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

[Thekiwi]

So is Model Y technically a SUV? What is the official definition of an SUV? Is there one? Incredibly strange that a slight difference in cabin space will enable a $25k increase in price ceiling for the EV subsidy (Comparing the model 3 vs model y).

Hopefully this doesn’t freeze sales in the US in the interim Period until subsidy is active for Tesla (once the bill is actually passed) - good thing there is a big order book to work through, and plenty of international markets they can ship to if needed.

Sawyer says it will only apply to vehicles purchased from Jan 1st 2023:

https://twitter.com/x/status/1552468703136161792

 

[Accident]

Bill text: https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_of_2022.pdf

Summary lifted from Reddit:

"Credit is now refundable and can be claimed by the dealer to be applied as an incentive at point of sale."

We know how much dealerships are going to markup EVs from now on.

 

[Thekiwi]

No real definition. Just that they'll follow EPA classifications:

‘‘(C) REGULATIONS AND GUIDANCE.—For purposes of this paragraph, the Secretary shall prescribe such regulations or other guidance as the Secretary determines necessary or appropriate for determining vehicle classifications using criteria similar to that employed by the Environmental Protection Agency and the Department of the Energy to determine size and class of vehicles.’’.

Coming soon: the model 3 SUV not-a-sedan edition

 

[thesmokingman]

"Credit is now refundable and can be claimed by the dealer to be applied as an incentive at point of sale."

We know how much dealerships are going to markup EVs from now on.

Damn, that is terrible.

 

[willow_hiller]

Coming soon: the model 3 SUV not-a-sedan edition

It is going to make things awkward if the Model Y qualifies based on an Austin/Sparks pack and an MSRP under $80k, where the AWD Model 3 gets nothing and the RWD Model 3 might only qualify for a half-credit because of the LFP cells.

 

[Nocturnal]

If this is refundable at point of sale, then most of the value will go to the dealers vs the makers I think.

So is Model Y technically a SUV? What is the official definition of an SUV? Is there one? Incredibly strange that a slight difference in cabin space will enable a $25k increase in price ceiling for the EV subsidy (Comparing the model 3 vs model y).

Hopefully this doesn’t freeze sales in the US in the interim Period until subsidy is active for Tesla (once the bill is actually passed) - good thing there is a big order book to work through, and plenty of international markets they can ship to if needed.

X definitely is to due gross weight. It would be nice if these dumb dumbs had offered specific definitions in the bill but this is Congress so it will probably fall back on the existing IRS rules around trucks vs cars vs crossovers.

In the past this encouraged large gas guzzlers because of accelerated deprecation etc. That's why big SUVs exploded onto the scene in the 90s. EVs are heavier than gas counterparts so this might work to our advantage.

It's complicated. Edit, I see the bill is maybe looking to the EPA for guidance? Now it's even more complicated.

Little-Known Tax Deductions on Crossover Vehicles

 

[henchman24]

So is Model Y technically a SUV? What is the official definition of an SUV? Is there one? Incredibly strange that a slight difference in cabin space will enable a $25k increase in price ceiling for the EV subsidy (Comparing the model 3 vs model y).

Hopefully this doesn’t freeze sales in the US in the interim Period until subsidy is active for Tesla (once the bill is actually passed) - good thing there is a big order book to work through, and plenty of international markets they can ship to if needed.

Y is a SUV.

I doubt this freezes sales… the prices will just continue to go up.

 

[MikeC]

IN GENERAL.—No credit shall be allowed under subsection (a) for a vehicle with a manufacturer’s suggested retail price in excess of the applicable limitation."

So legacy can put a $54,999/79,999 MSRP on their vehicle, then dealers will mark it up $50k and still claim the credit.

 

[MikeC]

My reading is that they unfortunately count now. They're striking every mention of "plug-in vehicle" and replacing it with "new clean vehicle."

What I want to know is whether PHEV's and HEV's count as EV's. This would be counter-productive to the mission, and I very much hope not.

It’s from Joe Manchin who has the Toyota plant in West Virginia so it’s going to favor hybrids…and maybe not even plug-in hybrids?

I also want to say these income limits almost seem specifically designed to exclude Tesla. Upper-middle class people pollute, too.

 

[henchman24]

It’s from Joe Manchin who has the Toyota plant in West Virginia so it’s going to favor hybrids…and maybe not even plug-in hybrids?

I also want to say these income limits almost seem specifically designed to exclude Tesla. Upper-middle class people pollute, too.

Retire, don’t sell stock for a year, fall under income limits, profit.

 

[samppa]

Man, I wish that instead of these ev credits they would focus on removing fossil fuel subsidies..

 

[Discoducky]

Retire, don’t sell stock for a year, fall under income limits, profit.

