Tesla Model 3 will single-handedly increase US EV Sales by 40% says Teslanomics

Driver X - I didn't make my reservation thinking I'd get a tax credit. It'd be nice if something was available when they offer one to me. But it's not a deal breaker. I think anyone that made a reservation when I did, or after, certainly knows that the tax credit will be reduced or unavailable by then.

I, for one, did make my reservation thinking I'd get the tax credit, and it will make a difference if for some reason I don't get it.

While I could afford the car without that incentive in the strictest definition of that word, "afford" is nevertheless a very relative term and implies a lot about one's life priorities.

I think I've got a decent shot at the fed benefit because these things: (1) I reserved in person (stood in line) in the afternoon of "opening day" 3/31 at my local Tesla shop (around 5.5 hours before online ordering was opened up to the gen public), and (2) I live about 25 miles from the factory. So, I'm counting on my "earned" priority (which is the standing-in-line-on-opening-day part, putting me probably around the 70,000th - 90,000th in line based purely on time-of-deposit), plus proximity-to-factory to get me in under the wire. I don't currently own an S or X, so I miss out on that priority factor, but two out of three ain't bad.

Therefore, I anticipate I'll snag the fed benefit, if only with a bit to spare. And that makes me happy because it increases the odds that I'll actually pull the trigger on the car, under my personal calculation of what "afford" means to me. Still, time will tell, though . . .

Bottom line, for folks like me, in the "moderately middle class" economic strata, many financial demands pull on me and my wife (child college saving, the other car that is also getting older and probably needs to be replaced eventually, old-house repairs/maintenance, trying to save for retirement in a probably-not-sufficient-but-all-we-can-muster manner, a general aversion to consumer debt of any kind, etc). So, $7,500 is still a lot of money and the presence or absence of such a benefit will indeed weigh heavily on my decision to buy/not buy.

(...)
By the way, even if the 200k threshold is passed this year (which Ben's analysis expects will happen), there will still be some level of incentive through 2018 which should cover the majority of current reservation holders. The incentive is gradually reduced over many quarters, so to clarify DriverX's point, most people with deposits today will likely get some form of tax credit before it completely runs out.

Yes, the full tax credit is likely to be available for all deliveries made during 1Q, possibly even during 2Q18. Therefore if you made your reservation in 2016, particularly if early on or about the reveal on 3/31, you have a great shot at the 7.5 grand.
If you only reserved this year, say in 1Q, you may still get a quarter of that if you get your car this year late though that is not guaranteed since there are probably close to 500k reservations ahead of you... As of 2Q17, it is unlikely there will be anything left but a great car, if hopefully you can afford it !

For those who have not seem this reminder from Trevor Page, founder of the Model3OwnersClub forum, check this out:


Hope this helps.
Mike

(...)Of course if the sale date is same as delivery date then I stand corrected...and never mind my rambling

Precisely. :-)
Legally speaking, the transfer of property (i.e. the car is 'sold'...) at the time of delivery, as I understand it.

I wouldn't call an estimate of 83K "conservative".

Estimates mostly range from 40K-120K, with some outliers saying 2K and 200K.

83K puts you about in the middle.

Anyways... you should mention in the title that you're only referring to 2017. We should see a boost of a few hundred percent in 2018 and beyond.

The real issue is going to be: "How many buyers are going to reclaim their deposit once the Model 3 is no longer eligible for the Federal tax incentive?" Paying approximately 20% more for a big ticket item makes a noticeable impact.

I imagine I am like many reservation holders. At the time I am invited to configure, I will balance the likely tax incentives available with the different feature sets I am considering, and choose how much of the rebate I am willing to forgo in order to get the right set of features. We have been told by Elon we will be able to wait for our options without losing our place in line (relatively speaking). I am thinking there are three things I have to have, and another three I would like to have, so there is room for me to get the right balance.

By the way, even if the 200k threshold is passed this year (which Ben's analysis expects will happen), there will still be some level of incentive through 2018 which should cover the majority of current reservation holders. The incentive is gradually reduced over many quarters, so to clarify DriverX's point, most people with deposits today will likely get some form of tax credit before it completely runs out.

The real issue is going to be: "How many buyers are going to reclaim their deposit once the Model 3 is no longer eligible for the Federal tax incentive?" Paying approximately 20% more for a big ticket item makes a noticeable impact.

Tesla has been careful to avoid mentioning anything about that credit and the price they've been advertising is the price without the credit.

I'm sure people making deposits today are well aware of the fact that they likely won't be getting the credit.

I imagine I am like many reservation holders. At the time I am invited to configure, I will balance the likely tax incentives available with the different feature sets I am considering, and choose how much of the rebate I am willing to forgo in order to get the right set of features. We have been told by Elon we will be able to wait for our options without losing our place in line (relatively speaking). I am thinking there are three things I have to have, and another three I would like to have, so there is room for me to get the right balance.

