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Was the 200K Milestone breached?

Was the 200K Milestone breached?

Inside EVs, which seems to have a crystal ball on Tesla deliveries and projections, is predicting that Tesla had little choice but to deliver it's 200,000th vehicle in Q2. Since I'm a M3 reservation holder on the bubble for receiving my vehicle at the end of Q3 or Q4, this is worth a fair amount to me, $3,750 to be exact.

Looking to see if there are any dissenters to Inside EVs' prediction. I am not educated enough on the inner workings of Tesla to really weigh in, but I am sure someone here is and has an opinion.

My concern is that the reservation "floodgates" were opened in order to lock in reservations with non refundable deposits PRIOR to all of us hearing that the tax credit expiration had been triggered.

Here is a link to the article: https://insideevs.com/why-we-believe-tesla-passed-200k-u-s-sales-in-june/

Tuning In | July 2, 2018

If they did, then someone made a mistake, and mistakes do happen unfortunately. Hopefully not.

tbananas | July 2, 2018

Someone should be able to tell you whats going on with the rebate. If you buy one and lose it that would suck

rdavis | July 2, 2018

"Tuning In | July 2, 2018
If they did, then someone made a mistake, and mistakes do happen unfortunately. Hopefully not."

How so? Tesla is in the market to make a profit and sell cars.

From the estimates we say going into this quarter, it appeared that it would be difficult to NOT deliver the 200,000th car this quarter. Maybe they did hold it off by opening up the Canadian market, but I don't think they "stopped" delivering in the US either.

It would not shock me in the least to see that they did indeed deliver the 200,000th car this quarter.

cascadiadesign | July 2, 2018

"... My concern is that the reservation "floodgates" were opened in order to lock in reservations with non refundable deposits PRIOR to all of us hearing that the tax credit expiration had been triggered."

That is a legit concern given production numbers were released today, but this one important number was left out.

However the shipments to Canada and the stockpiling of cars in the US gives me hope they kept the number under 200k. It would also be a public relations nightmare if Elon "tricked" people into ordering early because the 200k number was breached before July 1.

phil | July 2, 2018

Don't worry, it will be fine. Elon assured us that the tax credit does Tesla more harm than good. What's good for Tesla is good for all of us, right?

venkatvavi | July 2, 2018

I am very concerned too. I did get an email to build my car. But my question is if I don't get 7,500 credit then I don't want Model3. No one is picking up at Tesla customer service number. Very frustrating . I just want some one to tell me whether I am going to get 7,500 credit or not

Magic 8 Ball | July 2, 2018

@venkatvavi

Plan for the worst and be pleasantly surprised if your plan fails.

jordanrichard | July 2, 2018

venkatvavi, you do know that the $7500 credit is still valid even after Tesla reaches 200,000 U.S. sales....

The credit only starts to fade after the quarter in which they reach that milestone.

PhillyGal | July 2, 2018

@venkat - They can't tell you whether you're going to get it or not. They can, at beast, estimate that if you configure your car today you'll get within X-Y weeks.

They have no knowledge or your tax liability.

jtkdaddy | July 2, 2018
rdavis | July 2, 2018

"venkatvavi | July 2, 2018
I am very concerned too. I did get an email to build my car. But my question is if I don't get 7,500 credit then I don't want Model3. No one is picking up at Tesla customer service number. Very frustrating . I just want some one to tell me whether I am going to get 7,500 credit or not"

If you are going to take ownership of the car in the next 12 weeks, you will for sure qualify to have UP TO $ 7,500 removed from your tax liability. That's about all that can be said... so I'm not sure what else you want to know...

RadOne | July 2, 2018

The number will probably not be published for a month or so around the time of earnings call. Sales told me that they are currently instructed to say that the tax rebate will be available for Q3. Not a good sign. I think if full rebate ends at end of Q3, they will refund people who want out. Another good reason to have all the reservations so that they still have a steady stream of customers, many who didn't expect the full rebate anyway.

Tuning In | July 2, 2018

@rdavis The mistake would be for them to hold off deliveries in the US and shift to deliveries to Canada only to pass the mark. Passing the mark in Q2 would make that effort pointless.

jjgunn | July 2, 2018

They didn't send all those cars up to Canada for nothing....

