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

[ShareLofty]

Trying to make some sort of sense of this but from what I’m seeing, the vehicle either needs to have a 3rd row, a certain ground clearance, or one other thing that I can’t remember. If it has one of those 3 things, it qualifies as SUV for the credit in the eyes of the IRS.

It’s beyond stupid but

They could have just followed the classification of each vehicle by the EPA but they chose not to. Treasury department knows a lot about cars

 

[Mark Alset]

Since the 7-seat Model Y AWD qualifies for the $7500 credit but the 5 seat does not, could Tesla simply sell a "$2k swappable rear seat" version in which the person who wants a 5-seat version a) Pays the extra $2k for a 7-seat Model Y but then selects to have the rear seat swapped out at the factory, and then b) receives a $2k refund from Tesla after delivery.

If the invoice lists that they paid for a 7-seat AWD, which they would submit for the tax credit, I don't see how the IRS could contest this strategy.

At the very least, given the slow pace of the government, it would take them time to crack down on this. In the meantime, Tesla can contest the guidelines and try to get the 5 seat AWD version listed as a SUV.

Tesla absolutely needs to do something to game these ridiculous IRS guidelines.

In many respects, this is exactly what the legacy auto companies are doing--creating a bunch of crappy, small battery hybrid versions of their ICE cars, so they can get a $7500 credit, knowing full well that most people will simply use these vehicles as ICE cars (i.e. never plug in).

 

[dhanson865]

Software disable the range and one of the motor, then drop the price down to 55k. I would disable the range down to 150 miles just so the incentive to restore the car to it's former glory via DLC is high. They did this in Canada with the SR+.

They are already using multiple pack types and multiple factories in the US. Just make a SR+ AWD under 55k. No software locks. I'll take it as is.

 

[Watts_Up]

They could have just followed the classification of each vehicle by the EPA but they chose not to. Treasury department knows a lot about cars

To add more to the confusion, it seems that Leasing allows getting IRA tax discount to vehicles not build in North America.

 

[mongo]

I think Elon's point is that the criteria for an SUV "is messed up." That's the house of mirrors but may have been required to get the votes, who knows. I'm grateful something was passed to helped fuel the EV industry, but that whole Hybrid favoritism was also part of the backroom negotiations no doubt.

To be frank, the 7 seat Y only qualifies due to the circa 2009 modification that included 3 row vehicles which was done to help them meet emissions/ economy requirements. It lacks the rest of the original attributes. Such as ground clearance.

So the 7 seater has the ground clearance?

Trying to make some sort of sense of this but from what I’m seeing, the vehicle either needs to have a 3rd row, a certain ground clearance, or one other thing that I can’t remember. If it has one of those 3 things, it qualifies as SUV for the credit in the eyes of the IRS.

It’s beyond stupid but

They could have just followed the classification of each vehicle by the EPA but they chose not to. Treasury department knows a lot about cars

EPA's system is not law, so, if challenged, it is harder to defend. Treasury can adjust though.

40 CFR § 600.002 - Definitions.
49 CFR § 523.5 - Non-passenger automobile.

 

[Watts_Up]

Since the 7-seat Model Y AWD qualifies for the $7500 credit but the 5 seat does not, could Tesla simply sell a "$2k swappable rear seat" version in which the person who wants a 5-seat version a) Pays the extra $2k for a 7-seat Model Y but then selects to have the rear seat swapped out at the factory, and then b) receives a $2k refund from Tesla after delivery.

This remind me how to circumvent the US chicken tax on pickup truck:

The strange case of Ford’s attempt to avoid the ‘chicken tax’​

Brand-new Ford Transit Connect vans, made in Spain, are dropped off at U.S. ports several times a month. ​

First, they pass through customs — and then workers hired by the automaker start to rip the vehicles apart. ​

The rear seats are plucked out. The seat belts in back go, too.​

Sometimes, the rear side windows are covered with painted plates. ​

Any holes left in the floor are patched over. ​

 

[Mark Alset]

This remind me how to circumvent the US chicken tax on pickup truck:

The strange case of Ford’s attempt to avoid the ‘chicken tax’​

Brand-new Ford Transit Connect vans, made in Spain, are dropped off at U.S. ports several times a month. ​

First, they pass through customs — and then workers hired by the automaker start to rip the vehicles apart. ​

The rear seats are plucked out. The seat belts in back go, too.​

Sometimes, the rear side windows are covered with painted plates. ​

Any holes left in the floor are patched over. ​

Yes, exactly! Planet Money on NPR released a nice segment about the Chicken tax a few years ago: Episode 632: The Chicken Tax.

I suspect Tesla could do something like this, except with the rear seats. It may be as dumb as them literally needing to install, then unistall them at the factory (or do the install - uninstall in a black box room of the factory where no one can see what goes on inside. If they do this correctly, to make thousands of swappable 7-seat AWD cars, they should need only one rear seat mounted to a robot in that black box room).

