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

[TSLA Siempre]

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?

I drive a Tesla and I know EV's have lower operating costs than ICE. That is very different from a large fleet operator confirming from real world experience that their costs are 50-60% less (which would obviously be a big deal). I'm willing to believe it, but I'd like to confirm that from the source rather than blindly believe stuff printed on a random website. And just FYI, this is the Q2 2022 call transcript:

Hertz Global : Q2 2022 Transcript

REFINITIV STREETEVENTS EDITED TRANSCRIPT HTZ.OQ - Q2 2022 Hertz Global Holdings Inc Earnings Call ...

www.marketscreener.com

I don't see reference to the 50-60% less cost. If someone can find this verified by the Hertz management team elsewhere, I'd be delighted.

 

[MXWing]

I don't think the marginal cost of building a 7 seat Model Y over a 5 seat is $3000.

Worst case, Tesla can just make every Model Y a 7 seater and raise the price over the 5 seater by 1,000-1,500.

The IRA classification rules are stupid without rhyme nor reason but Tesla has a realistic workaround.

Mach-E however is SOL. If anything, we can count on Ford to get the rules relaxed. Biden not listening if the complaint comes from Elon.

 

[Tim S]

P&D release dates and times from previous quarters.
Prepared by Troy:
View attachment 891170

That chart is missing the 4 most recent quarters. Last year and last quarter were both announced between 12:30-1:00 PM EST.
Source is googling electrek's stories; they have a time stamp, e.g.

 

[TSLA Siempre]

I don't think the marginal cost of building a 7 seat Model Y over a 5 seat is $3000.

Worst case, Tesla can just make every Model Y a 7 seater and raise the price over the 5 seater by 1,000-1,500.

The IRA rules are stupid but there is a very realistic workaround.

Mach-E however is SOL. If anything, we can count on Ford to get the rules relaxed. Biden not listening if the complaint comes from Elon.

yep. 100%. a lot of unjustified grievance and victimhood on this issue. i'd be way more annoyed if I was Ford than Tesla.

 

[Ogre]

Here’s the video of the IRS test route to determine if an EV is an SUV or not. If only the Model Y had made that last turn without putting 2 kids in the backmost seat for added traction we wouldn’t be having this issue.

https://twitter.com/x/status/1609650824875237376

 

[MartinAustin]

I guess word is out that moderators aren’t going to be paying as much attention to this thread.

We’ll all have to make more judicious use of the ignore function I guess.

I was able to put dropstools quickly on ignore

 

[StealthP3D]

I drive a Tesla and I know EV's have lower operating costs than ICE. That is very different from a large fleet operator confirming from real world experience that their costs are 50-60% less (which would obviously be a big deal). I'm willing to believe it, but I'd like to confirm that from the source rather than blindly believe stuff printed on a random website. And just FYI, this is the Q2 2022 call transcript:

Hertz Global : Q2 2022 Transcript

REFINITIV STREETEVENTS EDITED TRANSCRIPT HTZ.OQ - Q2 2022 Hertz Global Holdings Inc Earnings Call ...

www.marketscreener.com

I don't see reference to the 50-60% less cost. If someone can find this verified by the Hertz management team elsewhere, I'd be delighted.

Here's the relevant quote:

On maintenance, I think Kenny said to you, we are running kind of 50% to 60% of what maintenance costs are on ICE vehicles. That's roughly in line with where we are. If there's any one surprise, it's probably slightly higher expense on tires, but not much more, and that's embedded in the figure I'm giving you.

Found on the Hertz Q2 earnings transcript here:

https://docs.publicnow.com/viewDoc?hash_primary=F71F2404AE192B91D5085D2750B495BD7BADF304

It's not clear why you think a rental fleet operator would not confirm this. This is the kind of statement that you can just believe without having to track it down because:

1) It doesn't conflict with anything. It's not surprising, it's actually expected a rental fleet operator would want to highlight their savings.

2) Even if the article was wrong, and Hertz never said it, it wouldn't matter, because we know EV's have lower maintenance costs of roughly that magnitude.

