Will EV Tax Credits Crater Used Tesla Prices

[StkTNk]

This. I don't get the feeling that TX production is yet being considered when estimating delivery dates. Over the past three months, there was never a point where EDD timeframe really shrunk as one would expect with a significant planned increase in production capacity. On the contrary, backlog seems to have increased from 3 months to six months. While TX wouldn't be near the target 5K MY per week by March, even 1-2K per week at that point should at least diminish the rate at which the backlog increases.

Maybe I'm reading it wrong but that's the view from where I'm sitting.

I was doing some analysis of the Order Tracker Spreadsheet, and it definitely indicates a deprivation of supply fulfillment in the North/East.

If you're Tesla, and *know* that Austin is about to come on-line, why dedicate the extra miles and time/money to ship cars past the middle of the country (basically passing Austin).

Tomorrow is the shareholders meeting (at Giga Austin). I'm hoping (and expecting) a production-start announcement that would effectively begin an exponential EDD cut on anything East of the Mississippi.

 

[StkTNk]

When they started raising prices in March, I thought they would catch some flak for trying to capture the rumored EV tax credits. But then it became clear that supply shortages were here for a while and demand was through the roof, which provided them cover for all the price increases. Tesla has already raised prices by $8k since the low of $49k in February for MYLR - equivalent to the likely $8k tax credit, if it passes.

At this point, I don't think the price increases will stop until GigaTexas/GigaBerlin reach mass production and/or supply shortages improve. I wonder what the price ceiling is since it doesn't seem to have impacted demand so far. I assume part of it is the inflation thinking, where you feel compelled to "get in now, before it goes up".

It's a tricky needle to thread right now as my 2018 LR RWD value keeps increasing but I imagine that it will drop as soon as EV tax credits pass. I can't sell now to lock in the current high prices since I'm waiting for the MYLR to replace it. Hopefully, the long wait times will keep used Tesla values from dropping by the full $8k. I'm expecting them to drop by ~$5k but with the $8k credit on the MYLR, I hope to come out ahead.

I'm not so sure it's *just* supply shortages. They simultaneously reported higher profit per unit in Q2.
It's just supply & demand for a hot product, probably coupled with institutional intuition about the EV credit coming down the line.
They had nothing to lose doing it.

 

[Unclepaul]

Right now domestic used cars are commanding super high prices due to shortages. Imaging these premiums will come down as supply catches up with demand. Many are currently selling their used Tesla for more than they paid for them.

 

[ArchEtech]

Not when the cost of new ones continue to rise way past what they cost 1-2 years ago and make a potential tax credit moot.

I have to think the used market is going to tank a little in general as the supply of new cars catches up a bit, but I don’t think it will be for quite a while and I bet it’s not a drastic crash.

I’m more worried about general inflation that will never go down on top of market adjustments. We’ve all taken pay cuts the last couple of years….

 

[tm1v2]

I’m more worried about general inflation that will never go down on top of market adjustments. We’ve all taken pay cuts the last couple of years….

Yes this. I think we'll find that much of the car price increases are just part of inflation. Though used cars selling for same or more than new is certainly a shortage artifact, of course.

 

[Tooleman694]

I don't think it will have much impact at all. My tax bill is insane already and I can't take the credit till I file in 2023. I wont see a dime since I owe the IRS thousands already. I just want my car.