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

[Hiline]

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Section 30D as in this?

26 U.S. Code § 30D - Clean vehicle credit

www.law.cornell.edu

If so, there is no designated amount. Is there not a limit to how much money is set aside for the credit?

 

[jw934]

PRESS RELEASE - 19 JANUARY 2023 23:00

The safest new car of 2022: Tesla Model Y crowned What Car? Safety Award winner as European new car releases achieve best-ever Euro NCAP test scores​

Tesla’s fully-electric family car achieved the highest overall score of any car tested under Euro NCAP’s latest – and most exacting – protocols. Additionally, the Model Y’s near-perfect 98% Safety Assist score, which relates to the performance of its collision-avoidance systems, is the highest ever recorded by the European safety rating agency.

“The Tesla Model Y is an impressively high performer. Its Safety Assist score is the best we’ve ever recorded, and its Adult Occupant Protection score of 97% is the best in 2022,” Thatcham Research’s chief research strategy officer, Matthew Avery, said.

Link to Press Release

Judges are :
Matthew Avery, chief research strategy officer at Thatcham Research,
Michiel van Ratingen, secretary general at Euro NCAP, and
Claire Evans, consumer editor at What Car?

 

[Ogre]

All of their stuff they produce is extremely specific, down to a penny even on their 500+ page reports.

Watched the video again and it makes more sense now.

It’s not the average price of a Tesla over a period. I’m pretty sure they bought a Tesla in 2022 and that was the actual price they paid. Likely ordered it before some of the price increases. These prices are months old, solid chance Tesla’s costs have come down since then due to commodity prices relaxing.

For example this does not account for the IRA manufacturing credits,

 

[MP3Mike]

Is anyone else struggling to find the amount of money available for clean vehicle credit? I've investigated these two documents to no avail:

https://www.whitehouse.gov/wp-content/uploads/2022/12/Inflation-Reduction-Act-Guidebook.pdf

https://www.congress.gov/bill/117th-congress/house-bill/5376/text

Any pointer would be appreciated.

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I assume they were asking about how much money is available to be issued in tax credits total. (Like in some states they limited the EV credits to $xx million. And when the money ran out the program ended until more funding was secured.)

I'm not aware of any limit on the total amount of federal EV tax credits.

 

[mongo]

Section 30D as in this?

26 U.S. Code § 30D - Clean vehicle credit

www.law.cornell.edu

If so, there is no designated amount. Is there not a limit to how much money is set aside for the credit?

Oh, you mean a cap on how much tax revenue is lost (its non-refundable on the consumer side, so there is no cost as in outflow) due to it?
No, that it not bounded.

Edit: estimated at 36 billion though...
CBO Scores IRA with $238 Billion of Deficit Reduction | Committee for a Responsible Federal Budget

 

[Hiline]

I assume they were asking about how much money is available to be issued in tax credits total. (Like in some states they limited the EV credits to $xx million. And when the money ran out the program ended until more funding was secured.)

I'm not aware of any limit on the total amount of federal EV tax credits.

Oh, you mean a cap on how much tax revenue is lost (its non-refundable on the consumer side, so there is no cost as in outflow) due to it?
No, that it not bounded.

Yep that's what I was asking. If there's really no bound, that's insane. If Tesla sells 2.5 million Model 3 and Model Y units combined in 2023 and 80% of them qualify for the federal tax credit, these alone cost 15 billion dollars in tax credit. Add to these millions of BEV and PHEV units from Ford, GM, etc. And then more in 2024, 2025, etc. How likely do we think Congress will cut back the credit when the cost gets out of control?

 

[Mengy]

It's funny how when the stock price is dropping all we talk about is how much that sucks. When the stock price is going up, we talk about everything but the stock.

I think we are all afraid to jinx it by this point!

 

[MP3Mike]

If Tesla sells 2.5 million Model 3 and Model Y units combined in 2023 and 80% of them qualify for the federal tax credit

They won't. The tax credit only applies to sales in the US, which is less than 50% of Tesla's sales.

Add to these millions of BEV and PHEV units from Ford, GM, etc.

Yeah, I don't think so. Ford has barely sold 200k BEV/PHEVs since the tax credit started ~14 years ago. GM has sold a few more than that. I would guess no more than ~150k sales from each of them in 2023. (And that is probably stretching it.)

 

[Hiline]

Edit: estimated at 36 billion though...
CBO Scores IRA with $238 Billion of Deficit Reduction | Committee for a Responsible Federal Budget

Ah just saw this edit. Great find! $36B over 8 years sounds like a gross underestimate.

They won't. The tax credit only applies to sales in the US, which is less than 50% of Tesla's sales.

Yeah, I don't think so. Ford has barely sold 200k BEV/PHEVs since the tax credit started ~14 years ago. GM has sold a few more than that. I would guess no more than ~150k sales from each of them in 2023. (And that is probably stretching it.)

