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

[MP3Mike]

Most bizarre move of the day - Rivian up 8% after the EV bill pass which completely screws it over lol. You can't make this stuff up

Actually Lucid and Rivian will be fine for a couple years if they contact pre-order people and convert the pre-order to a binding order contract. (Since that allows them to claim the current credit even if the vehicle is delivered next year.)

I suspect that we will see a lot of binding order contracts from all of the competition so they can continue under the old rules for a year or two.

 

[Singuy]

Most bizarre move of the day - Rivian up 8% after the EV bill pass which completely screws it over lol. You can't make this stuff up

Rivians short interest is pretty high so...

 

[Usain]

I wonder if Rivian's vans could qualify for a credit?

 

[Fred42]

Actually Lucid and Rivian will be fine for a couple years if they contact pre-order people and convert the pre-order to a binding order contract. (Since that allows them to claim the current credit even if the vehicle is delivered next year.)

If a customer does sign a binding contract, and the company files for Chapter 11 before it's delivered, can the customer walk away?

 

[Cosmacelf]

Poor use, maybe. But it's still a non-refundable tax credit so it only results in people keeping money they would have paid in taxes, it doesn't subsidize purchases with other people's taxes.
Opportunity cost versus waste.

The problem is that in a tight supply market, vendor prices will rise to balance out demand. Meaning consumers aren’t going to see any net price reduction when all is said and done. Tesla is not going to have two year wait times for its vehicles. They will keep raising prices until wait times get manageable. So, yeah, this is corporate welfare through and through to help GM and Ford. That it also helps Tesla is incidental. Ferragu is correct.

This is the same dynamic that we see in the college tuition market. Huge demand plus available loans have pushed tuition sky high.

 

[Mengy]

Most bizarre move of the day - Rivian up 8% after the EV bill pass which completely screws it over lol. You can't make this stuff up

In the short term the stock market almost never makes sense. You need to zoom way out to witness the story the stock market truly tells.

 

[henchman24]

Ford can probably ask for it to be reclassed for the 2023 model year... Unless there is a technical reason it was classed as such, like because it is smaller?

Mach E in the US isn't rated for towing (it is in Europe), so it can't be rated as a SUV which bases off GVWR for size. If Ford certifies for towing, they can reclassify.

 

[woodisgood]

Does the new bill extend solar tax credits? Haven’t seen it mentioned…

 

[jw934]

Above is the cash spent on warranty, not the amount reserved.

As an investor, great to see the quick decline in warranty cash spent per vehicle. As a promoter, the fact that Tesla has the second lowest cost for warranty service (top is Toyota) helps back the reliability claim.

 

[unk45]

Dude, you should see Teslafornia. They grow on trees here. It's more like who doesn't have one.

Does that really seem to say California Teslas are spreading like wildfires?

 

[StarFoxisDown!]

Does the new bill extend solar tax credits? Haven’t seen it mentioned…

It not only extends, it increases the solar tax credit. But about 2-3k I believe

 

[Singuy]

View attachment 838076

Above is the cash spent on warranty, not the amount reserved.

As an investor, great to see the quick decline in warranty cash spent per vehicle. As a promoter, the fact that Tesla has the second lowest cost for warranty service (top is Toyota) helps back the reliability claim.

Bears claim these are fake numbers because Tesla is loosey goosey at giving out free goodwill. Then on the flip side we hear stories that people raise hell because Tesla wouldn't cover thing that doesn't belong to them in the first place, goes to twitter and complain, and then forcing Tesla to goodwill them the stuff.

 

[Speedr117]

Does the new bill extend solar tax credits? Haven’t seen it mentioned…

Yes, 30% for both Solar and storage (for 10 years I believe). Haven't seen whether income caps are on it though.

The current program is 26% on both, going down to 22% next year if IRA doesn't get passed in the house.

 

[BrownOuttaSpec]

Gigafactory Canada might be getting more traction:

EXCLUSIVE: Ontario lobby activity may indicate plans for a Tesla factory

As CEO Elon Musk hints heavily that Tesla Canada factory could be a possibility, public documents in Ontario show concrete interest

electricautonomy.ca

Electric Autonomy Canada requested comments from Ontario’s minister of economic development, job creation and trade Vic Fedeli, federal minister of Innovation, Science and Education (ISED) François-Philippe Champagne, and three representatives from Tesla.

Minister Fedeli had “no comment” on the question of whether or not Tesla is looking to set up additional facilities in Ontario.

