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US Federal $7,500 Electric Vehicle Credit Expiry Date By Automaker
- Thread starter seattlite2004
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- Model 3
From Troy's delivery estimator thread... I read the general consensus was Sept '18 was going to be the start of the phase out... So full tax credit till Aug 30 '18.
ℬête Noire
Active Member
The steps down happen at the end of calendar quarters, so Sept 30 would be the last day at full tax credit if Tesla hits 200K lifetime US deliveries by June 30. The next step down from $3750 happens 6 months after that.
As smart as Elon Musk is, my bet is he also considered that and is probably using that to sell the long range first. So, you're right. The chance we could use the credit on the standard range is pretty slim right now.
No, if they sell number 200,000 in April (or anytime in the second quarter) the full credit would only be good until the end of September, after which it would go down to $3,750 for two quarters, then half again for two more.
Kant.Ing
Member
Got my answer here Tesla to Inject Capital Into Model Y SUV Program, Will Leverage Learnings From Model 3
Maybe wait for Model Y the real popular and mass production one.
dhanson865
Well-Known Member
This article and graphic might help folks put things into perspective regarding the Fed Tax and the availability of the SR: US Federal $7,500 Electric Vehicle Credit Expiry Date By Automaker
I'm gonna wait another month or so....but the Bolt could be an opton for folks that are waiting for the SR and want the incentives. I'm kinda pissed that I missed out on the 2017 Bolt closeouts....most 2017 Premiere models in my area were $7500 off...so about $37K before tax incentives.
WTF, data through 12/2016 and an estimated 2017 number?
If you go to the monthly scorecard page and add up Tesla's numbers you get
US running total Tesla Sales vs 200,000 for federal credit phase out trigger
2011 end 1,900
2012 end 4,550 (2,650 for 2012 + prior year)
2013 end 22,200 (17,650 for 2013 + prior years)
2014 end 38,889 (16,689 for 2014 + prior years)
2015 end 64,305 (25,416 for 2015 + prior years, Model S and Model X)
2016 end 111,424 (47,119 for 2016 + prior years, Model S and Model X)
2017 end 161,571 (50,147 for 2017 + prior years, Model S, Model 3, and Model X)
2018 Jan 164,946 (3,375 for Jan2018 + prior years, Model S, Model 3, and Model X)
Sure looks like Jay Cole needs to update that graphic or maybe anyone posting it should put a huge disclaimer on how outdated and inaccurate it is.
FlatSix911
Porsche 918 Hybrid
Here is a simple graphic to show the concept: (scenario 3) Plugless | Tesla or GM, who will lose the $7500 tax credit first?
I know, I was correcting the post I quoted that said the full credit would be good to the end of the year.
Barring some massive malfunction, the 200k will trip for Tesla in 2Q.
Current average MS/X sales are averaging just under 1000/week, Model 3's should hit that by March.
Assuming 500/wk for Feb:
Mar 1: 165k + 4k + 2k = 171k
Apr 1: 171k + 8k = 179
May 187k
Jun 203k
June 30th (end of 2Q) = 219k accumulated total.
If they can only maintain 500/wk Model 3's? 211k units.
Let's say Model S/X falls 25% also. 206k units.
But if 2Q reports 25% drop in MS/X for the first half of the year, AND reports 10% of target production levels for Model 3, the shareholders and board will be doing a Ricky to Elon:
Current average MS/X sales are averaging just under 1000/week, Model 3's should hit that by March.
Assuming 500/wk for Feb:
Mar 1: 165k + 4k + 2k = 171k
Apr 1: 171k + 8k = 179
May 187k
Jun 203k
June 30th (end of 2Q) = 219k accumulated total.
If they can only maintain 500/wk Model 3's? 211k units.
Let's say Model S/X falls 25% also. 206k units.
But if 2Q reports 25% drop in MS/X for the first half of the year, AND reports 10% of target production levels for Model 3, the shareholders and board will be doing a Ricky to Elon:
ℬête Noire
Active Member
Not if they divert enough deliveries outside the US. That's the plausible path, although still a big reach (we don't have the actual lifetime delivery numbers to know exactly how much). That Tesla [may] try do this is an idea mostly driven by Tesla drastically moving up Canadian orders on the timeline last week.
There does seem to be an alternative tax credit reason to moving the Canadian orders forward, though. There is a roughly $12K per vehicle rebate (actual rebate, not a tax credit) that could expire in Ontario by December (just over a 1/3 of the total population of Canada, and prime EV territory because of electricity rates vs gas) pending an election result this summer. So that's actually more cash per unit into owner's hands (and likely some into up-sale options given popularity of AWD) than the full US tax credit.
EVNow
Well-Known Member
Sometime back - Musk explicitly stated they may try doing something like this to maximize tax credits.
model3fan
Member
Elon tweeted about that way back in April of 2016. A lot has happened since then, most notably that cars off the line now in Feb 2018 aren't profitable. They need to prioritize first run, AWD, etc until they bring up production lines and drop costs. Adding Canadian deliveries to the mix gives them more customers who will take those first run/AWD cars. I am not getting my hopes up that they will divert enough production to move the 200k car from April to July 1 or later... but as a line waiter waiting on standard range, it'd be an amazing surprise.