Right. So perhaps 1 million Tesla units sold in the US qualify for the credit in 2023, and then 1.25M and 1.5M the following years, etc.? It would still take Tesla alone less than 5 years to blow the $36B budget.

 

[growler23]

Ah just saw this edit. Great find! $36B over 8 years sounds like a gross underestimate.



Right. So perhaps 1 million Tesla units sold in the US qualify for the credit in 2023, and then 1.25M and 1.5M the following years, etc.? It would still take Tesla alone less than 5 years to blow the $36B budget.

THAT sounds like something to aim for.

$$$

 

[FSDtester#1]

I forget I even have a frunk most of the time.

So do I, mainly because I have junk in the frunk.

 

[M|S|M MYP]

They won't. The tax credit only applies to sales in the US, which is less than 50% of Tesla's sales.


Yeah, I don't think so. Ford has barely sold 200k BEV/PHEVs since the tax credit started ~14 years ago. GM has sold a few more than that. I would guess no more than ~150k sales from each of them in 2023. (And that is probably stretching it.)

Just had a thought cross my mind, if you purchase something on your credit card and get rewards for it, but end up returning the item, you get your rewards points taken away.
If a auto manufacturer sells a vehicle to a consumer and then gets recalled because of a lemon law, safety hazard, buyback etc, the manufacturer should have to pay back any federal credits that it received upon selling that vehicle.

That's all, have a great weekend and i am sure we'll all be ready for next weeks earnings call with our popcorn ready.

 

[bkp_duke]

Watched the video again and it makes more sense now.

It’s not the average price of a Tesla over a period. I’m pretty sure they bought a Tesla in 2022 and that was the actual price they paid. Likely ordered it before some of the price increases. These prices are months old, solid chance Tesla’s costs have come down since then due to commodity prices relaxing.

For example this does not account for the IRA manufacturing credits,

That's not correct. Corey specifically stated that they go back and reprice their reports periodically to account for changes in inflation, supply chain, etc.

 

[FSDtester#1]

For what it is worth, usually when I click on TSLA in the Apple Stocks app I see a bunch of FUD and negative articles. Now most of the articles are about how well the price cuts are working and demand is soaring.

That is because Elon and Tim made nice nice in the sandbox..

 

[Thekiwi]

For those wondering - closing price on this major options expiration day: almost $400 exactly (pre-split)

 

[larmor]

Just had a thought cross my mind, if you purchase something on your credit card and get rewards for it, but end up returning the item, you get your rewards points taken away.
If a auto manufacturer sells a vehicle to a consumer and then gets recalled because of a lemon law, safety hazard, buyback etc, the manufacturer should have to pay back any federal credits that it received upon selling that vehicle.

That's all, have a great weekend and i am sure we'll all be ready for next weeks earnings call with our popcorn ready.

Here is my guess for earnings: Made more than analyst estimate but not crazy high d/t ongoing ramping of factories. Continued profits and FCF but nothing crazy. Still will be great in the lens of a recession and world wide economic challenges.

 

[StealthP3D]

It's funny how when the stock price is dropping all we talk about is how much that sucks. When the stock price is going up, we talk about everything but the stock.

Well, we get it half right anyway. We all have access to the stock price, what is there to talk about?

Joe: Look, the stock is up $5
Bob: By golly, you're right!
Joe: What do you think made it go up?
Bob: I suspect it was more buyers than sellers.
Joe: I suppose you're right.
Bob: It sure is rainy today.
Joe: Yep, it's coming down cats and dogs.
Bob: Well, it'll probably end soon.
Joe: You think?
Bob: Yeah, I listened to the weather forecast this morning.
Joe: And they said it would taper off mid-day?
Bob: No, they said it would rain all day.
Joe: Then why did you say it would probably stop raining?
Bob: They never seem to get it right so I figured it would probably stop.
Joe: Yeah, I guess that makes sense. So, do you think the stock will go up on Monday?
Bob: Well, that depends.
Joe: Depends on what?
Bob: Whether there are more buyers or sellers.
Joe: Right, of course.
(silence)
Joe: I was thinking...
Bob: Yes?
Joe: Do you think there will be more buyers or sellers on Monday?
Bob: Now, how would I know that?
Joe: Well, you seem to know everything else!

 

[ZeApelido]

Up almost 5% and no emotion in this forum.

We are broken people.

 

[chrsk]

Up almost 5% and no emotion in this forum.

We are broken people.

Wake me up after 100%

 

[Captkerosene]

Yep that's what I was asking. If there's really no bound, that's insane. If Tesla sells 2.5 million Model 3 and Model Y units combined in 2023 and 80% of them qualify for the federal tax credit, these alone cost 15 billion dollars in tax credit. Add to these millions of BEV and PHEV units from Ford, GM, etc. And then more in 2024, 2025, etc. How likely do we think Congress will cut back the credit when the cost gets out of control?

100%