I'll be surprised if someone made a mistake but if they did, nothing you can do but open the floodgates.

gyinsu | July 2, 2018

When does Tesla typically give update on the total delivery? Are we going to get this info soon, not just guess?

Tuning In | July 2, 2018

Quarterly financial statement which is a several weeks after the close of the quarter.

rdavis | July 2, 2018

"Tuning In | July 2, 2018
@rdavis The mistake would be for them to hold off deliveries in the US and shift to deliveries to Canada only to pass the mark. Passing the mark in Q2 would make that effort pointless."

My point is that it is only a Forum Group ASSUMPTION that they are trying to hold off the 200,000 sale by opening Canada. Maybe there were/are, but I doubt that wasn't more than a cursory effort. They are in the business of making/selling cars. And looking at where the estimated numbers were at the End of May Would mean it was very difficult for them to actually hold off that 200,000th sale. Just in Model X/S production alone, they might have it the 200,000th car... and as we told delivery of a Model S Last Month, I can assure you they didn't hold off that delivery at all... about 5 weeks from order to delivery.

bvl1984 | July 2, 2018

It may be that Tesla has produced well over 200,000 vehicles, but whether those all count as sales are a different matter entirely. I find it interesting that they state the number of cars in transit at 15,000 at the end of Q2, because these would not count as sales under the tax law.

My hope is that there is enough wiggle room in these numbers that they are able to push the 200K sales into July. It may have a small impact on Q2 revenue, but it would have a real beneficial impact on reservations if they could save their customers over $300 million in tax liability.

ReD eXiLe ms us | July 2, 2018

I figure Tesla put a lot of effort into making sure they did NOT move their 200,000th qualidying unit in the U.S. prior to yesterday. It would be truly bad if there were some kind of 'BREWSTER'S MILLIONS' error at this point. More likely they allowed around a 5,000 unit buffer so as to make sure to not cross the mark ahead of time.

Oh, and... [FLOG] phil.

ravisundaramam | July 2, 2018

jtkdaddy If they repeal the tax credit it is really a great news for Tesla.

They can not repeal it with retroactive effect. So we are good for 2018 tax year. In 2019, Tesla is getting just 3750 and 1875 credit. So it is not as big a loss to Tesla as it would be to other car makers.

Coastal Cruiser. | July 2, 2018

Tuning In, in my view you and ReD are making the most sense. They may have made a 'best effort', but alas, no cigar. I was one of the ones that called it way back in Feb/March that they would cross the threshold in Q3. But alas, reading that article the OP linked to makes my Spidey senses tingle.

But this is a topic of strongly divided opinions. Maybe we should talk instead about the likely/unlikely repeal of Roe v Wade? Better chance of coming to a consensus.

Magic 8 Ball | July 2, 2018

As much as I like talking politics I have been very impressed with the refrain from doing so in this forum from trolls and enthusiasts alike.

pisto234 | July 2, 2018

Let's hope not. My delivery date was pushed back 3 months (though people who configured over month after me got theirs) for what people knew was for extending the tax credit.

ReD eXiLe ms us | July 2, 2018

"...but I doubt that wasn't more than a cursory effort..."

Wait... Hunh? What?!?

boodasmurph | July 2, 2018

@ravisundaramam : "They can not repeal it with retroactive effect. So we are good for 2018 tax year. In 2019, Tesla is getting just 3750 and 1875 credit. So it is not as big a loss to Tesla as it would be to other car makers."

Actually they CAN. They COULD say "effective xx/xx/xxxx, the EV credit is no more." They likely wouldn't make that date in the past, during 2018, but they certainly COULD.

Not that I think they WOULD, but for the most part, it wouldn't be political suicide. A couple of hundred thousand votes spread out across the states (concentrated in 'D' areas I would imagine) wouldn't REALLY matter.

More likely, some sort of compromise bill to change the credit for a fixed length of time (not 10 years like the current proposed bill, more like 5 I think) vs. the current # of US sales will be enacted. The mfgrs. that wait will lose out.

Just my opinion.