 

[StarFoxisDown!]

So here’s the information that I was looking for. Clearance needs to be raised 1.1 inches.

https://twitter.com/x/status/1609641385107533824

Tesla is by far the most nimble automaker maker….wonder how long it will take Tesla to adjust the manufacturing

 

[EVWatcher]

So here’s the information that I was looking for. Clearance needs to be raised 1.1 inches.

https://twitter.com/x/status/1609641385107533824

Tesla is by far the most nimble automaker maker….wonder how long it will take Tesla to adjust the manufacturing

What if the adjustment they make is selling it for 55k at high profit margin qualifying for the 7.5k discount and pricing the competition out of the market.

 

[Cosmacelf]

Tesla’s “Model Years” are a bookeeping thing at best. A 2021 Model Y made in December has more in common with a 2022 “Model Year” Model Y made in January than it’s 2021 counterpart …

When does Tesla’s “2021 Model Year“ production start and end?

When does GM’s “2021 Model Year“ production start and end?

Essentially we are comparing 20 different time periods with each other.

Yeah. That pie chart was interesting if only to show the dominance of Tesla. It would be interesting to do a proper pie chart using calendar year sales since that info should be available.

 

[sherwood2016]

What if the adjustment they make is selling it for 55k at high profit margin qualifying for the 7.5k discount and pricing the competition out of the market.

no room for FSD

 

[jerry33]

Tesla *does* have model years - every single vehicle they sell is deemed a certain model year for various legal (and reasonable) reasons. The fact that Tesla makes changes within the year more often than other manufacturers (which do also do minor mid-year changes) doesn’t remove the model year. There’s a lot wrong with that chart, but referencing a single model year is fine.

With Tesla, the changes may not be minor. e.g. different motor. While there is a model year to use with the DMV, it doesn't necessarily describe the car.

 

[StarFoxisDown!]

no room for FSD

I wonder if they could also do something like “Required 2 year monthly subscription to FSS”.

Wonder how the accounting would be done with that.

But realistically it’s probably much easier to just raise the suspension

 

[Watts_Up]

To be frank, the 7 seat Y only qualifies due to the circa 2009 modification that included 3 row vehicles which was done to help them meet emissions/ economy requirements. It lacks the rest of the original attributes. Such as ground clearance.

Why not offering the Model Y 5 seats (LR AWD or P) with air suspension for a $3k option to circumvent then the ground clearance?

 

[Stretch2727]

To add more to the confusion, it seems that Leasing allows getting IRA tax discount to vehicles not build in North America.

Leasing allows any EV to get the IRA credit regardless of price and income limits including Model 3, Y, S and X.

Biden admin quietly adds workaround, making pricey sports cars eligible for EV tax credits

The Biden administration released guidance Thursday showing that any electric vehicle would still be eligible for tax credits if leased despite the strict requirements for purchases.

www.foxbusiness.com

 

[StarFoxisDown!]

Why not offering the Model Y 5 seats (LR AWD or P) with air suspension for a $3k option to circumvent then the ground clearance?

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

 

[mongo]

So here’s the information that I was looking for. Clearance needs to be raised 1.1 inches.

https://twitter.com/x/status/1609641385107533824

Tesla is by far the most nimble automaker maker….wonder how long it will take Tesla to adjust the manufacturing

Angles will still fail, stock Y has 11.1 approach, 9.8 departure, unknown breakover. Needs two of: 28, 20, 14.
To hit departure (38.7 overhang, but angle is from tire radius), it needs to more like double the ground clearance.

 

[InTheMiddle]

85.2302 Definition of model year.

Model year means the manufacturer's annual production period (as determined under § 85.2304) which includes January 1 of such calendar year, provided, that if the manufacturer has no annual production period, the term “model year” shall mean the calendar year.


Old (depreciated) version
565.3
(j) Model Year means the year used to designate a discrete vehicle model, irrespective of the calendar year in which the vehicle was actually produced, provided that the production period does not exceed 24 months [later qualified to 2 calendar years].

TY @mongo! You were much faster than I at finding the spec links for model year determination, which the manufacturer then encodes into the VIN (IIRC Tesla encodes this is the 10th position). Very appreciated.

 

[Watts_Up]

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

Since a large majority of the Model Y discusions are dealing with the Model Y suspension stiffness,
and also the fact that Sandy Munro shown that the Model Y casting already have the capability to integrate air suspension hardware,
I think there would be a great interest to add such air suspension option, while this could cannibalize the Model S and X sales.

 

[MC3OZ]

Angles will still fail, stock Y has 11.1 approach, 9.8 departure, unknown breakover. Needs two of: 28, 20, 14.
To hit departure (38.7 overhang, but angle is from tire radius), it needs to more like double the ground clearance.

Fewer battery cells and less range seems like an easier fix. nothing else needs to change.

If Tesla can find some additional efficiency gains to offset the reduced range that will definitely help.