@Gigapress posted something that I believe you'll find in the Moderator's Posts of Merit (whatever that thread is called). Sometime over the last 3ish months?
I don't remember the details - I remember part of the conclusion being that the benefit to Tesla may be so large that the entire IRA gets rescinded well before when the legislation is intended to end.
Here we go:
Earnings S-Curve . . . . . . at our Doorstep Analysts have consistently underestimated Tesla's earnings: Their consistent underestimation is difficult to understand. Tesla's earnings (EPS) have been somewhat linear over the past several quarters. The analysts would have been more...
teslamotorsclub.com
The concluding paragraph:
Since I was quoted I’ll respond. It should be noted there were a few errors in that first pass at estimating the law’s impact.
1) It’s more likely than not that Tesla won’t produce 40 GWh of storage next year. If you’re using my model as a starting point for short term estimates, especially if you think it’s likely Republicans will take over both Congress and the Presidency in 2024 and eliminate the subsidies in 2025, then you’ll probably want to revise those estimates down.
2) I did not account for Model Y initially being the only eligible model due to S/X/3 being excluded due to MSRP limits and the LFP cells being imported from China. The impact of the $7500 credit should therefore be cut approximately in half in the early years compared to my original estimate. Nevertheless I would still assume Tesla will eventually reduce prices and onshore battery production for 3 RWD to gain eligibility and also save costs and environmental damage of long-distance shipping.
3) The lower right corner of the table mistakenly shows a sum of sums for $2,200B total subsidy. $670B was actually the total estimate.
4) The initial estimates were way too conservative about Semi ramp. I didn’t have Tesla making 50k per year until 2030. Since then we’ve gotten guidance for achieving that rate around 2024.
5) Compounding the initial poor guess about Semi ramp is that I didn’t realize the Commercial Clean Vehicles credit would add as much as $40k extra per truck in addition to the $45/kWh for batteries. This approximately doubles the subsidy per truck.
Other notes:
The estimate is mainly a function of the estimates of Tesla’s growth and how much they make when at serious scale after like 2027, and this is inherently very uncertain. I just hypothetically showed what would happen if growth is roughly in line with Tesla’s public goals and if Tesla biases for growing faster here in the United States than elsewhere to capture these benefits that are, as far as I’m aware, uniquely huge compared to other primary EV and battery markets. No matter how I look at it, these subsidies are by themselves worth about as much as Tesla’s current market cap if Tesla can grow production remotely as fast as planned.
This did not encapsulate estimates of the benefits accruing to solar, mining and refining of critical minerals, charging infrastructure, because these are minor in comparison.
Overall, it remains true that the biggest single questions are how fast Tesla will scale in the USA and how long this law will last as-is, especially with most of the expected benefit to Tesla coming 5+ years from now when they’re producing at drastically higher scale than today.