However, in an email sent to Electric Autonomy Canada after his initial decline to comment, Fedeli stated: “By reducing the cost of doing business by $7B annually, Ontario has attracted $16B in EV investments in the last 20 months.

This goes also with what he said at the Aug 6th shareholder meeting:
During the meeting Elon said that Tesla "might be able to announce another factory location later this year." When Elon asked where the next Gigafactory should be, the crowd shouted out various locations. Elon then said:

"We get a lot of Canada. I am half Canadian, maybe I should?"

 

[henchman24]

It not only extends, it increases the solar tax credit. But about 2-3k I believe

It is a percentage instead of an amount. It is 26% today and was going to be 22% next year... this bill has it at 30%.

 

[M|S|M MYP]

If a customer does sign a binding contract, and the company files for Chapter 11 before it's delivered, can the customer walk away?

We should ask the D'hybrid and Nikola semi pre order folks

 

[thx1139]

Does the new bill extend solar tax credits? Haven’t seen it mentioned…

Yes back to 30% and now battery storage is included

 

[unk45]

View attachment 838076

Above is the cash spent on warranty, not the amount reserved.

As an investor, great to see the quick decline in warranty cash spent per vehicle. As a promoter, the fact that Tesla has the second lowest cost for warranty service (top is Toyota) helps back the reliability claim.

As the Tesla reserving and costs have declined it’s important to realize that improved paint shops, mega-castings, HVAC improvements, structural battery packs etc. are combining to accelerate that trend, first with reduced preparation cost, then reduced warranty cost, increased perceived quality and reliability, then reduced warranty reserving. More or less in that sequence. The etc. includes a large number of things discussed in the engineering thread and elsewhere.

All that contributes to increasing margins just as scale increases too. Obviously all this is one part of recent optimism by key Tesla people and everyone who follows closely.

Probably good to mention that all this also makes expansion to unserved markets easier because of reduced overall support costs. Here come more increasing margins!

 

[TheTalkingMule]

The problem is that in a tight supply market, vendor prices will rise to balance out demand. Meaning consumers aren’t going to see any net price reduction when all is said and done. Tesla is not going to have two year wait times for its vehicles. They will keep raising prices until wait times get manageable. So, yeah, this is corporate welfare through and through to help GM and Ford. That it also helps Tesla is incidental. Ferragu is correct.

This is the same dynamic that we see in the college tuition market. Huge demand plus available loans have pushed tuition sky high.

I'm no fan of all this subsidy nonsense, but it'll do the job. Thif only because the EV transition moves faster if we neuter the anti-EV lobbying of GM and Ford.

Tesla is already consuming all the EV margin, this will only make it "worse" for GM/Ford by pulling more margin artificially from ICE to EV.

I'm just happy we have the Austin Gigafactory ramping and can scoop up nearly all the subsidy til 2025.

 

[LYTRIDR]

Much digital ink has been spilled regarding the ability of raw materials extracted from various sources worldwide to enable qualification for the tax credit. Very little discussion has been had regarding the second part of the requirement:

(1) CRITICAL MINERALS REQUIREMENT.— ‘‘(A) IN GENERAL.—The requirement described in this subparagraph with respect to a vehicle is that, with respect to the battery from which the electric motor of such vehicle draws electricity, the percentage of the value of the applicable critical minerals (as defined in section 45X(c)(6)) contained in such battery that were—
‘‘(i) extracted or processed— ‘‘
(I) in the United States, or
(II) in any country with which 18 the United States has a free trade 19 agreement in effect, or 20‘‘
(ii) recycled in North America

How much processing will be required to qualify for this credit? Will processing of the raw chemicals into cathode be enough to qualify? It looks like the Secretary of Energy will propagate instructions as to what is required and that manufacturers will certify compliance, so we will need to wait quite a while to understand exactly what is required, but it would seem to me that processing from nickel, cobalt, aluminum and manganese to NMC or NCA cathodes would meet the guidelines for this credit regardless of the point of origin (excluding ores mined in China, etc.).

Tesla's cathode plants (under construction at the moment) could be a significant advantage. Also, with 4680 production and pack assembly done in house Tesla has an additional advantage.

As far as Anode goes, the best info I could find stated that approximately 20% of the battery materials value is anode, and that roughly 80% of anode comes from Chinese and Japanese processing, neither of which are in the Free Trade Agreement group. Novonix out of Tennessee is looking quite interesting as a domestic anode manufacturer and has Jeff Dahn as an advisor, so a potential connection to Tesla exists already.