 

[MP3Mike]

Found on the Hertz Q2 earnings transcript here:

https://docs.publicnow.com/viewDoc?hash_primary=F71F2404AE192B91D5085D2750B495BD7BADF304
It's not clear why you think a rental fleet operator would not confirm this. This is the kind of statement that you can just believe without having to track it down because:

1) It doesn't conflict with anything. It's not surprising, it's actually expected a rental fleet operator would want to highlight their savings.

2) Even if the article was wrong, and Hertz never said it, it wouldn't matter, because we know EV's have lower maintenance costs of roughly that magnitude.

Right like in August when this was discussed that confirms that the article is wrong. It is 40-50% savings.

 

[dl003]

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...

I like this quote a lot

“Never attribute to malice that which is adequately explained by stupidity.”

But in this case, this one gets it

"If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.”

I, for one, wasnt part of the consensus here, if there ever was one.

When Biden left Tesla out from his White House invitation, I said “optics.”

When Biden said GM lead and others still said “optics”, I said “lies.”

When the bill was drafted to give hybrids and Union thousands and others said “This is a huge win gor Tesla”, I said “corruption.”

Now that they are coming after Tesla’s best selling model, I see some people are still choosing to believe we are not being targeted.

Its been getting worse and worse. Just wait till they find a way to screw with the 3.

 

[StealthP3D]

Right like in August when this was discussed that confirms that the article is wrong. It is 40-50% savings.

It just goes to show you can't trust journalists to get the details correct!

 

[Artful Dodger]

Probably much easier and faster to stop the manufacturing lines to manually raise clearance than redesigning to add air suspension

That makes the car less efficient due to higher aerodynamic drag, and more susceptible to roll-over due to the increase CoG. Both of these items likely mean the vehicle may have to be retested by the EPA for energy efficiency and by NHTSA for safety.

No, the only reasonable way to vary the ride height is with an air suspension. That's likely 6+ mths to spool up the supplier's / logistics train, and that's IF there's a design ready to go today.

Biff.

 

[Beltsbear]

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).

Tesla will get more of the money coming from this bill than anyone else. It is clearly not meant to ”hamstring“ Tesla. It is meant to make a battery supply chain in America and rewards that heavily.

that does not mean the bill is not a piece of crap. But it is in no way a tool against Tesla. The $40 per kWh part is amazing for Tesla.

 

[EQC_]

I don't post often, but something has struck me as a possibility...correct me if I'm wrong, but maybe a work-around with minimal cost and big gain for Tesla?

I'm thinking that Tesla's multiple-continent manufacturing of (nearly) identical cars could help them solve the two main concerns I see being discussed. My idea:

*If* Tesla can set up a leasing arrangement to get around the foreign manufacturing limits intended in IRA, could Tesla ship SR 3's and Y's from Shanghai to the US for lease only?

*Or* if there is a tariff issue from China, could shipments of SRs come from Berlin to the US? And Tesla could back-fill Europe with added Shanghai production as needed.

There have been theories about demand problems for Tesla in China...and while going this route would have some logistics/shipping costs, and maybe small changes to manufacturing, it would mean that production not needed within China could either go to the US directly, or to Europe to back-fill demand left by shipping cars from Berlin to the US.

SRs only, lease only for cars shipped into the US.

Fremont and Austin could produce whatever models that meet the $55,000 and $80,000 limits (with 7 seats as needed), getting added credits for US made batteries.

Probably some things I'm missing...but seems like a possibility to address both IRA oddities and any local demand issues due to China's economy.

Since it's "lease only" Tesla can simultaneously blame the odd IRA rules that other non-US manufacturers can use, and wink about keeping their intention not to *sell* Shanghai cars in the US.

 

[30seconds]

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.

So rather than thinking a bunch of government bureaucrats did the easiest, most straightforward, thing by using the current classification you believe that they went through a process of evaluating all the options and decided to take the one that specifically excluded the Model Y and Mach-E?

