Tesla Slashes Prices

[Mach1E]

Is Tesla to be blamed because they took better advantage to them than anyone else?

Yes.

It’s one thing to take government help for the greater good because it’s needed (save the planet etc).

It’s an entirely different thing to abuse the system to become one of the richest people on the planet.

I don’t think the richest man in America needs to get any more of our tax money.

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[tmrqs]

Tesla has dipped below the 20% margin its CFO promised to stay above of.
https://www.theverge.com/2023/4/19/23689793/tesla-q1-2023-earnings-elon-musk-announce

That said, it’s still quite a few points above most competitors.

 

[theduke]

Yes.

It’s one thing to take government help for the greater good because it’s needed (save the planet etc).

It’s an entirely different thing to abuse the system to become one of the richest people on the planet.

I don’t think the richest man in America needs to get any more of our tax money.

Completely disagree. So he's supposed to play by a different set of rules than those laid out for everyone else?

Right, gotcha.

 

[Mach1E]

Completely disagree. So he's supposed to play by a different set of rules than those laid out for everyone else?

Right, gotcha.

Ah, you’re one of those people that think that “legal” and “moral” are the same thing?

Just because you can doesn’t mean you should.

He doesn’t just “follow the rules” he lobbies to change the rules to his favor.

 

[theduke]

Ah, you’re one of those people that think that “legal” and “moral” are the same thing?

Just because you can doesn’t mean you should.

No, I just think everyone should play by the same rules. Those rules were established by the US Gov and were available to all manufacturers.

Only GM and Tesla took advantage of the first tax credit on their cars and hit the 200k limit. Everyone else decided it was better for them to continue selling ICE cars.

So, Tesla is reaping the reward of investing in the market essentially a decade ahead of everyone else.

Should we be talking to Ford's previous CEO and Board of Directors and asking them why they didn't get into the market sooner?

 

[Mach1E]

No, I just think everyone should play by the same rules. Those rules were established by the US Gov and were available to all manufacturers.

Only GM and Tesla took advantage of the first tax credit on their cars and hit the 200k limit. Everyone else decided it was better for them to continue selling ICE cars.

So, Tesla is reaping the reward of investing in the market essentially a decade ahead of everyone else.

Should we be talking to Ford's previous CEO and Board of Directors and asking them why they didn't get into the market sooner?

The 200k vehicle limit is just the tip of the iceberg of how Musk used the government to become the richest man in America.

And that’s one of the few things he did that I have zero issue with.

 

[theduke]

The 200k vehicle limit is just the tip of the iceberg of how Musk used the government to become the richest man in America.

And that’s one of the few things he did that I have zero issue with.

And yet he did nothing illegal or that was not available to anyone else.

You are proposing that he should play by a completely different set of rules than everyone else. I think that's just a personal bias coming through there, not anything objective.

 

[moparguy]

tesla benefited from govt rebates and still do. If they operated in a purely capitalist system, they wouldn't have survived

Everyone else is benefitting from government rebates, it's not like special treatment, when you file your taxes by the end of the year, I don't think Socialists people in the US are not claiming any tax benefits on their tax forms!

 

[Scooby24]

Everyone else is benefitting from government rebates, it's not like special treatment, when you file your taxes by the end of the year, I don't think Socialists people in the US are not claiming any tax benefits on their tax forms!

Can confirm. Take advantage of every tax credit, rebate, incentive, option in the books. Every single one of them.

 

[moparguy]

Looks like Tesla is operating at 18.8% after recent cuts which is impressive, I guess the $53k MY may see another price slash by $10k if they had too! so down to $43k! boy that would flip the EV world upside down! imagine going further and losing money like everyone else!

https://www.barrons.com/articles/tesla-earnings-stock-price-874082c6

 

[Socalsp3]

Everyone else is benefitting from government rebates, it's not like special treatment, when you file your taxes by the end of the year, I don't think Socialists people in the US are not claiming any tax benefits on their tax forms!

your OP stated how tesla is capitalist, if they really were they shouldn't be taking govt programs. Without these programs they would not have survived.

 

[devmach-e]

It's not going away. The provisions in the IRA help Tesla more than any other company. In addition to the $7500 tax rebate for customers, there is a $45/kwh tax rebate that goes directly to Tesla for every kwh of battery they make in the USA. For Model 3/Y that's ~$3500 per car. For S/X ~$4500 per car. And there is no cap on either of these provisions. It's going to literally be billions from US Gov funds going to anyone that can make batteries in the USA.

