Will you still buy a Model 3 if the federal tax credit ends?

[derekmw]

Oh, I expect to lose even more by dollar amount on my Model S than the Volt. But that is just a fact of life for higher dollar cars: the % ends up working out to a significant chunk of change.

I bought my 2013 classic S for $59k in December and I expect to trade it in the mid-20s or less as it will be out of warranty, three AP versions behind, and over 100k miles at that point. So that will work out to more $$ than the $35k Volt which I traded for $9500.

Right, dollar for dollar of course the depreciation value will be higher on a tesla when it's more than double the price of the Volt. I was merely speaking of the percentage of depreciation between the two. Anyone who buys a Tesla over a Volt expecting depreciation dollar amount to be less is just kidding themselves.

I was trying to bring out the point that the tesla's depreciation is not bad. That combined with the tax credit would be a better deal than buying a similarly priced ICE car where you would see higher depreciation and not have any tax credit to even help offset it.

 

[trm2]

My experience with the tax credit having used it to buy a Volt was I never really saw the money. I financed the full price of the car minus my normal down payment (vs taking out an additional $9000 from somewhere to offset the state and federal credits) then I applied for the tax credit when I did my taxes and applied for the state rebate. Got $9000 back, but when I sold the car a few years later, that $9000 was added to the normal car depreciation amount. Which was a huge hit percentage-wise on a $35k car. So I didn't really save $9k in the end. That is the biggest reason why used EVs are soooo cheap.

Now, the Tesla dynamic will be slightly different since the credit will expire at some point. But there is an argument to be made that the manufacturers are the only ones reaping the benefits of those tax credits.

The problem is that you didn't buy a $35k Volt. You bought a $26k Volt (35 - 9 = 26), drove it for a few years and sold it for $9.5k. Really, you spend $16.5k to drive the car however long you did. The same will be the case with the Model 3.

 

[Big-T]

No I would not - this car is more expensive (optioned) than I can justify spending without the federal tax credits. Now, if they included the paint and I could individualize the upgrades then maybe but basically going the 1 option package and paint pretty much eats up all of the tax credit.

I need to keep this car in the Honda Accord-ish range Not the BMW 5 series range. Considering how many hondas are sold vs BMW's I think a lot of America will agree.

 

[stopcrazypp]

The problem is that you didn't buy a $35k Volt. You bought a $26k Volt (35 - 9 = 26), drove it for a few years and sold it for $9.5k. Really, you spend $16.5k to drive the car however long you did. The same will be the case with the Model 3.

I think he is talking about the used car market effect. For example, because the credit is still valid, a new car buyer can buy a Volt for $26k, so max resale value before depreciation is that amount. However, if he sold after it expired, the new car price would be higher, so resale value would be higher, so he would "see" the discount more.

 

[Az_Rael]

I think he is talking about the used car market effect. For example, because the credit is still valid, a new car buyer can buy a Volt for $26k, so max resale value before depreciation is that amount. However, if he sold after it expired, the new car price would be higher, so resale value would be higher, so he would "see" the discount more.

Exactly

 

[voip-ninja]

No I would not - this car is more expensive (optioned) than I can justify spending without the federal tax credits. Now, if they included the paint and I could individualize the upgrades then maybe but basically going the 1 option package and paint pretty much eats up all of the tax credit.

I need to keep this car in the Honda Accord-ish range Not the BMW 5 series range. Considering how many hondas are sold vs BMW's I think a lot of America will agree.

I think that Tesla will sell as many $35,000 Model 3s as they can build, with or without the tax credit.

As far as wooing Honda Accord type buyers, I am not convinced. A very well equipped Honda Accord or Toyota Camry can be had in the mid 20K range with discounts, especially if you buy at the end of a model year.

Elon has said two things repeatedly;

1. Model 3 built to compete with cars like BMW 3 series (entry level BMW 330i with similar acceleration to Tesla Model 3 costs $34,000)
2. Model 3 "base" will be very well equipped compared to competition. Not sure I quite buy this one or that middle-America does either when they are comparing non premium marquee cars to the Model 3.

I'll put it this way. I've been in the BMW forum for years. There are literally hundreds if not thousands of threads started every year with people griping about how expensive a BMW is compared to a Toyota/Honda/Hyundai/GM product. Yet BMW continues to sell something like 100,000+ of them in the USA every single year.

