Dog Tired from Working to Get Depositors Full Tax Credit

Dog Tired from Working to Get Depositors Full Tax Credit

When listening to the call today, everything became clear. The team is working like crazy to get all depositors the full tax credit.
This is a goodwill effort that will gap all other automakers in customer relationship.
I have never seen a company that works as well with, and as hard for, their customers as Tesla does.
When you listen at 1:05+, what do you hear?

M3forMe | 03. Mai 2017


Coastal Cruiser. | 03. Mai 2017

"When you listen at 1:05+, what do you hear?"

What are you looking for Efontana? Are you referring to Elon's Assertion that Tesla becomes more, not less, competitive as the credits phase out? If so, are you perhaps a little hazy on his logic?


Efontana | 03. Mai 2017

He says something like all depositors will recieve the full tax credit.

Time stamp ambiguity is likely the cause of your question.

Coastal Cruiser. | 03. Mai 2017

This is what I head him say in that regard:

The analyst: asked for update on cumulative vehicles sold and referred to prior EM statement regarding elasticity of demand at certain price points, and the analyst then made an assumption that not all reservationists would get the full $7500 tax credit, and that that would have an impact on demand.

Elon responded "I think everyone will get it (the credit) who has put down a deposit." He then noted that the credit rolls off over time.

He then noted "We are prioritizing production for the U.S. ..."

And then refined his earlier comment to say "most people *probably* will get the full tax credit."

That all made sense to me. Where EM lost me a bit is in his refusal to share total sales from inception (assumedly the date the 200k counter commenced) to date.

(paraphrased) people would come to all kinds of conclusions that are not predictive of the future...

I didn't really see his reasoning there.

Red Sage ca us | 03. Mai 2017

Only Deliveries of qualifying vehicles made after December 31, 2009 count toward the 200,000 unit mark

Coastal Cruiser. | 03. Mai 2017

Yes, of course. I'm not sue the analyst understood that given the way he phrased his question, using the word "inception".

What I didn't follow was EM's logic of how people would extrapolate on the sales to date figure in error. Something to do with "anti-selling" the M3. Perhaps EM is eluding to additional reservations between now and ship date being a significant variable.

Frank99 | 03. Mai 2017

>>>I didn't really see his reasoning there.

I'm guessing he doesn't like speculation like:
In his world, he may feel that the speculation is hurting Tesla - perhaps people who reserved late are canceling and buying ICE's because they're convinced they won't get the credit, when as the OP noted perhaps they're working their butts off to see that doesn't happen. Think of the disappointment that was expressed when the first sightings of new Model 3's didn't show , you know, all those speculated features that people dreamed up out of thin air. The speculation built a car that EM couldn't deliver, and I don't think he wants to go through the same thing with deliveries.

I think the expectation that Tesla fanatics will sit quietly in the dark waiting for crumbs of information to twit in is unrealistic. Those who've reserved are rabid, rabid fanatics, and they want to talk, to speculate, to roll in everything Tesla. Keeping them in the dark just means that their fantasies go further off the track.

Red Sage ca us | 04. Mai 2017

Three years ago, in response to those who criticized that he reveals too much, too soon, and that there is 'too much hype' surrounding Tesla, Elon Musk vowed to keep news regarding future plans 'close to the vest'. Since then, both Enthusiasts and Naysayers alike have complained of a 'lack of transparency' or 'poor communication' from Tesla. Do you see the dilemma this places Tesla in? The only way to 'win' is to not play.

It is unfair for those with lofty dreams for the future of Tesla to be chastised for being 'speculative' while those who are members of the League of Lowered Expectations are to be considered supposedly 'realistic' instead. No. Both positions, both favorable and negligible, are speculative in nature, because all anyone can offer is their opinion of what is to come in future events, not facts.

mntlvr23 | 04. Mai 2017

@Frank99 - "I'm guessing that he does like speculation like ..."

So it's all my fault ? ;)
My bad

mntlvr23 | 04. Mai 2017

(doesn't like)

Efontana | 04. Mai 2017


Lowered expectations tend to be less speculative and more self fulfilling.

Back to the point here, Elon is choosing in the long term interest of Tesla here.
The CFO represents a short term "meet my metric" mentality that subordinates the customers to his metrics. (I am trying to soften harsh words by using "represents" as if he is a character on the stage.)

If the company listens to Elon, you get "stars aligned" performance for customer, stockholders and employees.
If the company listens to our charactature villain of the moment, the CFO, you get GM. (50% market share loss).

I am late to this game, as the S is not even a consideration based on price, but Elon seems to know that customer decisions, and recommendations are the foundation. Without that, you don't even have a going concern, and the business is worth nothing.

