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

[ShareLofty]

At the risk of repeating myself.
Treasury is just reusing the existing classification legislation, CFR 40 600.002 to be specific.
They are not required to use that criteria, however.

If this existing classsification language has existed for 10 years then why didn’t anyone see this coming? No one in the last six months has brought up any of these scenarios where certain two row SUVs would qualify for the full credit while others are denied because they aren’t lifted enough

 

[StealthP3D]

It does say: https://home.treasury.gov/news/press-releases/jy1179

• FAQs for consumers on the clean vehicle tax credits that will help them better understand how to access the various tax incentives for the purchase of new and used electric vehicles available beginning January 1. These FAQs include a link containing a list of clean vehicles that manufacturers have indicated to the IRS meet the requirements to claim the new clean vehicle tax credit beginning January 1, 2023. This list will be updated over the coming days and weeks so consumers looking to purchase a new clean vehicle in the new year should be sure to check it regularly.

And I assume there will be complaining by lawyers, politicians etc who want to get some small wins here and there. They are stupid, but they do have some [weak] feedback mechanisms.

That's the oldest trick in the book to discourage taking immediate action against new rules. Tell people they will be changing/improving in the future. Don't worry, it's not final yet. You don't need to do anything, there is still hope.

Don't get me wrong, Tesla is very good at navigating opportunities and challenges, and they will not hesitate to think outside the box and consider all options. I have no doubt they will arrive at the optimal solution that considers everything, including long-term residual effects, public perceptions and the fact that the rules can, and likely will change in unknown directions. Tesla will be fine, I just don't like to see my own government used in such a nefarious and idiotic manner when it comes to such important issues of our day that have such far-reaching impacts. I don't like to see inefficient producers rewarded and put on life support, using tax-payer funds, because that harms our economy and thus all of us.

 

[dl003]

Too late as there’s petitions being created and videos being made of the corruption and injustice

I think its better to call it out at this stage, even if the people in charge are wrongly accused as corrupted, than to place faith in the govenment to self-correct. After all, if you are in charge of allocating tax money and making an eggregious mistake, you should be in prison. My motto has been if you let them take what you can afford to lose, sooner or later they’ll come for what you can’t.

 

[ZeApelido]

So much anger over the IRA on this Sunday.

It’s amazing that Bono and U2 had the prescience to write a song about it 40 years ago.

 

[garrett5688]

include giant removable paper weight in the trunk to put MY over the weight requirement. Done.

 

[JusRelax]

I think its better to call it out at this stage, even if the people in charge are wrongly accused as corrupted, than to place faith in the govenment to self-correct. After all, if you are in charge of allocating tax money and making an eggregious mistake, you should be in prison. My motto has been if you let them take what you can afford to lose, sooner or later they’ll come for what you can’t.

In addition to this, I think it's important to not allow the letter of the law to defeat the purpose/spirit of the law. The whole point of the law is to increase clean energy manufacture/usage in North America. Allowing gas guzzling hybrids with 20-30 effective mpg that more than half of the time will not even utilize their electric batteries while not allowing a fully electric Model Y to get any rebate is not within the spirit that the law was created for in the first place.

 

[jerry33]

In addition to this, I think it's important to not allow the letter of the law to defeat the purpose/spirit of the law. The whole point of the law is to increase clean energy manufacture/usage in North America. Allowing gas guzzling hybrids with 20-30 effective mpg that more than half of the time will not even utilize their electric batteries while not allowing a fully electric Model Y to get any rebate is not within the spirit that the law was created for in the first place.

That’s more the wishful thinking of what the spirit of the law is. The real spirit of the law is to promote legacy auto and hamstring Tesla until legacy can catch up (that’s not likely to happen fortunately).

 

[JusRelax]

That’s more the wishful thinking of what the spirit of the law is. The real spirit of the law is to promote legacy auto and hamstring Tesla until legacy can catch up (that’s not likely to happen fortunately).

Correct - I should have specified the "publically stated" spirit of the law.

 

[StealthP3D]

I looked at the article and it seemed to imply that this "50-60% cheaper" was in the Q3 call. There is no direct quote from the Hertz CEO about it. I then looked at the Q3 2022 Hertz call transcript and can find no reference to it.

