as quickly as possible via this vehicle of innovation, Tesla. Either one of those two options would significantly reduce the capability to move quickly and between different nations rather than be beholden to the United States' mandates and programs. They don't need unit economics anymore, they've already won there regardless of tax credit or not. They've also won the product too.

At this point, IMO, they're a spearhead for this effort to sustainable transportation and energy with the other laggard automakers coming along for the ride. Remember, Toyota and Daimler both invested into TSLA and made their money helping spur the company's efforts. What did the US automakers do to support the advent of electrification of the US auto fleet and utility grid?

I'll add on that being in the United States and having the right to not participate with the direction of the country is a net positive for being housed here in the United States for Tesla.

What would have happened to this company in China? Europe?

The US has the ability to not only represent a huge market segment of the world auto market, while also being a great incubator for companies. Elon Musk chose the hardest path for Tesla, but also the truest.

 

[HG Wells]

Is it possible that this time next year, there will be 4 factories building Model 3 and Y? It seems... incredible.

If the third and fourth factories aren't online by spring i'm gonna be broke !

 

[Mardak]

So it would be $10,000 for a US-made non-union vehicle, and $12,500 for a US-made union vehicle, but $7,500 for all other foreign EVs (even if it's made by union labor).

That looks to be temporary according to this latest(? June 17) explanation of Modified Chairman's Mark of Clean Energy for America Act from Joint Committee on Taxation:

Notably before 2026, there is a "base" $7,500 ($2,500 + $5,000 increase based on battery size) EV credit + $2,500 union-made + $2,500 US-made. And beginning 2026, EV credit "base" is $10,000 ($5,000 + $5,000 battery) but requires US-made while keeping + $2,500 union-made.

 

[vwman111]

Call it the F.UAW

Fabulous Un-Union of Auto Workers
LOCAL 420.69

All complaints can be forwarded to the Shop Steward Dojo for prompt resolution, or escalated; quite literally; to Starman - in person.

F.UAW

Fabulous in one word

 

[Mardak]

What do people think of The Joint Committee on Taxation’s revenue estimate (pdf) for Electric vehicle credits as proposed by Clean Energy for America Act?

Assuming $7,500 (refundable) EV credit per vehicle, this seems to project these yearly US EV sales:
2022: 37k
2023: 184k
2024: 208k
2025: 233k
2026: 265k
2027: 304k
2028: 342k
2029: 376k
2030: 411k
2031: 447k
2022-26: 927k
2022-31: 2.8M