Elon will have no problem selling his $35K+ Model 3 day in and day out, with or without a federal tax credit.

Someone who finds the Model 3 at the absolute upper end of their budget but wants some kind of electric/hybrid very well might be wooed by something else on the market like Chevy Volt, Prius, etc, that comes in at a much lower price.

 

[derekmw]

For me, I can buy with or without the tax credit. But, getting a $10k combined tax credit is huge. If I'm going to miss it, I don't need to own the M3 right now, I can just wait and see what happens with the prices later on...if they stay the same, oh well, I'll probably eventually buy the M3. But if I missed the tax credit, and 1 year down the line, the price comes down to entice people to buy it without the tax credit, great.

 

[Big-T]

I think that Tesla will sell as many $35,000 Model 3s as they can build, with or without the tax credit.

As far as wooing Honda Accord type buyers, I am not convinced. A very well equipped Honda Accord or Toyota Camry can be had in the mid 20K range with discounts, especially if you buy at the end of a model year.

Elon has said two things repeatedly;

1. Model 3 built to compete with cars like BMW 3 series (entry level BMW 330i with similar acceleration to Tesla Model 3 costs $34,000)
2. Model 3 "base" will be very well equipped compared to competition. Not sure I quite buy this one or that middle-America does either when they are comparing non premium marquee cars to the Model 3.

I'll put it this way. I've been in the BMW forum for years. There are literally hundreds if not thousands of threads started every year with people griping about how expensive a BMW is compared to a Toyota/Honda/Hyundai/GM product. Yet BMW continues to sell something like 100,000+ of them in the USA every single year.

Elon will have no problem selling his $35K+ Model 3 day in and day out, with or without a federal tax credit.

Someone who finds the Model 3 at the absolute upper end of their budget but wants some kind of electric/hybrid very well might be wooed by something else on the market like Chevy Volt, Prius, etc, that comes in at a much lower price.

Of course they can't sell just 100,000 3 series like BMW does, they need to sell 500,000 and they have far bigger ideas than that.

I agree they're fine for probably the next 4-5 years but I think there's an uper limit of folks willing to buy even a $42,000 car (avg price stated by Elon) I'm just not sure what that limit will be and when Tesla will reach it.

 

[Sonny Daze]

For me, I can buy with or without the tax credit. But, getting a $10k combined tax credit is huge. If I'm going to miss it, I don't need to own the M3 right now, I can just wait and see what happens with the prices later on...if they stay the same, oh well, I'll probably eventually buy the M3. But if I missed the tax credit, and 1 year down the line, the price comes down to entice people to buy it without the tax credit, great.

When they eliminated the S60 they added standard features to the S75 and dropped the price, so I can certainly see them possibly dropping the price of the larger battery and premium package by $1500 each (or something like that) when the tax incentive drops from $7500 to $3750.

 

[stopcrazypp]

Of course they can't sell just 100,000 3 series like BMW does, they need to sell 500,000 and they have far bigger ideas than that.

I agree they're fine for probably the next 4-5 years but I think there's an uper limit of folks willing to buy even a $42,000 car (avg price stated by Elon) I'm just not sure what that limit will be and when Tesla will reach it.

500k is worldwide, which is about the same as 3 series worldwide (400k-500k).

 

[alseTrick]

The $1k deposit can be used for the paint upgrade.
Gas is cheap. You'll probably save a lot more on regular maintenance, especially if you keep it more than six years.

Tesla repairs are expensive.

Gas on a 40mpg car can easily hit $1k/year. It's more expensive than that on my car because my mpg isn't close to 40. And I will get to use the tolled I-95 express lanes in Miami for free.

Yes, the $1k deposit is the same amount of money as the white paint. That doesn't mean Tesla should be let off the hook for not offering free white paint like nearly every other manufacturer.

 

[gambit48]

500k is worldwide, which is about the same as 3 series worldwide (400k-500k).

Exactly. Tesla's reported ambitions seem to just about match BMW's sales numbers. I don't think they've ever said they want to be the best selling car company in the world. They want to change the world by pushing other car companies to electric, but they've never said they want to sell the most.

 

[Cattledog]

Two.

 

[JBare]

If I were to miss out on the full or half credit I would have to think long and hard about saving up and waiting on a used Model S built after Oct '16.

Luckily I waited in line to place my order in store so I'm hoping even though I'm on the East coast I should get a chance to order early next year.