I updated my incentive site where I tried to summarize everything if anyone is interested
FlatSix911
Porsche 918 Hybrid
Interesting article by Electrek ... Tesla’s delays in achieving Model 3’s $35,000 price might open the door to other electric cars
Tesla received close to 500,000 reservations for the Model 3, which is impressive no matter how you look at it, but it’s not clear how many are only buying the least expensive version starting at $35,000. A previous survey showed that the majority are actually budgeting closer to $50,000 for the Model 3. But it still leaves a significant number of Model 3 reservation holders counting on the $35,000 base price. In the US, some of them are even stretching their budget and counting on the $7,500 tax credit in order to buy the Model 3.
It’s them who are most affected by Tesla’s change last week that pushed standard battery pack production to ‘late 2018’. The standard battery pack is essential for Tesla to reach the $35,000 price point since the current ‘Long Range’ battery pack in production adds a $9,000 premium on the vehicle. We have been trying to build a new more accurate model of the impact of Tesla’s changes to the Model 3 ramp on the availability of the federal tax credit for Tesla buyers. At the moment, it looks like no one buying a Model 3 with standard battery pack will have access to the full $7,500 tax credit, but they could still get a partial credit if there are no more delays, which is a big ‘if’...
Tesla received close to 500,000 reservations for the Model 3, which is impressive no matter how you look at it, but it’s not clear how many are only buying the least expensive version starting at $35,000. A previous survey showed that the majority are actually budgeting closer to $50,000 for the Model 3. But it still leaves a significant number of Model 3 reservation holders counting on the $35,000 base price. In the US, some of them are even stretching their budget and counting on the $7,500 tax credit in order to buy the Model 3.
It’s them who are most affected by Tesla’s change last week that pushed standard battery pack production to ‘late 2018’. The standard battery pack is essential for Tesla to reach the $35,000 price point since the current ‘Long Range’ battery pack in production adds a $9,000 premium on the vehicle. We have been trying to build a new more accurate model of the impact of Tesla’s changes to the Model 3 ramp on the availability of the federal tax credit for Tesla buyers. At the moment, it looks like no one buying a Model 3 with standard battery pack will have access to the full $7,500 tax credit, but they could still get a partial credit if there are no more delays, which is a big ‘if’...
dhanson865
Well-Known Member
Surprise, surprise, I don't agree with Electrek.
Change that to
At the moment, it looks like no one buying a Model 3 without PUP or AWD in search of a $35,000 price tag will have access to the full $7,500 tax credit.
and I could go for it.
I believe PUP and AWD configs with the base pack will come out before the $7,500 credit goes away, it'll just be the full on base base base config that won't have access to more than $3,750.
$35,000 for the Model 3 to start
LR battery pack $9,000
AWD (price unkown - call it $4,000)
Premium (PUP) $5000
assuming black paint, 18" wheels, and no autopilot since we are talking about the vs $35,000 crowd.
You get these configs
AWD all in (AWD + PUP + LR - $7500 Tax Credit) = $45,500
First available (PUP + LR - NO AWD - $7500 Tax Credit) = $41,500
AWD LR - NO PUP - $7500Tax Credit = 40,500
AWD PUP - NO LR - $7500 Tax Credit = 36,500
AWD - NO PUP - NO LR - $7500 Tax Credit = 31,500
-----
BASE BASE BASE - $3750 Tax Credit = 31,250
So if you can get AWD no PUP no LR near the end of the $7500 tax credit that is the best deal possible for the tight budget at the bottom of the spectrum assuming BASE BASE BASE goes down to $3750 but nothing else does.
If you think $3750 will apply to the bottom 2 configs but not the top 4 you get
WD all in (AWD + PUP + LR - $7500 Tax Credit) = $45,500
First available (PUP + LR - NO AWD - $7500 Tax Credit) = $41,500
AWD LR - NO PUP - $7500Tax Credit = 40,500
AWD PUP - NO LR - $7500 Tax Credit = 36,500
-----
AWD - NO PUP - NO LR - $3750 Tax Credit = 35,250
BASE BASE BASE - $3750 Tax Credit = 31,250
Which puts the value option in config 4 with AWD and PUP but no LR and still has a price gap for option 6 to be saving absolute dollars for the people that have to stretch the budget.
If you are really pessimistic and think it is top 3 get full credit bottom 3 don't you get
WD all in (AWD + PUP + LR - $7500 Tax Credit) = $45,500
First available (PUP + LR - NO AWD - $7500 Tax Credit) = $41,500
AWD LR - NO PUP - $7500Tax Credit = 40,500
-----
AWD PUP - NO LR - $3750 Tax Credit = 40,250
AWD - NO PUP - NO LR - $3750 Tax Credit = 35,250
BASE BASE BASE - $3750 Tax Credit = 31,250
your value play is the first available that is out now or the Base Base Base way later.