First of all, it's a tax credit. There is no such thing as a tax rebate. You either get to claim a tax credit, or a deduction. And a tax credit isn't the government giving you money. It's merely letting you send less money to them.

The $45 per kWh tax credit applies to any manufacturer that is making batteries in the US. While Tesla has it's own battery manufacturing facility right now, other companies are setting up their own production facilities, including companies like LG, SK, Ford and GM. So while Tesla gets to take advantage before other companies do, they won't be the sole manufacturer for long. The law was written to encourage American manufacturing, not necessarily to reward Tesla.

 

[theduke]

First of all, it's a tax credit. There is no such thing as a tax rebate. You either get to claim a tax credit, or a deduction. And a tax credit isn't the government giving you money. It's merely letting you send less money to them.

The $45 per kWh tax credit applies to any manufacturer that is making batteries in the US. While Tesla has it's own battery manufacturing facility right now, other companies are setting up their own production facilities, including companies like LG, SK, Ford and GM. So while Tesla gets to take advantage before other companies do, they won't be the sole manufacturer for long. The law was written to encourage American manufacturing, not necessarily to reward Tesla.

Agreed. However there is language in the IRA that if a manuf has no tax burden (i.e. to use it as a tax credit), then they can ask for it as a rebate from the US Gov.

One thing I would add about the $45 per kWh tax credit - Tesla is getting this now. Not in the future like others. The cells and packs made in NV by Tesla they split the credit with Panasonic. The cells and packs make at Kato Rd in CA and in GF Austin, they get 100% of that. That's a lot of cells to get basically half your cost back on.

 

[devmach-e]

Agreed. However there is language in the IRA that if a manuf has no tax burden (i.e. to use it as a tax credit), then they can ask for it as a rebate from the US Gov.

The actual language on the energy.gov website says this:

Manufacturers can also monetize the tax credit through a direct payment from the Internal Revenue Service (IRS) is lieu of a credit against their taxes due, or opt to transfer the credit, as described below:

• Direct pay option: Manufacturers can receive a refund for 45X MPTC tax credits for the first five years they are claimed, though are still subject to the 2033 credit sunset. The five-year limitation does not apply if the manufacturer is a tax-exempt organization (i.e. non-profit), state, municipality, the Tennessee Valley Authority, Indian Tribal government, any Alaskan Native Corporation, or any rural electric cooperative. A penalty of 20% may apply where excess payments occur.[3]
• Transfer of credit: Manufacturers may also elect to transfer all, or a portion, of the tax credits for a given year to an unrelated eligible taxpayer. Payments for the credit must be made in cash and are not considered a taxable event (i.e. no taxes are owed on receiving the payment and no deduction is possible for making the payment). A penalty of 20% may apply where excess credits occur.[4]

That language says it's a refund. And it looks like there's a cap on it, so not unlimited free money from the government.

One thing I would add about the $45 per kWh tax credit - Tesla is getting this now. Not in the future like others. The cells and packs made in NV by Tesla they split the credit with Panasonic. The cells and packs make at Kato Rd in CA and in GF Austin, they get 100% of that. That's a lot of cells to get basically half your cost back on.

That's how the tax code works: it encourages manufacturers to go into new markets with new products. Tesla just happened to have manufacturing setup before the passage of the IRA. It's not like the provision was written just for them to take advantage of.

 

[theduke]

The actual language on the energy.gov website says this:



That language says it's a refund. And it looks like there's a cap on it, so not unlimited free money from the government.


That's how the tax code works: it encourages manufacturers to go into new markets with new products. Tesla just happened to have manufacturing setup before the passage of the IRA. It's not like the provision was written just for them to take advantage of.

Correct, the provision was not designed for them, but they benefit the most from it.

And what you quoted directly states they can take it as a credit:
"Manufacturers can also monetize the tax credit through a direct payment from the Internal Revenue Service (IRS) is lieu of a credit against their taxes due, or opt to transfer the credit . . "

I don't see any reason for any manuf to opt to transfer this kind of credit.


I also can't find any cap on the manuf credit on the IRS website or in the bill itself.

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