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

[SOULPEDL]

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.

This would be the shocker, then pump margins through software options and add ons. Offer lowest interest rate loans from all that cash piling up... so many ways to build the volume even higher in a cooling economy while maintaining reasonable margin. Who knows, right?

 

[cusetownusa]

I don’t know. Standard range would be the best option. Standard range AWD at 55k (and get incentive) and long range priced as is. If u want the best, gotta pay to play. SR AWD is plenty quick. And we don’t really know the capabilities of 4680. Maybe the accel boost unlock is ridiculous w 4680. Maybe there could be accel boost and range boost for 3k option, that can be purchased OTA.


Potentially it could be like:

SR 4680 AWD $55k. W $2k/3k range upgrade options.

LR Y dual motor for 62k.

LR Y dual motor w 3seater 68k w 7500 incentive.

The difference in price between the AWD and AWD LR would be $18,500. Demand for the LR would evaporate imo. People will only want to buy EVs that get the $7500. Except for people that aren’t eligible due to income.

 

[Watts_Up]

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

My primary understanding of the IRA credit was to protect US car manufacturers against the imported vehicles
who were still having the $7,500 credit untill getting the 200,000 vehicles sales.

And in paticular protect the US from the invasion of Chinese EV, like this alread happen in Europe.

But now, when Leasing the manufacturing location is not a criteria,
So any Chinese car starting with Volvo and Polestar would benefit from the IRA credit !!!!

 

[mongo]

Is there a way to find out who at the IRS worked on and approved these rules for SUVs to have a certain number of rows, capacity or height? I think they’d be more likely to respond if thousands of people emailed them rather than signed a petition.

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.

REGULATIONS AND GUIDANCE.—For purposes of this paragraph, the Secretary shall prescribe such regulations or other guidance as the Secretary determines necessary for determining vehicle classifications using criteria similar to that employed by the Environmental Protection Agency and the Department of the Energy to determine size and class of vehicles.

 

[MP3Mike]

Potentially it could be like:

SR 4680 AWD $55k.

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

 

[wipster]

Change org petition. It’s in a spoiler thing because I feel like somehow that’s the preferred way on this forum? I dunno.

Spoiler: Change.org petition

Sign the Petition

Fix the Inflation Reduction Act EV Tax Credit

www.change.org

Signed and pledged...

 

[StealthP3D]

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

Wasn't the other trigger if the vehicle was designed to function as temporary living quarters?

Rejoice! Model Y has had Camp Mode since it was introduced!

 

[Speedr117]

LEASING! It's considered commercial, and therefore doesn't follow any of the rules for sourcing, income, or price (as I understand them). This alone would solve a lot, since MOST BMW, Merc, etc. people just lease their cars/SUVs. Can you imagine a $599/month deal...

 

[Watts_Up]

Wasn't the other trigger if the vehicle was designed to function as temporary living quarters?

Rejoice! Model Y has had Camp Mode since it was introduced!

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.

 

[wipster]

I know Mathias and asked him not to publish my number on Twitter as this is not my area of expertise.
I am estimating/guessing 435k production and 427k deliveries.

Thanks mate! Your absence was obvious, but your answer here makes perfect sense.

 

[ByeByeJohnny]

Well, rough napkin math would have a doubling of EV demand annually for the next 10 years putting 2033 annual demand in excess of the entire population of earth if it helps any... that penny doubling thing really catches up after a while.

It was kinda a point to show how absurdly high the tax subsidies will quickly become. The US market did grow 100% from 2020 to 2021. Many other countries are still doing 50-100% growth even at already higher EV market share. Even using Teslas 50% growth goal for the whole market it will only take six or seven years for EVs to capture almost the whole US market.

Now, not all cars will qualify but if this runs to 2032 it could be 50 million cars qualifying. That would be almost 400 billion dollars in subsidies. That's a lot of billions if you have a significant market share. What's Teslas market share again?

Even if you think it'll only be half as many cars and a number of those bought by people that don't qualify it will still be in the hundreds of billions.

That's before the semis.

Then add all the batteries that are a separate subsidy. Which will possibly actually double for those 10 years.

Who thinks Elon will be better liked by "media" when "his" company gets hundreds of billions in subsidies? Because that's how it will be presented.