14 days to delivery!

phil | July 2, 2018

RadOne | July 2, 2018 "Sales told me that they are currently instructed to say that the tax rebate will be available for Q3. Not a good sign."

Fascinating! Not conclusive, one way or the other, but quite interesting.

Maybe they did sell #200k last month. Or maybe they didn't but are using the unspoken threat of declining tax credits to motivate buyers this quarter, knowing that they'll be able to do the same thing again next quarter.

My bet is still that #200k delivers in July.

CharleyBC | July 2, 2018

"My bet is still that #200k delivers in July."

My bet is it just got delivered 15 minutes ago.

gyinsu | July 2, 2018

When will Tesla release Q2 financial statement? In a few days?

dgstan | July 2, 2018

Like I've mentioned elsewhere, I heard an employee say that they passed 200k in June. Not sure if that report is accurate or not, obviously. I hope not.

But, if Tesla opened up reservations trying to get people to order before word about the tax credit got out, that's hardly "doing the right thing".

jjgunn | July 2, 2018

CharleyBC | July 2, 2018
"My bet is still that #200k delivers in July."

My bet is it just got delivered 15 minutes ago.
-------------

Yours???

Tuning In | July 2, 2018

It was just plain weird how they did a complete halt on deliveries in the US, then on this forum there were people who said that they were able to talk to their ISA and get scheduled for delivery before July. Could be bull or maybe they had some cars they could deliver without hitting 200k. It just seemed weird that ISA could arbitrarily start assigning delivery dates before end of quarter. Hopefully that didn't screw it up.

mscott | July 2, 2018

JFYI: If you read the IRS's bulletin about the tax credit (), the number of "qualified" vehicles is entirely self-reported by the *manufacturer.* So it would seem that people saying Tesla doesn't know how many cars have "qualified" don't know what they're talking about. As with pretty much everything tax-related, it's all on the honor system.

The bulletin further says (Section 5.02) that the purchaser can rely on the "manufacturer's certification" of the amount of credit that is allowable, even if it is later determined that the manufacturer made a mistake. (There are rules to revoke that certification if the IRS determines errors were made, but the revocation is not retroactive, so it seems a taxpayer can absolutely rely on the manufacturer's certification.) It's not clear exactly what qualifies as a manufacturer's certification to a purchaser. (Section 5.03 notes what needs to be reported to the IRS, not a purchaser.)

There's also a requirement for the manufacturer to report quarterly the number of "qualified" vehicles sold in the quarter, although those reports don't seem to be public. But they only have to the end of the month following the quarter to file this report, so Tesla should know for sure by July 31st.

mscott | July 2, 2018

Looks like my link got stripped out:

www.irs .gov/irb/2009-48_IRB

mscott | July 2, 2018

Oh, here's a page that lists the sales of some manufacturers:

www.irs .gov/businesses/irc-30d-plug-in-electric-drive-motor-vehicle-credit-quarterly-sales

Only Ford, MB, and BMW are listed. Maybe the other manufacturers, including Tesla, don't participate in this certification program so they don't have to report their sales?

KP in NPT | July 2, 2018

I’m going to guess they announce it on the quarterly call.

Tesla did not cross it before July 1. If they had, it would have been broadcast all over the internet. Tesla did not divert to Canada and stockpile here to screw up so royally.

gballant4570 | July 2, 2018

In other news, a US Senator has introduced legislation to remove the sunset from the $7500 Federal EV tax credit.

It is likely to fail in this congress, since the senator has a (D) next to his name.

REMEMBER TO VOTE IN NOVEMBER.

Tuning In | July 2, 2018

It's not an honor system as there are penalties for violations:

(a) Under § 7206 for fraud and making false statements; and

(b) Under § 6701 for aiding and abetting an understatement of tax liability in the amount of $1,000 ($10,000 in the case of understatements by corporations) per return on which a credit is claimed in reliance on the certification.

Plus they have to provide information on every vehicle sold. Tesla could compile the information, but it depends on how diligent they were in their systems to catch and mistakes (not allowing deliveries once they reached a threshold):

"The quarterly report must contain the following:

(1) The name, address, and taxpayer identification number of the reporting entity.