 

[AndrewZ]

That makes the car less efficient due to higher aerodynamic drag, and more susceptible to roll-over due to the increase CoG. Both of these items likely mean the vehicle may have to be retested by the EPA for energy efficiency and by NHTSA for safety.

No, the only reasonable way to vary the ride height is with an air suspension. That's likely 6+ mths to spool up the supplier's / logistics train, and that's IF there's a design ready to go today.

Biff.

I think people are going way overboard with this, some of it is baked right into the tables: the Audi, BMW, etc don't automatically get -$7,500 because they fit under the price cap, that's only the first hurdle.

All of these solutions to the SUV crisis also need to coincide with actually satisfying both halves of the credit's rules when fully implemented, and I think just getting the full $7,500 in large production numbers will likely be the real challenge with the current state of the supply chain (which is the actual target of this legislation).

People are frantically coming up with answers as if Tesla could flip a switch and every 2023 Y 5 seater rolling off the line would qualify for the full $7,500, but we're probably talking about mostly a $3,750 credit from the IRS.

By the end of this year, a vehicle will be disqualified from both halves of the credit if it contains any battery components coming from China, Russia, Iran, or North Korea.

By the end of next year, a vehicle will be disqualified from both halves of the credit if it contains any battery minerals coming from China, Russia, Iran, or North Korea.

Stuff like this will be the real hurdle to jump in even getting the credit at all regardless of MSRP

 

[StealthP3D]

So rather than thinking a bunch of government bureaucrats did the easiest, most straightforward, thing by using the current classification you believe that they went through a process of evaluating all the options and decided to take the one that specifically excluded the Model Y and Mach-E?

Wake up! The reason no one saw this coming was because the Act requires the Treasury to use "criteria similar to that employed by the Environmental Protection Agency and the Department of the Energy to determine size and class of vehicles." Because the EPA already classifies the Model Y as an SUV, it was just assumed by the investment community that the Model Y would be in the same $80K category that applies to other SUV's. But the Treasury cherry-picked the direction given to them by the IRA by using a different, more outdated, classification scheme, one that obviously doesn't include the Model Y and goes against the spirit of the law that Congress voted on.

Calling the classification scheme selected by the Treasury "the current classification" falsely implies there is only one classification scheme they were directed to base their rulemaking on and is intellectually dishonest. Unless you mistakenly believe there is one, and only one classification scheme they were directed to base their rulemaking on. In that case you would simply be misinformed.

Billions of dollars are on the line so I would suggest that anyone who believes this was inadvertent is more than a little naive. Wake up!

 

[Maarten]

When the rules were being made for the $7.500 tax credit, I do not believe that they didn't, at the same time, have a look at the list of cars that would qualify.
Also somebody must have said: "Wait, the best selling all-electric Tesla Model Y doesn't qualify?"
The question is what happened next: a pensive face at the head of the table, followed with "I don't care, they already sell enough. No stimulation needed.", or... just a big grin from that same place at the table?

 

[Artful Dodger]

Except for people that aren’t eligible due to income.

And those are the people who will lease.

 

[TSLA Siempre]

Here's the relevant quote:



Found on the Hertz Q2 earnings transcript here:

https://docs.publicnow.com/viewDoc?hash_primary=F71F2404AE192B91D5085D2750B495BD7BADF304

Cool. Thanks.

It's not clear why you think a rental fleet operator would not confirm this. This is the kind of statement that you can just believe without having to track it down because:

1) It doesn't conflict with anything. It's not surprising, it's actually expected a rental fleet operator would want to highlight their savings.

2) Even if the article was wrong, and Hertz never said it, it wouldn't matter, because we know EV's have lower maintenance costs of roughly that magnitude.

Trust, but always verify.

 

[EVWatcher]

And those are the people who will lease.

The two of the three teslas I own since before tesla stopped qualifying for the old program say otherwise.

Why you ask? Ya maybe I bought into robotaxis artiving earlier than they have. But I don’t regret it. Love these cars