(Footnote: there were some "compromises" made, mostly in "work like a dog," to do this. But if you play it out the other way, it does not work. The path they took was required to learn how to make the Y correctly... I sure hope the Y has a low load floor in the cargo bay. That requires moving the drivetrain toward the fenders, but it sure makes taking care of a more mobile aging demographic easier. The combination of a curb and a low tailgate makes a wheelchair negotiable ramp. It works for any cargo to have ,a load floor low enough that any reasonable height curb acts like a loading dock. The flexibility of an EV drivetrain lets you do that. But the motor can't be competing with lift-over height. )

Efontana | 04. Mai 2017

Mntlvr, he just does not like hesitation in the sales process.

Red Sage ca us | 04. Mai 2017

Efontana: Wanting less does not give you more. Here, perhaps you don't quite understand what I mean by 'lowered expectations'... A segment on FOX's MAD TV captured it fairly well on a weekly basis for a while...

[ YouTube -- l3k_JvrYsAQ ]

Frank99 | 04. Mai 2017

mntlvr23 - Not your fault; simply an example of the tension between Tesla wanting to control the customer experience, and customers wanting to know more.
As I've said before, I have an FOIA request in to get the EV tax credit data that (if granted) should tell us precisely how many Teslas have received the EV tax credit, which will improve the data in your thread a bit - and I'm intending to make sure you have a copy of it to do so. I happen to disagree with Tesla and EM about the issues with having facts available, so he's just going to have to be p*ssed with me.

Frank99 | 18. Mai 2017

Well, I got a response to my FOIA request:
"To the extent that additional responsive records may exist, such records are confidential and may not be disclosed unless specifically authorized by law. IRS Code S6103 prohibits the release of this information unless disclosure is authorized by Title 26."
Apparently, Ford, Mercedes, and BMW have waived their right to confidentiality for this data; GM and Tesla haven't.

Well, it was a good try.

mntlvr23 | 18. Mai 2017

Thanks for the effort
Their response was faster than I expected

Iwantmy3 | 18. Mai 2017

Assuming that there were ~100000 sales to the U.S. by the end of last year and that ~55% of S & X sales are in the U.S., then it seems likely that a strategy of filling U.S. orders first will ensure that the 200000 number is hit by the end of 2017 (based on the target production schedule).

It sounds to me that the date could be extended to Q1-2018 if they sold Q4 production to Canada first. :) Everybody wins!!!!

dsvick | 18. Mai 2017


Nice try!! You should ask them how, if the information is confidential, a tax filer is supposed to know if they can claim the credit or not.

Red Sage ca us | 18. Mai 2017

As I posted in another thread, only the Sales after December 31, 2009 count toward the cutoff:

Tesla Roadster U.S. Sales
2010 through 2012, estimated at 700 units (probably a lot less than that).

Model S U.S. Sales
2012 ____ 2,558
2013 ___ 18,195
2014 ___ 16,550
2015 ___ 26,400
2016 ___ 29,156
2017 ____ 7,200*
* YTD, through April 2017.

Model X U.S. Sales
2015 ______ 208
2016 ___ 18,028
2017 ____ 5,200*
* YTD through April 2017.

So that is maybe 124,195 units so far Delivered to U.S. Customers thus far, more or less. With around 12,400 vehicles sold through the first four months of the year, Tesla could conceivably find another 24,800 in the last eight months of 2017. That would come to 148,995 units without selling a single Model ☰ on these shores.

Some expect that sales of both Model S and Model X will accelerate prior to the launch of Model ☰. They point to U.S. Customers wanting to take advantage of the Federal EV Tax Credit while they can, and not being willing to wait in an ever-growing line for Model ☰. Strangely, this attitude is in direct opposition to the longstanding opinion of some that Tesla is somehow 'afraid' that Model ☰ will somehow 'cannibalize' Sales of Model S, while simultaneously supporting the notion that people are 'only' interested in EV incentives, but not the actual cars.

If Tesla is able to build as many as 120,000 of Model S and Model X combined this year, and 60% of them were Delivered to U.S. Customers, that would be 72,000 units. So even without the Model ☰, if Tesla were to experience unprecedented sales of Model S and Model X in the U.S. this year, they could get as high as ~196,195 units. And if certain ANALysts can be believed, Tesla would only trickle out the Model ☰ with as few as 2,000 units reaching their owners this year. That would push their U.S. total to maybe ~198,195 units, just below the 200,000 unit mark prior to January 1, 2018.

