Cars are generally depreciating assets, so regardless of the path you take you're losing some amount of money. A monthly lease payment like this may work if somebody can't afford to buy the car outright or pay a more expensive rental that includes an asset (car) at the end. Or if they prefer a lower monthly payment so they can invest a bit of their money instead of tying it up straight away. There are definitely reasons, which is why people do it.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Cars are generally depreciating assets, so regardless of the path you take you're losing some amount of money. A monthly lease payment like this may work if somebody can't afford to buy the car outright or pay a more expensive rental that includes an asset (car) at the end. Or if they prefer a lower monthly payment so they can invest a bit of their money instead of tying it up straight away. There are definitely reasons, which is why people do it.
Yes, so I wonder about the seemingly imminent dry electrodes and improved electrolytes, plus 4680 packaging improvements that all suggest increasing energy density coupled with reduced mass in the structural packs.
Several comments from people who seem knowledgeable think that these developments link directly to increased production volumes and decreased cost. Specifically the SACMI press now being installed in the new Austin cathode building appears to portend very high speed powdered metal pressing, although we do not know the precise use, the location gives clues..
My question is directed to those who are qualified to assess the probability that we will see mass 4680 production still this year and also tge probability of cheaper cells and higher energy density. Consequently, then, does this mean there should be another advance similar in consequence to that if the structural pack and mega casting?
Many people can deduct lease payments as business expense, including nearly all small business and professional services. For those people it is often both cheaper and easier to lease. Under IRA, further, people who are ineligible for the tax credit because of income limits can still benefit because of leasing company passthrough.
In any event all cars, including Tesla, depreciate in normal times, aberrations during the prior few years were just that, aberrations.
2daMoon
Mostly Harmless
Didn't our TMC courtroom correspondent post something about one of the witnesses answering that he was approached and paid by the attorneys to be a shareholder in the case?
Without pointing fingers at TSLAQ, if so, this would lend a bit of an odor to whether whoever was behind the case were actual shareholders.
My philosophy, that I don't hesitate to share with young people, is buy used cars that you can easily afford until you've achieved a comfortable level of wealth. I bought new for the first time last summer at 57 years old. We, as a world and as a society, want a cleaner planet. We, as individuals need to do what's best for us. If that means buying an '82 Honda Accord, that spews out tailpipe emissions, do it.
SageBrush
REJECT Fascism
If that is the reason, why not take out a loan ?
- Bought cars can also be a business expense, IIRC as a per mile item instead of a depreciation. Is that a big difference ?
- I'm in the group that cannot take the full tax credit which is why I looked at the Tesla lease recently. Tesla is keeping the tax credit, insofar as paying over 50% for 3 years of use implies.
I've only read a couple of reasons to lease I consider understandable and rational
- The person wants to drive an unreliable money pit, like a German luxury car. Keeping a car like that past 3 years is a bad idea unless the driver is a DIY'r
- People who wanted to drive early EVs, and either wanted something better in 3 years, or were afraid of getting stuck with a bad car.
- Leases with attractive buy-out options. The person paid for the option to keep the car longer
- People who want a new car every 3 years and are willing to pay for the convenience of an easy turn-in
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2daMoon
Mostly Harmless
I think these examples demonstrate the point I was making. In each one the information was missing for the person because the question was not asked. They didn't know what they didn't know.
For this to be resolved they would either need to realize something in their knowledge was missing and ask, or, be led to the information by someone else realizing they didn't have enough information.
The idea of "paradigm-shift sensitivity" is a useful way of describing how to apply first principles to overcome cognitive dissonance when it has been brought to one's attention. But only if that same one is open-minded enough to allow for the possibility and pursue the matter to a logical conclusion.
An example of overcoming cognitive dissonance being the story of Columbus' ships being unseen by the island natives until they were led to look at where the waves were parting around the hulls, then some were able to see the ships.
Another, loosely, is Gordon Johnson, who feigns cognitive dissonance effectively enough to lend support to those with a TSLAQ mindset into standing strong in their perspective, regardless of the facts.
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2daMoon
Mostly Harmless
Wasn't the answer in the thing you quoted? Higher payments on the loan.
Artful Dodger
"Neko no me"
Business expense? Free to the individual. In Europe, its a taxable benefit, but still very attractive. EVs are also given preferential treatment for some tax breaks, ie:
Here's why a new $40,000 electric vehicle tax credit for business owners may be relatively easy to get
A tax credit for entrepreneurs who buy new electric vehicles or machinery doesn't carry many of the same restrictions that apply to consumers buying clean cars.
www.cnbc.com
Key Points:
- The Inflation Reduction Act, which President Joe Biden signed into law Aug. 16, created some new tax incentives to encourage the purchase of electric vehicles.
- A $7,500 tax credit for consumers carries many requirements for households and vehicles. But one for business owners, worth up to $40,000, doesn't have those restrictions.
- Medium- and light-duty trucks are "the fastest-growing fuel users and greenhouse gas producers in the United States," according to a 2019 Energy Department report.
