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

[mongo]

Not sure why you say it's the opposite when the bit I quoted specifically cites the income cap as the one that causes recapture.

Some folks here previously thought all requirements go away with POS-- that one does not and they will claw back if you're in violation of it.


THAT said- the other violation you bring up, which effectively makes this a refundable credit for those with LOWER income, IS surprising and a pretty huge bit of news if the final rules end up that way (the text you quote being proposed, but not final). It's especially great news for folks in places like CA that have low-income credits where the overlap to get both was narrow-- it's much larger now if this sticks.

So partly opposite. I was lump replying to thetwo quoted posts. You stated "later realize you didn't qualify for some/all of it:" , "some" only applies in the insufficient tax burden situation, excess income hits "all".

Income limit is lesser of previous or current year, so that helps a lot.

(e) Federal income tax consequences of the vehicle transfer election—(1) Treatment of electing taxpayer. In the case of a vehicle transfer election, the Federal income tax consequences for the electing taxpayer are as follows--
(i) The amount of the section 25E credit that the electing taxpayer elects to transfer to the eligible entity under section 30D(g) (by reason of section 25E(f)) and paragraph (d) of this section may exceed the electing taxpayer’s regular tax liability (as defined in section 26(b)(1) of the Code) for the taxable year in which the sale occurs, and the excess, if any, is not subject to recapture.

 

[2daMoon]

The terms make me wonder if the dealer is accepting the fact that what they may recoup is entirely based upon what the purchaser is eligible for.

I would expect to see verbiage in the transfer contract stipulating if the buyer sees any difference from the $7500 it will be added to their loan, or, in the absence of a loan, they would be billed for the difference. (though anyone wanting to fund a ROTH from a taxable IRA or other investment account transfer could have a way to qualify for the full credit in offsetting Capital Gains Taxes, if done in the same tax year)

 

[Hiline]

Tesla was right to warn investors about a difficult year ahead due to macroeconomic factors. They probably didn't see interest rates continuing to rise to this degree, however. The difficult time may last 2-3 years, during which demand for new cars will soften as people hold on to their cars longer. Over time consumers will just get used to the new reality of sustained high interest rates - which actually are just average interest rates if you look at history - and buy new cars again. Cutting prices while continuing to expand production is just playing the long game. Tesla has the money to at least survive the next couple of years despite the price cuts and eroded margins, and when demand picks up they'll be selling EVs at near ICE prices, with healthy margins.

The US price cuts yesterday not only did not come as a surprise given the preceding price cuts in China, but also have marginal impact on Tesla margins given the inventory discounts that lasted all through Q2 - if you watch inventory daily like I do, you'd know.

 

[keydiver]

i.e. if they didn't have the tax liability to support the full credit that they received at the point of sale that they will repay the extra they received.

Not sure why you say it's the opposite when the bit I quoted specifically cites the income cap as the one that causes recapture.

I think the part that mongo objected to was actually MP3Mike's statement I quoted above. It sounds to me that a person's 2024 tax liability is no longer an issue, just their AGI and income cap. Is that right? That's the way I have been understanding it ever since the IRA was passed. So, if true, this will be great for people on retired/fixed income and others of low income that don't have a $7500 tax liability. Now, if we only knew how the battery components and assembly were going to affect the different Tesla models next year.

 

[mongo]

The terms make me wonder if the dealer is accepting the fact that what they may recoup is entirely based upon what the purchaser is eligible for.

I would expect to see verbiage in the transfer contract stipulating if the buyer sees any difference from the $7500 it will be added to their loan, or, in the absence of a loan, they would be billed for the difference. (though anyone wanting to fund a ROTH from a taxable IRA or other investment account transfer could have a way to qualify for the full credit in offsetting Capital Gains Taxes, if done in the same tax year)

Government is purposely making it easy on the taxpayer and seller.
If last year's income and the vehicle meet the criteria, you (and the dealer) are guaranteed the full (vehicle specific) credit.
If you are planning to qualify based on the current year's income, you may be subject to recapture at tax time, but the dealer is not impacted.

 

[Knightshade]

The terms make me wonder if the dealer is accepting the fact that what they may recoup is entirely based upon what the purchaser is eligible for.

I would expect to see verbiage in the transfer contract stipulating if the buyer sees any difference from the $7500 it will be added to their loan, or, in the absence of a loan, they would be billed for the difference. (though anyone wanting to fund a ROTH from a taxable IRA or other investment account transfer could have a way to qualify for the full credit in offsetting Capital Gains Taxes, if done in the same tax year)

As I'm reading this the dealer gets $7500 regardless.

The taxpayer, if they made too much, then gets a $7500 extra bill when they file.

So nothing the dealer need worry about.

 

[Zero CO2]

Interesting viewpoint on why Elon isn’t into Tesla advertising:

https://twitter.com/x/status/1709787457116373264

spot on assessment... "paid for advertising is for the weak and lazy" and once you start it is like a drug that you cant stop.. so don't start

 

[mongo]

As I'm reading this the dealer gets $7500 regardless.

The taxpayer, if they made too much, then gets a $7500 extra bill when they file.

So nothing the dealer need worry about.

Agree, with one clarification: If they made too much this year and last year.

 

[Knightshade]

Agree, with one clarification: If they made too much this year and last year.

One other thing I just realized with the no-clawbacks thing for not having enough liability.

IIRC you can do two POS credits in a year. So not only is this change amazing for buyers with under 7500 in liability, it's amazing for those who were considering buying 2 EVs in a year and under 15k of liability.