By the way, even if the 200k threshold is passed this year (which Ben's analysis expects will happen), there will still be some level of incentive through 2018 which should cover the majority of current reservation holders. The incentive is gradually reduced over many quarters, so to clarify DriverX's point, most people with deposits today will likely get some form of tax credit before it completely runs out.

Reasonable view/s. Let's see what CA does with incentives which could be another bonus, I don't see many other states following their lead though. I imagine the stock price when the Model 3 comes out will also be relevant since it appears proceeds from TSLA may be rolled over into purchase of the vehicle. Personally I think that there will be negative headwinds (price of fuel, tech bubble burst, gross margins, competition, etc.) which will make the lofty sales goals difficult. Either way for those of you that do purchase one enjoy your vehicle.
(As an apartment dweller that drives <5K a year a new EV is highly impractical)

I'm leaning toward give me my car ASAP, options and dual motors be darned!

Reasons:
I want it now
My MS gives me lots anyway
I want it now
I might get sucked into a Model Y sooner than later
I want it now!

I'm leaning toward give me my car ASAP, options and dual motors be darned!

Reasons:
I want it now
My MS gives me lots anyway
I want it now
I might get sucked into a Model Y sooner than later
I want it now!

Jen, I want it now too... anybody you know can help? :D
All jokes aside, and impatience managed, don't you think that it will not make that much difference for you (I mean a couple of months). Since you are in the West Coast (of course you are an owner...) would you expect your reservation so soon that AWD would not be available?
In any case, our understanding is that when the Model ≡ Design Studio opens, you will be able to get a good feel for how much longer you'd have to wait if you wished for AWD...
I would argue that, even you trade it for a Y in 2-3 years, you'd have a more desirable thus easily sellable car in an AWD in Pennsylvania, no?

In the end, get the car you want...! We have waited so long already... what's a few more months?! ;)

Jen, I want it now too... anybody you know can help? :D
All jokes aside, and impatience managed, don't you think that it will not make that much difference for you (I mean a couple of months). Since you are in the West Coast (of course you are an owner...) would you expect your reservation so soon that AWD would not be available?
In any case, our understanding is that when the Model ≡ Design Studio opens, you will be able to get a good feel for how much longer you'd have to wait if you wished for AWD...
I would argue that, even you trade it for a Y in 2-3 years, you'd have a more desirable thus easily sellable car in an AWD in Pennsylvania, no?

In the end, get the car you want...! We have waited so long already... what's a few more months?! ;)

I'm actually on the East Coast, so I have no idea when I'll be getting mine even with owner's priority. It does snow here so I did want AWD, especially to give us variety since our Model S does not have it.

But nope! I can't see myself waiting a few more months. It's one thing to really want something, it's quite another to already have it, but only get to use it a 1-2 times a week and go back to the alternate (a gasoline powered Hyndai that rattles maddeningly) the rest of the time.

Plus I'm just being super impatient :)

I'm actually on the East Coast, so I have no idea when I'll be getting mine even with owner's priority. (...)

But nope! I can't see myself waiting a few more months. (...)

Plus I'm just being super impatient :)

Yep, I know you are on the East 'Coast' (relatively speaking to South Dakota, I guess... 'cause in Philly you're still far from the shore! :p)
I really thought they said employee & current owners first, then West Coast. In other words a Model S owner in PA could order before a Californian who is not an owner, no? Otherwise the priority of ownership would make little sense.

And if not, then for sure by the time you are called to order, the AWD will be around the corner... Stay cool... ;)

But I get it. What bugs you the most is this constant Hyundai, Model S, Hyundai, Model S carousel! :D. How about if you'd stop driving the S for a few months as a reality check... :p
Plus would it help you to consider I probably still have at least a year and a half, before I get to merely order?!

Anyways, ok, you're impatient... I empathize, truly! :-)

I really thought they said employee & current owners first, then West Coast. In other words a Model S owner in PA could order before a Californian who is not an owner, no? Otherwise the priority of ownership would make little sense.

Anybody's guess. I've heard owners get priority and I've heard West to East but no indication about whether they'd ship all owners (west to east) before even a single non-owner. Same goes for employees. West Coast employees first, for sure. But an East Coast employee vs. a West Coast owner? No idea.

My hope is that all these priority things only affect delivery by a few weeks because production ramp up is wildly successful.

Anybody's guess. I've heard owners get priority and I've heard West to East but no indication about whether they'd ship all owners (west to east) before even a single non-owner. Same goes for employees. West Coast employees first, for sure. But an East Coast employee vs. a West Coast owner? No idea.

