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

[Nocturnal]

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

Can companies collect these credits? Amazon will be the sole buyer of those vans for a long time for sure.

 

[mongo]

Can companies collect these credits? Amazon will be the sole buyer of those vans for a long time for sure.

There is also a commercial credit.

 

[woodisgood]

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.

This is what I thought, but wasn’t sure if it got cut at the last minute. Because the solar sector is acting like the market suddenly had a conniption about something while EVs remain buoyant.

 

[TheTalkingMule]

And here come all the oil & gas CEOs celebrating "clean fuels" like hydrogen. We are gonna waste HUNDREDS of BILLIONS on these clowns.

Hilarious to see all this LNG govt spending too. You'd think guys who own NBA teams could afford to finance their own LNG infrastructure.

 

[larmor]

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

Yes they walk away without a car or their money.

 

[TheTalkingMule]

Good volume neuters the MMD today and we head further north. Nice!

Now when to sell my 8/12 $900c.....

 

[elasalle]

There is gonna be an arms-race to get the EV incentives ....
I think next GF kicks off in N.America ahead of schedule ... so maybe by Q3 earnings ...
Incentive is now there to speed up development of Semi, Van, Model Q, Bus .... (products we are not yet aware of )

 

[Usain]

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.

The devil is in the details. It's almost impossible to tell which batteries will qualify until the EPA writes the final rules.

According to my reading of the bill, the rules have to be published by the end of this year. Good luck EPA! I'd hate to be the one tasked with figuring this out by then.

 

[UncaNed]

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.

Unless this is only the first year's warranty costs, it means nothing. 2017 cars accumulated 4 more years of warranty repairs.

 

[thesmokingman]

Nvidia pre announce revenue which is a huge huge miss. Currently taking down tech with it for those who wants to know.

I love it. Nvidia eating their crow. They've been profiting off the crypto run vs traditional markets for so long now even when they said they didn't, so it's like orly?

 

[jabloomf1230]

Isn’t it wonderful that government can write such a comprehensive bill in clear, easy to understand language? What would be the point of writing a convoluted one, where people would have to discuss for days on end what it all meant and then afterwards walk away scratching their heads?

People continue to suck in every way imaginable. I noted Elon said Earth would be okay. He didn’t say people were going to be okay.

Next up, a 23 page instruction guide on how to boil wieners.

Actually, you can blame the SCOTUS partially for the bill's detailed EV language. The Court's recent restriction that it placed on USEPA with regard to state level caps on carbon emissions was based on the lack of specific language in the FCAA. If the language in the FIRA bill is deemed confusing, the rulemaking can clarify the intent, based on USEPA consulting with the US Congress.

 

[Electroman]

The problem with EV and Solar tax credits is they often don't end up delivering their main goal - spurring the industry to be self sustainable. The intention is, the OEMs and suppliers will use this as a lever to bring down costs over the period of the tax credits being available, and so if and when the credits expire they would have a mature market and mature supply chain to deliver their products at the same cost to the consumer even after the credits expiry.

But instead what we see happening - except other than Tesla - all OEMs line their pockets with the tax credits, and the manufacturing process or supply chain never matures, and they continue to simply depend on Asian companies for key components. So the only way the industry can sell their products is through Govt hand outs and fines.

The only exception to this has been Tesla.

 

[mongo]

Yes back to 30% and now battery storage is included

More backstory: Battery is currently included if done as part of a solar installation and the battery is only charged via solar. The new wording allows battery storage on its own and, by extension, load/ time shifting.

 

[StarFoxisDown!]

The problem with EV and Solar tax credits is they often don't end up delivering their main goal - spurring the industry to be self sustainable. The intention is, the OEMs and suppliers will use this as a lever to bring down costs over the period of the tax credits being available, and so if and when the credits expire they would have a mature market and mature supply chain to deliver their products at the same cost to the consumer even after the credits expiry.

But instead what we see happening - except other than Tesla - all OEMs line their pockets with the tax credits, and the manufacturing process or supply chain never matures, and they continue to simply depend on Asian companies for key components. So the only way the industry can sell their products is through Govt hand outs and fines.

The only exception to this has been Tesla.