On a quarterly basis, it is typically reported that anywhere from 45% to 55% of Deliveries were to U.S. Customers. So it is highly unlikely that 60%, 80%, or 100% of Tesla Generation II Sales will be to U.S. Customers for the rest of the year. I would be very surprised if combined Sales of Model S and Model X in the U.S. were over 60,000 units during 2017. The number of cars that Tesla has built for the U.S. market can exceed the 200,000 unit mark during 2017 if they like. What matters is when the 200,000th vehicle is Delivered. And the IRS sees that as when the Title is turned over to the end user. Elon said that they would 'do the obvious thing' regarding making the most of the available incentives. I believe that means they will fulfill their sales goals for 2017 by shipping to international Customers, and that they will prepare a lot of cars during December 2017 for Delivery to Customers in early January 2018 to cross the 200,000th mark in the U.S. then. That not only maximizes the number of people who will bet the maximum Federal EV Tax Credit benefit, but it will also extend the final phaseout date for those who end up getting the reduced credit amount when it drops to $3,750 and again to $1,875 six months after that.

Iwantmy3 | 18. Mai 2017

" I believe that means they will fulfill their sales goals for 2017 by shipping to international Customers"
Fantastic idea. Make your northern neighbours happy, ship them to Canada first.

Rocky_H | 18. Mai 2017

@dsvick, Quote: "Nice try!! You should ask them how, if the information is confidential, a tax filer is supposed to know if they can claim the credit or not."

That's going to kind of take care of itself, though, without having to know the count very closely. Here's why:
At some point they will just make the announcement: "We have sold our 200,000th U.S. car."
From that point on, the quantity doesn't matter--only calendar quarters.
Musk has indicated that they will try to make it advantageous, so that the 200,000 point comes near the start of a quarter. Full $7,500 still happens for the rest of that quarter and the following quarter.

So, now to your (and many people's) question: That announcement will be made, and there will be almost 6 months afterward of the full credit being there. The real question that will matter to people later is at the transition quarters to 50% and 25%, can their delivery date get inside the earlier quarter that gets a bigger rebate?

Red Sage ca us | 18. Mai 2017

Yeah. I think the key is to time the rampup so that as many people as possible get SOME level of opportunity to receive even a partial Federal EV Tax Credit. Once Tesla reaches a 10,000 unit per week build rate, that should do well for that last two or three calendar quarters during the phaseout.

Coastal Cruiser. | 19. Mai 2017

Pretty good analysis RS. Can't give you a +42, because the ultimate answer is an unknown at this stage. But pretty good analysis. Pretty, pretty, good.

Red Sage ca us | 19. Mai 2017

"You can't wait six months?" -- God, to Homer Simpson

dsvick | 19. Mai 2017

@Rocky_H - "At some point they will just make the announcement: "We have sold our 200,000th U.S. car.""

I'm not going to hold my breath though. I don't Tesla is under any obligation to make the announcement and doing so could negatively impact business. I would have thought the IRS would be the ones to do it since they're the ones that will have to do that much more work if there are thousands of people claiming things incorrectly on their taxes. We'll see what happens when they get there ....

keokect | 19. Mai 2017

Maybe a larger question is whether delivery zones will take precedence over a place in the Q determined by time of placing the deposit.
Tesla should clarify this issue for all of us.
Hawaii which has traditionally been consider in the west coast delivery zone has been threatened with being moved to East coast zone. No clarification?

Red Sage ca us | 19. Mai 2017

dsvick: Tesla doesn't need anyone to hold their breath. They will make the announcement though, for two reasons... 1) to be upfront and above board so best to make sure the information is in the public domain so that all potential Customers are well informed before beginning the buying process; and 2) in order to use the opportunity to show how the upstart Silicon Valley company was able to fight an up hill battle only able to sell direct in half the States of the Union but still managed to sell through 200,000 units of a fully electric car series to U.S. Citizens that everyone said that "no one wanted, no one asked for" before anyone else, including gigantic companies such as GM and Toyota and Volkswagen that had a decades long head start and millions of vehicles worth of higher capacity.

Coastal Cruiser. | 19. Mai 2017

dsvick: I've always assumed the IRS is where to look. The Feds may just go by what the automakers report, but it is the IRS that will interpret the rules. Key word being "interpret".

Frank99 | 19. Mai 2017

The automakers report their sales quarterly to the IRS. The IRS keeps track of cumulative US sales, as you can see here:
Unfortunately, Tesla has not allowed their data to be seen publicly.

The minimum notification requirement is that, at purchase, Tesla provide you with a certification telling you what credit is available on the car. However, Tesla is better than that - I fully expect them to announce the 200,000th US delivery, if for no other reason than to be considerate to all the Model 3 reservation holders, allowing them to make plans 6-12 months ahead.