Personally I think the top 4 or 5 configs will slide in under the full $7500 before fall. I'm thinking the AWD no PUP no LR will be the value config of 2018 (for employees, prior owners, and maybe first day non owner reservations).
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dhanson865
Well-Known Member
In the vein of buying thousands of dollars of shoes half off to "save money" I'd like to focus tighter on a few pairs here for those that were truly only considering the $35,000 - $7,500 = $27,500 config:
AWD - NO PUP - NO LR - $7500 Tax Credit = 31,500 vs
BASE BASE BASE - $3750 Tax Credit = 31,250
In the first case where the top 5 configs all get full tax credit and the 6th config doesn't you pay $250 going up for the "value play" no regrets here. Go for it if this plays out. It won't be your $27,500 config but it is the next best thing.
If you think $3750 will apply to the bottom 2 configs, but not the top 4; you get
AWD PUP - NO LR - $7500 Tax Credit = 36,500 vs
BASE BASE BASE - $3750 Tax Credit = 31,250
In this case you pay $5250 more to "save $3,750". As in you ordered $9,000 more stuff to "save 3,750" if you are crying about the lost tax credit and it plays out with this choice you are probably better off licking your wounds and going BASE BASE BASE. But AWD is nice and I wouldn't begrudge someone paying $5250 to get AWD and Premium upgrades as a package deal.
If you are really pessimistic and think it is top 3 get full credit, bottom 3 don't; you get:
First available (PUP + LR - NO AWD - $7500 Tax Credit) = $41,500 vs
BASE BASE BASE - $3750 Tax Credit = 31,250
now the spread is $10,250 to "save $3,750" even worse a deal if you are trying to save money. I don't think this is the scenario but yet this is the comparison so many people have made in the last few months when they complain about the potential of lost tax credit. People say they'll order a $14,000 more expensive config to save $3,750. But maybe they just wanted to vent. Surely no one would make that big of a dent in their personal finances in anger over an unexpected adjustment in taxes?
I hope anyone that vented that way will look at these possibilities and wait to see if they can pick a better middle ground with AWD and a short range pack. I know the quick reaction of the pundits are against this happening but you have a few months to wait and see how AWD configs play out before the tax credit ends and forces your hand.
AWD - NO PUP - NO LR - $7500 Tax Credit = 31,500 vs
BASE BASE BASE - $3750 Tax Credit = 31,250
In the first case where the top 5 configs all get full tax credit and the 6th config doesn't you pay $250 going up for the "value play" no regrets here. Go for it if this plays out. It won't be your $27,500 config but it is the next best thing.
If you think $3750 will apply to the bottom 2 configs, but not the top 4; you get
AWD PUP - NO LR - $7500 Tax Credit = 36,500 vs
BASE BASE BASE - $3750 Tax Credit = 31,250
In this case you pay $5250 more to "save $3,750". As in you ordered $9,000 more stuff to "save 3,750" if you are crying about the lost tax credit and it plays out with this choice you are probably better off licking your wounds and going BASE BASE BASE. But AWD is nice and I wouldn't begrudge someone paying $5250 to get AWD and Premium upgrades as a package deal.
If you are really pessimistic and think it is top 3 get full credit, bottom 3 don't; you get:
First available (PUP + LR - NO AWD - $7500 Tax Credit) = $41,500 vs
BASE BASE BASE - $3750 Tax Credit = 31,250
now the spread is $10,250 to "save $3,750" even worse a deal if you are trying to save money. I don't think this is the scenario but yet this is the comparison so many people have made in the last few months when they complain about the potential of lost tax credit. People say they'll order a $14,000 more expensive config to save $3,750. But maybe they just wanted to vent. Surely no one would make that big of a dent in their personal finances in anger over an unexpected adjustment in taxes?
I hope anyone that vented that way will look at these possibilities and wait to see if they can pick a better middle ground with AWD and a short range pack. I know the quick reaction of the pundits are against this happening but you have a few months to wait and see how AWD configs play out before the tax credit ends and forces your hand.
Though we don't know if this is why Tesla has moved up the schedule for deliveries to Canada, if you're numbers are correct, it seems they'd have a reasonable chance of not hitting 200K U.S. deliveries until Q3. Using the counts you gave, it would mean allocating 20K cars between,
- S/X maxing out "rest of world" vs. U.S. deliveries
- putting S/X into the "pipeline" (inventory cars, service loaners, test drive cars, vehicles in transit, vehicles at service centers not yet delivered, and those yet to leave Fremont)
- 3s maxed out for Canada
- putting 3s into the "pipeline" (most of what applies to S/X would apply to 3)
I think they could find more than 20K cars among these options, but, they may not be trying for this.
edit: just thinking about this some more, I think Tesla would have more like 40K "extra" vehicles to contend with. to my view, it's not out of the question that they could do it... but, Canada alone would probably need to take about 25K of the Model 3s.
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FlatSix911
Porsche 918 Hybrid
Wishful thinking ...
Tesla does not need to increase production complexity when they can continue to sell every High Margin LR model 3 they produce.
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