Eventually though, Tesla's scale starts to force the issue.

Similar to what's going to happen with the hybrid part of this EV bill. Some legacy auto (cough Toyota) will be overjoyed to extend the viability of their hybrids. But in doing so, it will be fool's gold because their EV ambitions will suffer. Meanwhile, Tesla waits for no one and before Toyota will know it, the market will have made the full transition to EV, naturally phasing out hybrids due to no demand and Toyota will be in a position where Tesla will be at a scale of producing much more advanced EV's at a 4-5 million annual production rate at margins Toyota can't match and costs Toyota can't match.

Same thing will happen in Solar/Energy for anyone that tries to just sit back and collect some additional profit margin

 

[StarFoxisDown!]

Good volume neuters the MMD today and we head further north. Nice!

Now when to sell my 8/12 $900c.....

It's holding so far, but volume really started trailing off 20 mins ago. We'll find out MM's true intentions during this period with low volume and the macro's retreating.

 

[MadScientist23]

A question, has there been any communication from Elon/Tesla about a possible $25,000 Tesla model?

I think this issue came up after battery day only because there was a model in the presentation with a cloth draped over it, so the cheaper model became speculation. I do remember Elon saying a few years ago that there would not be a cheaper model to the Model 3 as autonomy would mean the Model 3 would pay for itself. He could have just said that to prevent the Osborne effect

Strategically, it would make sense if Tesla used a smaller model as a robotaxi only, and operate the fleet themselves (or with fleet partners). I dont want Tesla selling small robotaxis to people at $25k-$40k unless they are going to take 30% of the robotaxi receipts a la Apple store

you could argue that all they have to do is not allow outright purchase of FSD on that model, only allow subscription, by that then they get a portion of the profits of a robotaxi. Obviously in this the subscription cost would go up a lot to balance it.

 

[AudubonB]

At a first stab, the solar AND the battery (about which those of us who live off grid are absolutely giddy) incentives suggest a huge miss: unlike the treatment provided to the auto industry, it appears to me there is no comparable Domestic Content feature.
I’m very happy with my latest batteries, but they’re from a Dutch company, and manufactured in China. It oughtn’t have to be that way.

 

[StarFoxisDown!]

July CPCA numbers come out at 10 am tomorrow Beijing time.....so 7 pm tonight pacific time (I think I got that right....still need coffee)

 

[Discoducky]

House vote is expected Friday, per this Pelosi statement, but I'd expect there to be changes prior to a vote.

Senate passes Inflation Reduction Act; House to vote next

The Senate passed the Inflation Reduction Act along party lines, 51-50, handing Democrats a crucial legislative win as the midterm cycle ramps up.

abc7.com

"The president urged the House to pass the bill as soon as possible. Speaker Nancy Pelosi said her chamber would "move swiftly to send this bill to the president's desk." House votes are expected Friday."

 

[TheTalkingMule]

The problem with EV and Solar tax credits is they often don't end up delivering their main goal - spurring the industry to be self sustainable. The intention is, the OEMs and suppliers will use this as a lever to bring down costs over the period of the tax credits being available, and so if and when the credits expire they would have a mature market and mature supply chain to deliver their products at the same cost to the consumer even after the credits expiry.

But instead what we see happening - except other than Tesla - all OEMs line their pockets with the tax credits, and the manufacturing process or supply chain never matures, and they continue to simply depend on Asian companies for key components. So the only way the industry can sell their products is through Govt hand outs and fines.

The only exception to this has been Tesla.

In states with the highest residential solar subsidies, all we saw was 3rd party marketing rush in to devour all the rebates and tax credits. The market didn't really mature, if anything it's the opposite.

Competition gets so heated in these markets that disinformation is all you get when trying to research solar. For most homeowners this means a couple days/weeks of effort before they give up entirely. Now we have a $2.5B (<-- B) market in this country, not for residential solar installers since none of them really make a profit, but for residential solar sales commissions.

Who ever heard of $2.5B in customer acquisition costs for something everyone already wants?

Hopefully this 30% credit will help push the whole market toward maturity. The bloated and annoying 1-to-1 sales process needs to be defeated first.

The only exception to this solar sales process of course being......Tesla.