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

[Cosmacelf]

So, in light of these price cuts, just how ramped up are Austin and Berlin right now and into the near future?

 

[wipster]

Could the $7500 be applied to capital gains tax on a sale of stock or when converting an IRA to a ROTH IRA?

The capital gains tax, probably... it is taxable income. Conversation to Roth? No idea.

 

[wipster]

So, in light of these price cuts, just how ramped up are Austin and Berlin right now and into the near future?

Also, I wonder how much Tom Zhu had to do with the pricing decision? He does have a lot of experience with price reductions and their effects in China...

 

[Motor Mouth]

So, in light of these price cuts, just how ramped up are Austin and Berlin right now and into the near future?

Right? Definitely this is the key question. It certainly telegraphs the possibility that supply constraints are going to loosen up this quarter. While I've been strongly disappointed in the pace of both new GFs all will be forgiven if they're ready to fly now.

 

[Curt Renz]

Tesla (TSLA -0.9%) dipped a bit after announcing large price cuts on its cars sold in the US and Europe, ostensibly to make them eligible for government rebates. Its large profit margins allow this. However General Motors (GM -4.7%) and Ford (F -5.3%) dropped more significantly, as having to match the price cuts may make their EVs unprofitable. Looks like a foxy move by Tesla.

 

[AndrewZ]

The IRA cannot last in it’s current form for more than a couple years. It is founded on assumptions that what GM and Ford are capable of is representative of the EV market. Just back of the napkin, the IRA will likely be gifting $2b to Tesla buyers and Tesla indirectly this year alone (Half via the consumer credit and half via manufacturing credits). Next year it’ll be more like $3-5b. It only gets crazier from there.

It might not even survive the year.

Haven't dug into the manufacturing credits myself, but I have a pretty conservative view of what these credits will mean for consumer discounts in the new year and beyond.

Posted this in another thread, it's my interpretation of what will be required to qualify for the credits

So a vehicle needs the following to qualify for the credit in 2024 as a "Point of Sale" discount:

• Zero battery components from China, Russia, North Korea, or Iran.
• 50% of the value of critical battery minerals from the US or a country with a free-trade agreement with the US.
• 60% of the value of battery components from the US or a country with a free-trade agreement with the US.

A vehicle needs the following to qualify for the full credit in 2025:

• Zero battery components from China, Russia, North Korea, or Iran.
• Zero critical battery minerals from China, Russia, North Korea, or Iran.
• 60% of the value of critical battery minerals from the US or a country with a free-trade agreement with the US.
• 60% of the value of battery components from the US or a country with a free-trade agreement with the US.

Assuming the Treasury doesn't tweak any of these things and I'm interpreting the text properly, these sourcing requirements become extremely onerous next year with the point-of-sale discount and I think fewer vehicles will qualify for the credit at all much less the full credit.

By 2025, well I don't know if anyone will be able to manufacture an EV battery in two years without any critical minerals from China. If it's possible, I'd expect them to be few and far between. The US currently produces a whopping nadda of some of these critical minerals, graphite being one I've researched recently and from what I can tell is 80-90% controlled by China and North Korea. I think Australia might have a new graphite mine just coming online now and has a free-trade agreement with the US, however I'm not sure about the logistics of shipping graphite to the US from Australia.


But maybe I'm off base and my interpretation is inaccurate.

 

[vikings123]

Could the $7500 be applied to capital gains tax on a sale of stock or when converting an IRA to a ROTH IRA?

Pretty sure the answer is no for both capital gains and ROTH conversion.

edit: Maybe Roth conversion is ok based on the clarification from @MikeC below.

 

[M|S|M MYP]

Man, WS and MSM took all day to figure out what this thread did by 2 am.

SSShhhhhh... @ZeApelido might really be Melissa Lee or Joe Kernen

 

[MikeC]

Pretty sure the answer is no for both capital gains and ROTH conversion.

Converting an IRA to a Roth is like income so that would count.

 

[Cosmacelf]

Haven't dug into the manufacturing credits myself, but I have a pretty conservative view of what these credits will mean for consumer discounts in the new year and beyond.

Posted this in another thread, it's my interpretation of what will be required to qualify for the credits


Assuming the Treasury doesn't tweak any of these things and I'm interpreting the text properly, these sourcing requirements become extremely onerous next year with the point-of-sale discount and I think fewer vehicles will qualify for the credit at all much less the full credit.

By 2025, well I don't know if anyone will be able to manufacture an EV battery in two years without any critical minerals from China. If it's possible, I'd expect them to be few and far between. The US currently produces a whopping nadda of some of these critical minerals, graphite being one I've researched recently and from what I can tell is 80-90% controlled by China and North Korea. I think Australia might have a new graphite mine just coming online now and has a free-trade agreement with the US, however I'm not sure about the logistics of shipping graphite to the US from Australia.


But maybe I'm off base and my interpretation is inaccurate.

Graphite is available elsewhere. Here’s a mining junior in Canada. It’ll be several years before this comes online but there are other mines in free trade areas as well.

NMG Issues Positive Results of its Preliminary Economic Assessment for the Uatnan Mining Project – One of the World’s Largest Graphite Projects in Development with Indicative NPV in Excess of C$2 Billion

MONTRÉAL, January 10, 2023--Nouveau Monde Graphite Inc. ("NMG" or the "Company") (NYSE: NMG, TSX.V: NOU) in collaboration with Mason Graphite Inc. ("Mason Graphite") (TSX.V: LLG, OTCQX: MGPHF) releases the results of a preliminary economic assessment ("PEA"), according to National Instrument...

finance.yahoo.com

 

[jw934]

I know you are gonna ask for a source and I will update post when I find it.
Tesla negotiated that they get all incentives in their agreement.
If memory serves, the IRA wasn't passed when they did this.
Forward thinking...

