Updated Projection of US Tax Credit Phase Out (UPDATED 10/02/17 after announcement of Q3 on M3 deliveries)

Updated Projection of US Tax Credit Phase Out (UPDATED 10/02/17 after announcement of Q3 on M3 deliveries)

(UPDATED 10/02/17)
With the announcement of 26150 MS's and MX's and 220 M3's delivered in Q3, I have updated my "US Tax Credit Phase Out" projection numbers. (Skip to the last to paragraphs of this post if you don't care to see the math worked out.)

Total cars sold by Tesla (worldwide):
Through 2012 = 5,100
In 2013 = 22,442
In 2014 = 31,665 (41% increase over 2013)
In 2015 = 50,658 (60% increase over 2014)
In 2016 = 76,234 (51% increase over 2015)
Cumulative at end of 2016 = 186,098 (worldwide)
Assume 58% of sales are in the US = Total US Sales through 2016 = 107,937 (will round up to 107,950)
(58% of the sales from the US - seemed to be a historical average, and may be lower in future quarters as Tesla expands into more countries)

With the assumption of a continued 10% increase of MS and MX sales per quarter (equivalent to a 46% yearly increase) - then .....

Quarter : Future quarterly US sales / Cumulative US Sales (including M3, assuming 100% of M3's go to US customers)

Q1-2017 : 14,500 / 122,450

Q2-2017 : 15,950 / 138,400

Q3-2017 : 15,387 / 153,787 (26,150 x 0.58 assumed to be US = 15,167 + 220 M3's all assumed for the US) therefore did not hit a cumulative 200,000 US sales during this quarter

Q4-2017 (estimate w/ 10% increase in MS & MX): 16,925 / 170,713 (+ ??? Model 3's) - therefore hits 200,000 US deliveries during quarter if over 30,000 M3's are delivered in the US during Q4. Therefore, it would seem that the 200,000 threshold would be reached in Q1-2018, as any M3 over 30,000 could easily be stockpiled or sold overseas)

So my non-binding summary and conclusion is:

$7,500 Federal Tax Credit through 06/30/18
$3,750 Federal Tax Credit 07/01/18 through 12/31/18
$1,875 Federal Tax Credit 01/01/19 through 06/30/19
No Federal Tax Credit after 06/30/19

Thoughts ?? Mistakes ??? Ridicule ???

Shock | October 3, 2017

Estimates work for me. The only way I can possibly get full federal is if it's available through end of Q2 and at the same time Tesla has a remarkable ramp up in production. I need them to not hit 200k until next year, minimum.

andy.connor.e | October 3, 2017


I think thats a very reasonable expectation. 200,000 cars is alot. I feel that the 100% credit expiring at the end of June is a very good estimate. Most reservation holders will take delivery by then. (hopefully....)(not unless Tesla purposely delays it to let the credit last another quarter)

dsvick | October 3, 2017

As bad as it might seem the ramp is going, if they slipped to Q2 for the 200,000th car that might let me get AWD and the full credit. I think something pretty bad would have to happen in order for that to happen though.

krissu | October 3, 2017

These 220 are kind of hand built. Somehow based on history I have my doubts they could produce 1000 M3-s per day by end of the year. There is no room whatsoever for mistakes in such production rate. These cars would just flood the service centers. Any concern in production will postpone our deliveries.

Frank99 | October 3, 2017

>>> These 220 are kind of hand built.

Well, that's pretty speculative, and depends on what you mean by "hand built". I believe that the 220 are built using the production tools and robots, but were built very slowly with careful supervision and review by humans, with a few steps sometimes done by humans to keep the line moving while the engineers reprogrammed a robot that didn't work right, or didn't work fast enough. I believe there may have even been some human disassembly/reassembly of incorrectly installed bits and pieces due to robots not working right.

Is that "hand built"?

Once they can run a car through in this slow and methodical process without human intervention, they're at the step where they can start ramping up the speed. Cars move through faster, human supervision and inspection is reduced, new problems are discovered and fixed (oops, at higher speed the robot bumps into the car because the car hasn't moved out of the way yet...). Once that works, the cycle repeats.

tes-s | October 4, 2017

Your estimate of 45,000 US sales through Q3 2017 seems high compared to insideevs 35,000.

Does not change the end result - which is dependent on M3 sales.

GetLib | October 5, 2017

Update based on today's elektrek article of just over 140K US deliveries end of Q3 17?

andy.connor.e | October 5, 2017

No, because thats an estimate for next year. There is no way to predict an exponential growth of production. Will have to wait and see.

SamO | February 28, 2018

When do you think we'll get an update from Tesla on the phase-out? At the end of this quarter? At the next quarterly shareholder meeting?

Production constraint on Model S/X and Model 3 may help, as well as sending cars to Europe and Canada.