(2) The number of qualified vehicles sold by the reporting entity to consumers or retail dealers during the calendar quarter.

(3) The make, model, model year, and any other appropriate identifiers of the qualified vehicles sold during the calendar quarter."

Tesla must assume that they are going to be audited as it is a very high profile situation with a lot of money at stake.

greg | July 2, 2018

That article is backpedalling furiously now Tesla released its actual numbers for Q2.

From going for something "so definite" that 200K was delivered in Q2 they are now refusing all further comment .

Basically they don't know and their sandcastle of truth is built on hot air and guesses.

Only Tesla knows, but why ask yourself did they hold back 10K Model 3s in Q2 if not to avoid crossing the line?

WantMY | July 2, 2018

Tesla only built 18K model 3, not 30,000 as many expected. So relax, we might have another quarter before they hit 200K, hopefully. Which makes base $35K Model 3 a real possibility with full feds rebate in Q1 2019.

Tuning In | July 2, 2018

@WantMY

There is zero chance that there will be a full tax CREDIT in Q1 2019.

WantMY | July 2, 2018

@Tuning In do not be so sure, based on previous milestone achieved at end of March of 3000/week, they could only deliver 1500/week for the last 3 months in Q2. So with 5000/week, it would be very optimistic for Tesla to deliver 2500/week in Q3.

phil | July 2, 2018

mscott | July 2, 2018 "Only Ford, MB, and BMW are listed. Maybe the other manufacturers, including Tesla, don't participate in this certification program so they don't have to report their sales?"

Thanks mscott for the useful info.

I don't know why the IRS would be publishing taxpayer data like that - maybe Ford and the others gave permission for public disclosure, while Tesla, GM, and Nissan did not?

Tuning In | July 2, 2018

@WantMY

Where have you been? They just announced that they are at 5000/week. The overwhelming consensus is that they are 1 car away from hitting 200k. The question is if it's before or after July 1. If it's after July 1, the credit will end on Dec 31, 2018. For them to have a tax credit on Q1 2019, they can't cross 200,000 until Oct 1, 2018.

Even if they only made 2500 a week at this point, they'd still go over 200,000 in Q3.

ravisundaramam | July 2, 2018

boodasmurph | July 2, 2018

"Actually they CAN. They COULD say "effective xx/xx/xxxx, the EV credit is no more." They likely wouldn't make that date in the past, during 2018, but they certainly COULD."

What I meant was law can not be changed to adversely affect with retroactive effective date. In fact some rules about grandfathering allows coal plants to evade modern pollution standards, and coco-cola from publishing its ingredients list. I made a decision to buy my Tesla in May when the tax rebate was in effect. They can't take that away. They can say, "all sales from today will not qualify". But, as you say, they won't. We are debating how many angels could dance on the head of a pin.

ravisundaramam | July 2, 2018

The critical date is not the date it was made or the date it was sold, it was the date the vehicle was put in service by the buyer. Typically it is day it is delivered.
So it could meet the Wall Street numbers for "making" XYZ number of cars in Q2, while still fly below the limbo bar for 200k count.

phil | July 2, 2018

ravisundaramam | July 2, 2018 "They can't take that away."

You must be new. Booda is right.

kram | July 2, 2018

It’s the date the 200000th title is registered by the owner.

I am hoping it happened this week. My delivery time is oct to dec.

vinay | July 2, 2018

I'm on the Payment tab for 2 days now trying to figure if I'd get the tax incentive. No clear info if I pay $2500 to order, I'd get the tax benefit. Can't reach their support. I guess there are too many people in the line that don't care about the tax that it doesn't matter for Tesla. I think I'll wait until I know the price, perhaps in a 2 years and there'll be standard battery too.

Tuning In | July 2, 2018

@kram

Actually IRS states that it is when the 200,000th is SOLD. Minor technicality, but that is what it states.

Tesla2018 | July 2, 2018

Worldeide numbers
Number of deliveries in units
Q2 2015 11,532
Q3 2015 11,603
Q4 2015 17,400
Q1 2016 14,820
Q2 2016 14,370
Q3 2016 24,500
Q4 2016 22,200
Q1 2017 25,000
Q2 2017 22,000
Q3 2017 26,150

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