Edit: Searched for the source, no details yet. I know Rob Maurer posted a screenshot of the contract details showing that Tesla negotiated to keep any incentives should any become available in the future. I haven't found his source yet, will check his episodes around that time frame.

My reading of the contract, as per SEC filing, says Tesla gets all government incentives for GigaNevada and Panasonic gets nothing.
I saw that The Accountant just tweeted he is uncertain, based on his reading.

To see previous discussion in TMC on this topic, search for “Panasonic credit” with the “ in this thread “ option checked.

E.g. one result:

Bradford believes that Tesla will get $1.5B tax credits for the Battery production at Giga Nevada as the Panasonic agreement requires all tax credits be given to Tesla.

 

[AndrewZ]

Graphite is available elsewhere. Here’s a mining junior in Canada. It’ll be several years before this comes online but there are other mines in free trade areas as well.

NMG Issues Positive Results of its Preliminary Economic Assessment for the Uatnan Mining Project – One of the World’s Largest Graphite Projects in Development with Indicative NPV in Excess of C$2 Billion

MONTRÉAL, January 10, 2023--Nouveau Monde Graphite Inc. ("NMG" or the "Company") (NYSE: NMG, TSX.V: NOU) in collaboration with Mason Graphite Inc. ("Mason Graphite") (TSX.V: LLG, OTCQX: MGPHF) releases the results of a preliminary economic assessment ("PEA"), according to National Instrument...

finance.yahoo.com

Canada is definitely one country working hard to satisfy this stuff, we need to be moving like yesterday and moving as quickly as possible.

It's truly an exciting time for the US, North America as a whole, and our friendly partners. We should be seeing huge investment into domestic battery resource production and manufacturing, and that should mean plenty of good-paying skilled jobs for years to come. It's about time this stuff comes back to our soil.

 

[FSDtester#1]

Pretty sure the answer is no for both capital gains and ROTH conversion.

The credits are non refundable to cover federal taxes, so no taxes accrued, no credit. I didn't see anything that specified it has to be earned wages that make you pay tax for eligibility. Therefore anything you make or do that creates owed federal taxes, capital gains, Roth conversion, etc should qualify. The only wording is about AGI caps. It also does not carry forward, so use it all in a given year or lose it.
So even if your W2 withheld taxes covers what you owe, any extra you withheld plus the $7500 would be refunded.

 

[2daMoon]

The capital gains tax, probably... it is taxable income. Conversation to Roth? No idea.

I was thinking about an IRA created from a 401K Rollover with pre-tax funds. I think there could be both Income and Capital Gains taxes owed when this is converted to a ROTH. Might be a strategy to look into for your friend if he has an untaxed IRA.

Edit: some clarification from @MikeC and @FSDtester#1 above

 

[FSDtester#1]

. Contract, as per SEC filing, says Tesla gets all government incentives for GigaNevada and Panasonic gets nothing.

To see previous discussion in TMC on this topic, search for “Panasonic credit” with the “ in this thread “ option checked.

E.g. one result:

Thanks for confirming, I was getting tired of searching!

 

[elasalle]

Prof Jeremy Seigel --> We've really solved the inflation problem ...

 

[thesmokingman]

Sasha does a quick run thru numbers showing how the price cuts will INCREASE profits.

 

[ktrivedi70]

The IRA cannot last in it’s current form for more than a couple years. It is founded on assumptions that what GM and Ford are capable of is representative of the EV market. Just back of the napkin, the IRA will likely be gifting $2b to Tesla buyers and Tesla indirectly this year alone (Half via the consumer credit and half via manufacturing credits). Next year it’ll be more like $3-5b. It only gets crazier from there.

It might not even survive the year.

This. While I’ll take the money, from a free markets standpoint, the best option is to let everyone compete on their own merits. If Tesla starts sucking up huge amounts of taxpayer dollars, this may force a change to the bill. If it’s changed to specifically to target Tesla, that’s going to generate legal action and tremendous positive publicity for Tesla. If it’s changed to cut subsidies across the board, then the other guys are screwed because they need those dollars to stay even remotely competitive. If it’s not changed, then Teslas are crazy cheap. Yeah. 4D chess.

After years of teaching, sharing, encouraging, showing the way, being ignored, being mocked, being sued, being insulted ,,,,,they decided to cry havoc and let slip the dogs of war.

I love it.

 

[Max Plaid]

Indeed, I ordered my Model 7 (white interior, tow-package, 7-seater w.FSD) on July 28, 2021 just 3 days before the price went up.

I paid $91K (CAD) when I took delivery in Q3 2022. At that time, the retail price was over $122K (CAD). It was 9.5 mths from Order to Delivery date.

TL;dr "this is nothing".

My MX Plaid, ordered August 2021, delivered December 2022, paid €137.270, current MRSP €161.570 (no MS/X discounts yet here)

 

[FSDtester#1]

My reading of the contract, as per SEC filing, says Tesla gets all government incentives for GigaNevada and Panasonic gets nothing.
I saw that The Accountant just tweeted he is uncertain, based on his reading.

To see previous discussion in TMC on this topic, search for “Panasonic credit” with the “ in this thread “ option checked.

E.g. one result:

Brad Ferguson pointed out Tesla could be getting $1.5B annually in IRAct tax credit on Panasonic’s GigaNevada production due to prior sales agreement with Panasonic.



View attachment 847160
View attachment 847162

source : Electrified YouTube

Thank you to @jw934 For finding this confirmation that Tesla gets all Battery Tax Credits and nothing for Panasonic. I tried to edit my earlier post but was timed out. See attachments above