*Ahem!*
As I was saying...https://teslamotorsclub.com/tmc/posts/7390878/ (Price hikes incoming!)
/cloudfront-us-east-2.images.arcpublishing.com/reuters/ZJ36PQA7UBJINHRS5TR6KHZDWI.jpg)
www.reuters.com
these guys don't leave money on the table, their fiscal acumen is the altar wherein lies my faith
As I was saying...https://teslamotorsclub.com/tmc/posts/7390878/ (Price hikes incoming!)
Tesla raises Model Y prices by $1,000 after U.S. relaxes tax credit terms
Tesla Inc raised prices in the United States of its best-selling vehicle, the Model Y, by $1,000 after the government raised the ceiling on the price of crossover electric vehicles eligible for tax credits.
www.reuters.com
these guys don't leave money on the table, their fiscal acumen is the altar wherein lies my faith
SageBrush
REJECT Fascism
You are right --- I looked at the Tesla website and the monthly loan payment for 6 years is 1.5x the monthly lease payment. . So in 9 years equal money has been paid out, but the buyer has a 9 year old car free and clear. That presumes no tax credit for the buyer.
ADDENDUM: And if the buyer is eligible for the full EV credit, the paid amounts between lease and purchase are even after 7 years 8 months.
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Artful Dodger
"Neko no me"
Tesla brought in-house this "Road Map" for future battery development with their acquistion of Maxwell Technologies in Feb 2019, paving the way forward in four (4) key areas:
- Energy Density
- Extended Battery Life
- Cost Reductions, and
- Battery Materials / Processing Tech
I think Tesla is simply following the development path adopted in 2019, which itself goes back to 2017. More about the original Maxwell battery deal in this article published 4 years ago today:
Tesla’s Maxwell deal is about lowering costs and keeping a battery moat | MarketWatch (Feb 04, 2019)
Battery Day was held in Sep 2020, 18 mths after the Maxwell acquistion, and layed out the broad strokes of Tesla's future battery plan. Today, we're seeing in realtime the first such battery machine being built in Texas. Cybertruck will be it's dramatic reveal, and embodiment.
Cheers!
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2daMoon
Mostly Harmless
True enough if taken to that extreme. But, you are unlikely to find any 9 year leases or 9 year loans. Though the advent of long lasting EVs could eventually lead to longer loan periods being offered.
I'd like to see a 9 year loan for an EV. The overall payout is likely much less than the cost of three leases over the same period and the monthly hit would probably be lower as well. Maybe X.com will be offering long-term loans on Teslas someday soon...
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SageBrush
REJECT Fascism
That is just the arithmetic. It would actually play out as 3 consecutive similar leases Vs a loan that lasted 6 years.
I added an ADDENDUM to my earlier post looking at the purchase case where the EV tax credit is fully utilized. Then the purchase price is covered by 7.7 years of lease payments.
I've read that car loans longer than 6 years are offered. People are hesitant to take them for a couple of good reasons: the increasing risk of expensive repairs, always having a car that has more money owed on it than its value, and the fear of being in an accident in a car 'underwater.' The apr is also higher, severely cutting into the monthly payment argument.
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Hiked prices on the Model Y and cut the Model 3 RWD*Ahem!*
As I was saying...https://teslamotorsclub.com/tmc/posts/7390878/ (Price hikes incoming!)
Tesla raises Model Y prices by $1,000 after U.S. relaxes tax credit terms
Tesla Inc raised prices in the United States of its best-selling vehicle, the Model Y, by $1,000 after the government raised the ceiling on the price of crossover electric vehicles eligible for tax credits.
these guys don't leave money on the table, their fiscal acumen is the altar wherein lies my faith
There are 600+ Model 3 inventory listings in the US right now about like 120 Model Y, seems likely there will be further tweaks to balance out the mix here
When the Seafood Restaurant menu says "Market Price", ya might wanna ask for that day.
There's one more. If the car can be used for business expense, there is no question about how much can be deducted.
Why not April 20, at 1:09am.Fun Fact:
I estimate that TMC's Perpetual Investors' Roundtable will reach* Comment #420,069 on Wednesday, April 26, 2023
#Predict
*Bonus pts for the hex2dec.
Krugerrand
Meow
True.
Except: What’s failed to be mentioned is that BEFORE the tweet the stock had already significantly (and mostly) risen due to the Saudi buying TSLA stock rumor (and owning >5%). Most speculators were already in at that point.
THEN Elon’s tweet happened and while the stock did rise some more, most of the rise had long since occurred due to the Saudi rumor.
THEN over the coming days, as Elon became aware of the hoops retail investors would have to or simply wouldn’t be able to jump through to own private company stock, and the outcry from those retail investors - only then did Elon change his mind and decide not to take Tesla private.
That’s the FULL truth of the situation.
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Nice, but the phrase “EV Market share” should be taken out and shot. Total vehicle market share is what counts and what Tesla is competing in.
It would be like dinging Apple in 2009 for its falling smartphone market share when in fact it was taking over the phone market.
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