Must.Not.Make.More.Than.300k.Selling.Options
Must.Not.Make.More.Than.300k.Selling.Options
Must.Not.Make.More.Than.300k.Selling.Options

 

[ZachF]

At this point, while the EV credits might help some manufacturers, it's really going to be messy for consumers IMO... With the high demand for all EVs, I don't see any manufacturers passing any of the new subsidies on to the consumer. So, already inflated auto prices are likely to jump up. Maybe this helps demand, but more likely just further complicates the supply problem.

Probably would’ve been better to use the money to help secure battery manufacturing and materials supply chains.

 

[Nocturnal]

So legacy can put a $54,999/79,999 MSRP on their vehicle, then dealers will mark it up $50k and still claim the credit.

That still means a customer needs to be willing to pay that though. Why would a customer buy a 100k Mach-E to get a $7500 credit when they can buy a 70k P3 without one?

Also means that the automakers won't get the benefit so it will keep dealers alive while the manufacturers wither and die.

Probably would’ve been better to use the money to help secure batteries and battery supply chains.

They would just loan it all to GM and waste it that way.

 

[Nocturnal]

I have no clue how you’re getting that this is designed to exclude Tesla. Households above these income limits won’t have issues buying a Model 3/Y. All Tesla needs to do is drop the Model 3 Performance price by $700 to qualify. The SUV limit doesn’t exclude any trim version of the Y, not even close.

The bill has no cap and expires for everyone in 10 years. The vast majority of the EV credits will be gobbled up by Tesla buyers. By the time the vast majority of legacy auto is fully ramped, the ev credits will only have a couple more years left

I'd bet that enough customers would spend that 7500 credit on an FSD upgrade post sale to more than offset that small price drop.

 

[StarFoxisDown!]

That still means a customer needs to be willing to pay that though. Why would a customer buy a 100k Mach-E to get a $7500 credit when they can buy a 70k P3 without one?

Also means that the automakers won't get the benefit so it will keep dealers alive while the manufacturers wither and die.

They would just loan it all to GM and waste it that way.

Exactly. Dealerships are gonna mark up EV’s that by far outweigh the ev credit…..this driving more demand back to Tesla

 

[StealthP3D]

A full quarter has passed since Elon answered a question from Alex Potter of Piper Sandler on the last earnings call about a new compensation plan for him with the 2018 plan almost completed:


This short answer gave me the impression that Elon does not want to have any more compensation for his work as Tesla CEO. It seems from this and his own comments in recent interviews and on Twitter that he just wants to be useful to civilization.

This was one of the most underappreciated nuggets of information in that call, because the 2018 CEO Performance Award will have given Elon 12% of the equity as of 2018, plus it cost us payroll tax too, so this was basically an announcement that over 12% of Tesla’s cost structure has expired with no plans for renewal.

For Q2, there was no mention of another CEO compensation plan on the call, in the Q2 earnings deck and in the 10-Q even though they know they'll hit the maximum remaining target of $175B annualized revenue by around Q4 '23 or Q1 '24. This makes it incrementally more likely that Elon really won’t be getting another compensation plan and the rate of dilution of other shareholders will decline dramatically.

I read this a little differently. Elon realized his windfall compensation package far earlier than industry observers (and probably the people who signed off on the plan) thought he could achieve. I don't know the exact dollar total of the value, but it's an excruciatingly large number for 5 or 6 years. While I think he was worth an excruciatingly large sum, I do think some of the other star performers could have had their earnings boosted some without impacting Elon's too much.

I think Elon will, in time, negotiate another compensation package but he will not do it too quickly as there is no pressing need until the 2018 package is fully exhausted and it would only make him look insecure and greedy. He is not greedy but he is rational and he believes he can spend it better than most. He knows the more capital he has to seed a Mars colony, the higher chance it has to succeed and the less he will need to grub for funding from others. I think he will negotiate a compensation package that is highly innovative in ways we cannot presently know, that will have less compensation in terms of cash value/options and more personal freedom. I don't know what it will be, but I think his next package might leverage Tesla's strengths to achieve good things for humanity or perhaps even towards other employees (in addition to a somewhat less generous personal compensation he can put towards Mars). It doesn't make sense to do all the hard work for no additional compensation at all. He will see his stock increase in value regardless.

In any case, I think all shareholders are pleased he was able to hit his outrageously bullish targets so quickly, particularly in the face of the hurdles that presented themselves and that it was not a boondoggle in any respect (except to those who laughed at it).

 

[Beltsbear]

Sawyer says it will only apply to vehicles purchased from Jan 1st 2023:

https://twitter.com/x/status/1552468703136161792

This is going to make Q4 difficult. Not that Tesla cannot setup incentives for people to take delivery in Q4, but if they raise prices again it is going to look bad. (Unless they do it tonight or something). But Tesla does nothing, it is a $7500 incentive for people to delay delivery.

 

[ZachF]

https://twitter.com/x/status/1552477383629963265

Neat.

 

[Big Time]

https://twitter.com/x/status/1552477383629963265

Neat.

https://twitter.com/x/status/1552481580286984192