Hertz Global Holdings, Inc. (HTZ) Q3 2022 - Earnings Call Transcript

Hertz Global Holdings, Inc. (NASDAQ:NASDAQ:HTZ) Q3 2022 Earnings Conference Call October 27, 2022 8:30 AM ETCompany ParticipantsJohann Rawlinson - VP,...

seekingalpha.com

Is there some other source to back up this article's claims?

According to this article:

Hertz says Tesla fleet of rental EVs are 50 pct cheaper to maintain than fossil fuel cars

Rental car giant says it’s making 50-60% savings on maintenance costs with its recently acquired Tesla fleet compared to fossil fuel cars.

thedriven.io

the findings were released on an earnings call that took place on Monday, August 1, 2022. That would probably put it on the Q2 2022 earnings call (without checking it myself).

Does it surprise you that EV's cost 50-60% less to maintain than ICE cars or that Hertz would promote that finding? Do you drive EV or ICE?

 

[Knightshade]

include giant removable paper weight in the trunk to put MY over the weight requirement. Done.

They'd also have to redo all EPA efficiency testing with the extra weight, and all safety agencies everywheres safety testing with the extra weight-- and reduce the published range, published cargo capacity (a big one for someone shopping a small SUV on specs) and deal with possibly lower safety scores accordingly.

 

[StealthP3D]

I think a vehicle to be classified as temporary quarter must provide cooking, restroom, and shower.... or something of that nature.
I just try to remember how loans for Recreational Vehicles, could be considered like a morgage by the IRA and been Tax deductable.

Well, how much more could it cost to add an alcohol stove, a folding toilet seat with attachable plastic bags and a solar shower?

 

[capster]

I hope that Tesla bought calls last week for the $5-$10 billion buyback that Musk said on the last earnings call might happen next year (meaning this year, 2023).

 

[ByeByeJohnny]

It really, really couldn't.

The highest # of of all light vehicles of all types (cars and light trucks)- sold in the US in any year, ever, was about 17.5 million (and that was 2016, it's been a little lower ever since even ignoring the covid years)

There won't be even half the # of total vehicles sold in 2032 as you suggest (and it's unclear if they'll be 100% EVs by then either as slowly as others are scaling, though surely a majority till be)- and with total # of vehicle sales generally declining as fewer people drive (a trend already ongoing, and would be greatly accelerated should robotaxis ever become at all common) on top of people are keeping cars longer ,it's possible it won't even be 1/3rd your suggested number in total US light vehicle sales for the year.



All that said- I agree with the general point the IRA is unlikely to run as long as the original passed law suggests, nor to be as cheap as the original markup estimates suggest... cost will likely be hilariously more as EVs share of the total market scales... but at this point an extra couple hundred billion against a debt already north of 30 trillion with a T and expected to be north of -45 trillion with a T- by 20232 is, well, more than a rounding error, but not THAT much more.

A third of 40 million? That's way less cars than Tesla alone will make in the US the next 10 years.

These numbers include hybrids but for now they are eligible and after the first couple of years their share will be insignificant. Lets do this with 50% growth which pretty much every country has managed for several years after being where the US are now.

2022 1.000 million EVs (or close)
2023 1.500 million
2024 2.250 million
2025 3.375 million
2026 5.062 million
2027 7.594 million
2028 11.390 million
Lets assume the growth stops here either because the market become smaller or the last few million of ICE buyers are reluctant to stop buying them.
2029 11 million
2030 11 million
2031 11 million
2032 11 million

Total 2023-2032 75 million cars

Now, one can debate how many of those will be eligible. For price or income. But it will be a significant share of those.

Yeah, I'm not a believer that robotaxis will have a significant impact on the number of new private vehicles sold for the next decade. It will eventually but even if it starts becoming useful in say five years (there goes half of any potential positive reactions) it'll take most or even all of the decade to have a serious impact.

I guess if inflation remains high enough that will take care of the problem as many fewer models will be able to stay under the tresholds.

I know you will absolutely never ever give up a discussion no matter what so for the benefit of others I will not continue past this post.

 

[StealthP3D]

You're going to have to keep repeating yourself because apparently some people can't let go of the conspiracy theories no matter how often you prove them wrong.