Other countries have started to eliminate or cut back subsidies when they get closer to 50% EVs. The US are likely to be there in 4-5 years.

My point, the IRA will not last in it's current form (whatever that is) for long.

 

[StealthP3D]

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.

This is the best idea, although it's not clear what you mean by "at high profit margin". Do you mean "at high volume"?

I do think margins would be more than acceptable at $55K although adding FSD at purchase would put it over the limit. This wouldn't matter for wealthy buyers who are over the IRA income limits and other buyers could simply add FSD after purchase.

What I like most about this plan is it seems like it could make the IRA such an expensive law to continue that, combined with the optics that it was also subsidizing gas-burners, it could make it very easy to gain bi-partisan support to either reform the act to only apply to BEV's or repeal it in its entirety. I have little doubt that EV adoption will happen as fast as raw materials bottlenecks allow, with or without the act. And, by subsidizing the sale and manufacture of gas/electric hybrids by $7500, the much higher volumes of PHEV's will slow BEV adoption by consuming huge amounts of the necessary batteries in what essentially amounts to gas cars.

Looked at in another manner: This amounts to the government paying legacy automaker customers $7500 to buy a gas car that the manufacturer has installed $2000 worth of batteries simply so Tesla cannot use them to make more EV's. I'm sad to say, but I think anyone who thinks the current incarnation of the IRA new vehicle tax incentives will accelerate adoption of BEV's is not looking at the big picture.

 

[JRP3]

I do disagree beacuse the vehicle definitions existed way before IRA was a thing (last update 2009).

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.

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.

 

[Beltsbear]

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

Sell RWD SR Y at $55k with choice of two colors. That alone would make huge volume and profitable. Also more sales could be made of 7 seat version without dropping cost at all. That alone Fills most production. If not, drop price of extra seats to $1000.

 

[TrendTrader007]

If P&D misses:
TSLA sells off Tuesday but probably finds bottom fast because at this time all the bad news is priced in (almost)

If P&D beats:
TSLA gaps up Tuesday and all clear

If P&D exactly as expected:

I don’t know

12 hours max and we’ll know
So I’ll save my breath for then

 

[Knightshade]

It was kinda a point to show how absurdly high the tax subsidies will quickly become. The US market did grow 100% from 2020 to 2021. Many other countries are still doing between 50-100% growth even at already higher EV market share. Even using Teslas 50% growth goal for the whole market it will only take six or seven years for EVs to capture almost the whole US market.

Now, not all cars will qualify but if this runs to 2032 it could be 50 million cars qualifying.

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.

 

[StealthP3D]

The amount of money tax payers are giving to Tesla will be used in the next presidential debate. I'm looking at roughly 7 billion.

That's the other reason I'm not a big fan of the IRA. It puts EV's in a negative light to those potential customers who like efficient and minimal government. I've been skeptical of the IRA since it first hit the scene. I wish it had been limited to incentives for mining raw materials and battery manufacture. That's what's going to displace fossil fuel vehicles, not purchase tax incentives.

 

[vikings123]

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.

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

 

[betstarship]

That's the other reason I'm not a big fan of the IRA. It puts EV's in a negative light to those potential customers who like efficient and minimal government. I've been skeptical of the IRA since it first hit the scene. I wish it had been limited to incentives for mining raw materials and battery manufacture. That's what's going to displace fossil fuel vehicles, not purchase tax incentives.

I agree. It's like they're piggy-backing off of the spearhead that Tesla is and has been for two decades and taking long-term credit for building an ecosystem.

 

[EVWatcher]

That's the other reason I'm not a big fan of the IRA. It puts EV's in a negative light to those potential customers who like efficient and minimal government. I've been skeptical of the IRA since it first hit the scene. I wish it had been limited to incentives for mining raw materials and battery manufacture. That's what's going to displace fossil fuel vehicles, not purchase tax incentives.

I don’t think voters understand the benefits to them as individuals to subsidize commercial battery storage. The EV purchase tax incentives are there so voters swallow the far more important bits.

If I’m honest I don’t think most of this forum even really understands what a shift to the was energy needs are satisfied would change with a large battery storage infrastructure in place. Myself included. Even without renewables it seems like the full magnitude of the impact hasn’t really been well describes or measured anywhere