Tesla Price Cuts Across The Board

[ShrinkDoc]

I'm still going to take delivery of my R1T but I'm considering holding onto the Tesla until after March when the credit goes away to resell....the problem is anything could happen so I'll probably just offload it if I can. I also still FULLY plan on taking the tax credit from Rivian with my binding purchase agreement unless I see any specific reason not to otherwise.

Good point about the credit going away in March (I assume this is due to Tesla not qualifying for the battery sourcing requirements?) At the current rate, I likely won't take delivery until then anyway.

As for the tax credit, I also plan to apply for the credit with the BPA -- whether it actually comes to fruition is anyone's guess. Fortunately, I can also apply for an EV rebate here in MA, but even that has caps on the number available and the amount will likely be less when I finally take delivery.

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[mini2nut]

The way I understand the $7500 Federal Tax credit. Tax professionals please chime in and correct me if I am wrong;

-If you owe $10,000 in federal tax you pay $2500.
-If you owe $7500 in federal tax you pay nothing.
-If you owe $2500 in federal tax you pay nothing but you forfeit the $5000 balance.

 

[MXA121]

Best value in the EV market just got way more attractive!
As a Model 3 LR buyer in 2022, I'm not mad at all. This is a HUGE move in this industry and really highlights how strong their business model is. Everyone else is raising prices on EVs citing increased material costs, low profits, etc (plus investments to make them happen).
No different than buying a new F150 and then dealers giving $10k off to move inventory at end of year (typical automotive scenario).

 

[AWDrift0]

Tesla just increased demand and squashed the BEV competition. They have the demand button down to a science. The assembly plants can continue to run at full speed.

As an owner and former owner of multiple Tesla vehicles, I have watched Tesla's brand cache fall dramatically in the past 12 months. I expect margins to fall greatly and the growth to remain under 45% (which is still awesome but not 50% YOY) This price drop is a sign of desperation more than tactic.

 

[brancky3]

Teslas margins were over 30% per vehicle. Not surprising look at their interiors. Even with these cuts they are ahead of every ICE automaker margins and way ahead of BEV manufacturing in the US. Not too worried about their margins if they can keep sales up overall profit will still grow, but to be seen of course.

IMO the interior of my old model 3 LR wasn't that bad, but very very far behind the Rivian. The only real complaint I had was that the seats were too soft. The UI, sound system, and mobile app are all still miles ahead of the Rivian.

 

[brancky3]

The way I understand the $7500 Federal Tax credit. Tax professionals please chime in and correct me if I am wrong;

-If you owe $10,000 in federal tax you pay $2500.
-If you owe $7500 in federal tax you pay nothing.
-If you owe $2500 in federal tax you pay nothing but you don’t see the other $5000 is savings.

You're wrong. The credit is applied on your tax LIABILITY, which is not the tax you owe. If you make 100k and pay 20k in tax, as an example, your adjusted tax liability would be 12.5k, meaning you get a substantial refund.

 

[Ngkgb]

Maybe someone has mentioned it, but it will cost 6k for enhanced autopilot and 15k for FSD. At least for now(as basic as it is) Driver + is free and can be assumed to continue to improve over time.

 

[mini2nut]

You're wrong. The credit is applied on your tax LIABILITY, which is not the tax you owe. If you make 100k and pay 20k in tax, as an example, your adjusted tax liability would be 12.5k, meaning you get a substantial refund.

Basically the same thing

 

[astonius]

Maybe someone has mentioned it, but it will cost 6k for enhanced autopilot and 15k for FSD. At least for now(as basic as it is) Driver + is free and can be assumed to continue to improve over time.

Basic autopilot (non-enhanced) is included and is already miles ahead of Driver+

 

[Ngkgb]

Basic autopilot (non-enhanced) is included and is already miles ahead of Driver+

Maybe it’s a Cali thing, but I’ve found Driver plus works well. It slows down around curves, doesn’t ping pong, and isn’t jerky. Do wish you didn’t have to re-engage after lane changes.

 

[evhelphub]

With Tesla, you need to time it like the stock market, although it is a bit easier to do. The model Y without radar, without USS, and a bunch of other features removed was nowhere close to a $70k vehicle. The people who were willing to pay that kept everyone else from being able to get one at a more fair price. When buying something, you should pay what it is worth to you, so I don't feel too bad for those who spent that kind of money as it was clearly worth it to them. I would consider a model Y at this price.

 

[HighVoltOverland]

Imagine paying $70k for a MYP a few months ago.

yeah, imagine that your spouses MYP cost more after taxes and rebates than your R1T

 

[goldburger]

You're wrong. The credit is applied on your tax LIABILITY, which is not the tax you owe. If you make 100k and pay 20k in tax, as an example, your adjusted tax liability would be 12.5k, meaning you get a substantial refund.

what would the refund be?

 

[Thedude]

You're wrong. The credit is applied on your tax LIABILITY, which is not the tax you owe. If you make 100k and pay 20k in tax, as an example, your adjusted tax liability would be 12.5k, meaning you get a substantial refund.

Same result in the end, you’re just using different terminology.

 

[lmr]

The way I understand the $7500 Federal Tax credit. Tax professionals please chime in and correct me if I am wrong;

-If you owe $10,000 in federal tax you pay $2500.
-If you owe $7500 in federal tax you pay nothing.
-If you owe $2500 in federal tax you pay nothing but you don’t see the other $5000 is savings.

You're wrong. The credit is applied on your tax LIABILITY, which is not the tax you owe. If you make 100k and pay 20k in tax, as an example, your adjusted tax liability would be 12.5k, meaning you get a substantial refund.

It is a nonrefundable flat credit/reduction on your tax liability for that year. Which means that if you do not have a full $7500 in tax liability for that year, then you can only take the credit for as much liability that you do have, and the credit cannot be carried over into subsequent tax years. So if you only have a tax liability of say $5000, then you can only utilize $5000 of your $7500 tax credit, and the other $2500 is forfeit as you cannot receive credit for more than you owe, and the excess cannot be refunded to you.

This means that a person would need to make ~$66k a year minimum, and have no other significant tax liability deductions, in order to utilize a full $7500 tax credit in the year that they are filing.

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