My hope is that all these priority things only affect delivery by a few weeks because production ramp up is wildly successful.

All true, Jen. Thing is... if you could get yourself comfortable with a March/April 2018 delivery time (again, stay away from that S! :p), I think you'd have a shot at an AWD being on your driveway.
While you may only gain 2-3 months for a RWD.
Wild guess on my part, maybe...

Yes, the full tax credit is likely to be available for all deliveries made during 1Q, possibly even during 2Q18. Therefore if you made your reservation in 2016, particularly if early on or about the reveal on 3/31, you have a great shot at the 7.5 grand.
If you only reserved this year, say in 1Q, you may still get a quarter of that if you get your car this year late though that is not guaranteed since there are probably close to 500k reservations ahead of you... As of 2Q17, it is unlikely there will be anything left but a great car, if hopefully you can afford it !

For those who have not seem this reminder from Trevor Page, founder of the Model3OwnersClub forum, check this out:


Hope this helps.
Mike

Correct me if I'm wrong but the presumption for the aforementioned logic is to work is that there are LESS than 25K Model 3 deliveries in U.S. for all of 2017. If that is the case then it is on the very low end of expectations (Adam "cheerleader" Jonas aside), and Tesla might be facing issues.

Correct me if I'm wrong but the presumption for the aforementioned logic is to work is that there are LESS than 25K Model 3 deliveries in U.S. for all of 2017. If that is the case then it is on the very low end of expectations (Adam "cheerleader" Jonas aside), and Tesla might be facing issues.

No, the full credit is available during the quarter the 200kth US vehicle is delivered and the next full quarter. So, if they deliver the 200kth vehicle sometime in Q4 '17 and manage to deliver another 50K vehicles in the remainder of Q4 '17, all of those get the full credit and all of the vehicles delivered in Q1 '18 get the full credit. If they can find a way (by, for example, delivering a bunch of cars to Canada at the end of '17) to keep below the 200kth magic number in the US until say Jan 1 '18, then the full rebate will be available through Q2 '18. (That is, obviously, a best case for us)

No, the full credit is available during the quarter the 200kth US vehicle is delivered and the next full quarter. So, if they deliver the 200kth vehicle sometime in Q4 '17 and manage to deliver another 50K vehicles in the remainder of Q4 '17, all of those get the full credit and all of the vehicles delivered in Q1 '18 get the full credit. If they can find a way (by, for example, delivering a bunch of cars to Canada at the end of '17) to keep below the 200kth magic number in the US until say Jan 1 '18, then the full rebate will be available through Q2 '18. (That is, obviously, a best case for us)

Thanks for the correction, here is the full text of how it works: At the time of the 200,000th sales, and so as not to disrupt/confuse those buying the EVs, that full $7,500 credit continues through the end of the current quarter and to the completion of the next quarter. After this period ends the “phase-out” begins, meaning the credit is reduced to $3,750 for the next 6 months, then to $1,875 for the next 6 months before expiring completely."

Of course Trump/Congress can put an end to it any day they want, but that's a whole other can of worms.

No, the full credit is available during the quarter the 200kth US vehicle is delivered and the next full quarter. So, if they deliver the 200kth vehicle sometime in Q4 '17 and manage to deliver another 50K vehicles in the remainder of Q4 '17, all of those get the full credit and all of the vehicles delivered in Q1 '18 get the full credit. If they can find a way (by, for example, delivering a bunch of cars to Canada at the end of '17) to keep below the 200kth magic number in the US until say Jan 1 '18, then the full rebate will be available through Q2 '18. (That is, obviously, a best case for us)

Here is the IRS section: https://www.irs.gov/irb/2009-48_IRB/ar09.html
Quick question though, the term "sold", means sold, not registered, whereas many are saying it is upon delivery. Unless it has been altered or newly ruled on by the IRS, this is potentially a very important distinction in the wording. The year put in service appears relevant to the filer not the manufacturer. Anyone care to clarify? TIA

@DriverX , I know from conversations on M3OC that it is meant to count cars as they are delivered...

@DriverX , I know from conversations on M3OC that it is meant to count cars as they are delivered...

Don't mean to be doubting you, but I reread the tax code and some discussions among tax attorneys online and while the person who purchases the vehicle claims it upon delivery date, but the manufacturer numbers are based on then the vehicle is "sold". For traditional automakers who store cards on lots there is a clearer delineation but for Tesla not sure what is considered a sale. Thus, Tesla may try to exploit the tax code and stockpile vehicles but not exactly sell them. Future earnings reports will be a thing of beauty to decipher if this is the case, and this may eventually wind up in court.
[Of course if the sale date is same as delivery date then I stand corrected...and never mind my rambling]