 

[mongo]

One other thing I just realized with the no-clawbacks thing for not having enough liability.

IIRC you can do two POS credits in a year. So not only is this change amazing for buyers with under 7500 in liability, it's amazing for those who were considering buying 2 EVs in a year and under 15k of liability.

Yah, per taxpayer. Married filing jointly can buy 4 cars with credits per year.

Edit: that's transfer elections... so one could do others...

 

[Usain]

Superbull Jonas note:

https://twitter.com/x/status/1710310915424317847

Interesting note for a Friday.

The Adam Jonas report mentions that the first pedestrian to be killed by an automobile was in 1899. Back then it made the front page of the New York Times.

Even more interesting is that the auto in question was an EV. I'm surprised the mainstream media hasn't brought this up lately.

 

[Krugerrand]

Seriously, why didn't they retooled all factories for the highland launch at the same time? Did they had too much inventory of part for the older Model 3 in the USA? The Y Chinese update is also really mild but the Model 3 makes sense. I am surprised that the stock is not down more than the 2.5% so far.

There can be hundreds of reasons for this, all out of Tesla’s control. There is A LOT of pieces that need to come together to launch a refreshed vehicle. Rather than assume Tesla is just too stupid to think they should launch in all markets at once, maybe throw the most innovative company in human history a bone and maybe make the assumption that a US/NA supplier dropped the ball or couldn’t make it work in the same time frame as the Chinese vendors.

Many of Tesla’s ‘issues’ over the last decade have been supplier issues; falcon wing doors, no tires, seat failing 5* rating, missing USB, carpet, need to reduce chips in cars, MobileEye holding Tesla at ransom etc…, The list is endless.

 

[Krugerrand]

If all you have is a hammer, all you see is nails ...

So much irony. I can only hope several posters can see themselves in it.

 

[Krugerrand]

Is it unreasonable a thought to consider how margin and earnings might not be the factor defining these price cuts?

What if the goal is to keep moving as many vehicles as possible during a down-turn in the market due to economic forces.

Since one year ago, what has changed with the flow of vehicles into customer's hands? Has it gone up or gone down?

Used car prices may be immaterial to the strategy and "backlog tanking" may also be seen as "deliveries being tuned to match increased production to demand as closely as possible."

What if everyone trying to judge Tesla based upon traditional concepts of increasing the margin, earnings, and similar benchmarks are completely missing how "these are not the Droids you are looking for." Those who do not realize how a company that is rock-solid financially to the point that they could operate for years with no profit at all may not place these as high on the pecking order of "important things" simply because they aren't.

This isn't a sign of weakness. It is a sign of consistent growth through making other than traditional measures the yardstick they use to spread their product far and wide at a rate not seen in over a century in the auto industry.

Perhaps the people consistently making this mistake in evaluating Tesla should consider possibilities beyond the narrow scope of traditional benchmarks.

Stop it! Get back in the box.

 

[Knightshade]

Yah, per taxpayer. Married filing jointly can buy 4 cars with credits per year.

I think it'd be tough to afford 4 new EVs in a year and ALSO come in under the income cap, but YMMV.

Edit: that's transfer elections... so one could do others...

Yeah you could do normal ones like you do this year- but AFAIK those would remain non-refundable unlike the transfer election ones- and going to 5 or more in a year seems even less likely to be able to come in under the income limits outside of some really odd situations.

 

[Krugerrand]

The post you are responding to had absolutely nothing to do with S/X in the UK.
It was talking about possible motivations for 3/Y price cuts.

Your post was rude and unnecessary. You owe cliff Harris an apology

I’ll get right on it.

 

[Krugerrand]

I disagree, it did to some extent:


I am constantly seeing people say that all Teslas are too big for the roads in the UK. And if he is saying the Model 3&Y aren't well suited to the UK roads, then the S&X are really not suited to the UK roads.

My bad. I should have offered solutions to the problem.

A) Buy used
B) Move to another country

 

[Krugerrand]

It absolutely did not have anything to do with Tesla making a RHD model S/X. It was not in response to any other post. He simply posted something he thought others might find interesting. Nowhere do the words model S or model X appear.

Unless you think a UK poster is not allowed to post about the UK market.
And frankly, even if it did what gives a non-moderator the right to tell anyone to “move on”.

I’m done with this.

I asked he move on from the topic as he’s given his opinion repeatedly over several days. Not move on from the thread.

As a point of fact, people do that ALL the time. If that upsets your sensibilities then by all means I look forward to you admonishing everyone from here on out who says such a thing; including the moderators.

 

[Prunesquallor]

Ah, I missed where he said signs were at the store entrance. That means Buc-ee's is partnering with Tesla and possibly getting a commission for every test drive.

Long term, Buc-ee's would probably love for most of their customers to be EV drivers because charging takes longer than filling up with gas. So maybe they aren't asking for any commission at all.

With Buc-ee's charging time doesn’t matter. If you get in and out of those behemoths in less than a half hour, you’re not doing it right

 

[wws]

Interesting note for a Friday.

The Adam Jonas report mentions that the first pedestrian to be killed by an automobile was in 1899. Back then it made the front page of the New York Times.

Even more interesting is that the auto in question was an EV. I'm surprised the mainstream media hasn't brought this up lately.

EVs somewhat predated gas cars. They were used as taxi cabs in NYC in the 1890s. The motors and controllers were very similar to, and basically miniaturized versions of, those used in electric trolley cars.