This misses the point. While it's true that the Treasury Dept. did select a pre-existing vehicle classification system to apply their price cut-offs to, it was not the only vehicle classification available, and they were not prohibited from adjusting them to suit the intent of the Act, that does not mitigate the fact that they chose the ones they did and chose to not adjust them in any manner. Their options under the Act were literally endless.

Given those facts, the fact that they picked an existing classification system to apply their price cutoffs to, is not persuasive in terms of convincing anyone the rules were not gerrymandered in a highly biased manner. Anyone claiming that this disproves "conspiracy theories" just reflects poorly on their intellectual honesty or their ability to make valid deductions.

 

[StealthP3D]

If this existing classsification language has existed for 10 years then why didn’t anyone see this coming? No one in the last six months has brought up any of these scenarios where certain two row SUVs would qualify for the full credit while others are denied because they aren’t lifted enough

Exactly! Because the rule makers at the Treasury had wide latitude to write rules to meet the stated objectives of the Act and yet they failed to do so.

 

[Ogre]

No good, as any options would disqualify it. It would have to be under $50k to leave room for options.

So a lot of Teslas ship With White or Gray with the stock Aero wheels…

What’s the problem? They don’t need to leave room for options.

 

[Artful Dodger]

The Plug-In Hybrid with the worst EPA rating for MPGe gets the full $7500 IRA subsidy as an SUV, as well as the highest percentage discount off of MSRP:

Farzad Mesbahi on Twitter: "Tesla is getting screwed. Hard. Here's a chart that outlines the complete absurdity of the IRA EV Tax Credit. Source: https://t.co/dn8o92CBVw @elonmusk @MartinViecha @Sen_JoeManchin @POTUS $TSLA https://t.co/wmOtvtpMid" / Twitter​

​

Meanwhile, under the Treasury interpretation of the same set of EPA rules, the 5-seat Tesla Model Y is less "SUVish" than a Ford Escape Plug-in Hybrid, so doesn't qualify for the subsidy. Biff!

Told you so.

EDIT:

Elon Musk on Twitter: "@farzyness @MartinViecha @Sen_JoeManchin @POTUS This is messed up" / Twitter​

Which I take to mean that there's no magic bullet/air suspension ready for Model Y 5-seater.

 

[vikings123]

This misses the point. While it's true that the Treasury Dept. did select a pre-existing vehicle classification system to apply their price cut-offs to, they were not the only vehicle classifications available, and they were not prohibited from adjusting them to suit the intent of the Act, that does not mitigate the fact that they chose the ones they did and chose to not adjust them in any manner. Their options under the Act were literally endless.

Given those facts, the fact that they picked an existing classification system to apply their price cutoffs to, is not persuasive in terms of convincing anyone the rules were not gerrymandered in a highly biased manner. Anyone claiming that this disproves "conspiracy theories" just reflects poorly on their intellectual honesty or their ability to make valid deductions.

The government clearly does not like Tesla so I agree with you that conspiracy theories should not be ruled out.

However in this specific case the uproar should be about hybrids getting more favorable treatment. What we are seeing is Tesla influencers twisting facts to suit their narrative which is exactly the same thing we accuse MSM of.

In that sense I like Rob’s petition way more than what a former Tesla employee created today. The other thing that is bothersome to me is, based on Elon’s response today, Tesla being surprised by this classification. You would think the company would have some connections. Or maybe they do and Tesla has a plan and Elon is just having some fun.

 

[Xepa777]

Prediction: tesla beats production and delivery numbers by a healthy amount, but mainstream media comes in during the coming weeks and say that’s only because of EOY discounts and FUDs Tesla margins.

 

[InTheMiddle]

If this existing classsification language has existed for 10 years then why didn’t anyone see this coming? No one in the last six months has brought up any of these scenarios where certain two row SUVs would qualify for the full credit while others are denied because they aren’t lifted enough

Exactly! Because the rule makers at the Treasury had wide latitude to write rules to meet the stated objectives of the Act and yet they failed to do so.

No need to see conspiracy theories, or even antagonism...the most likely reason why it wasn't discussed on this forum is simply because until the draft proposed guidelines were released, no one on this forum spent the time to properly research the various classification schemes in depth to truly understand the range of possibilities. There was a general consensus here that matched what many here wanted the outcome to be, and humans typically question things less when they are hearing the answer they want to be true...