Tesla will sell 250k this year? Tax Incentive Expiration
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interestedinEV
Well-Known Member
Tesla has not crossed the 200K mark by June 30th, so they have now preserved the $7500 incentive till end of this year. All cars delivered before December will qualify even if they crossed the 200K mark in total sales say in July. Next year it will drop to $3750 as they would have crossed 200K cars total. This is assuming that no changes are made to the program. You have to remember that Jaguar I-Pace, Audi and others are going to be having their sights on S/X models. I-Pace is about $9,000 cheaper and if there is a reduction in tax incentives, the I pace will nearly $13K cheaper. It is in Tesla's interest to keep the incentive program going. How can they do it. Knowing the right people in high places. 
Personally I would be happy to see the Federal Tax Credit go away. In the case of Tesla, they'll just have to provide a price-performance advantage. New technology can do it. The Model S and X are due for an upgrade that incorporating Model 3 lessons learned can make them even more awesome an affordable . . . without the tax credit. The 24x7, SuperCharger network remains a unique asset their competition lacks.
Bob Wilson
Bob Wilson
I don't think the competition is going to be a problem for Tesla if they can bring out some significant upgrades to autopilot. Also, can the competition get enough batteries and will the dealers actually try to sell the vehicles?
Personally, I would keep the tax credit, but make it so any unused amount can be carried over to the subsequent years.
siway
New Member
Tesla’s cumulative Model 3 production now exceeds 80,000.
According to Bloomberg, cumulative production of Tesla Model 3, estimated through its VIN-tracking algorithm, is now above 80,000! Yes, we’re aware that the tracker is not entirely accurate, but it’s often close to actual.
The Tesla Model 3 Tracker indicates (as of August 31) 80,383 units produced, which means that more than 39,000 were made in the past two months (July and August). The current production rate, however, is just 4,588 weekly, which is not what we expected (as 5,000 should be the base with hopes to reach the goal of 6,000). This downturn could be tied to recently exposed paint issues.
Taking into consideration that at least 20,000 more Model 3 will be produced in September, Tesla will reach the milestone of 100,000 copies by the end of third quarter and 60,000 or 60% of those will be cars made within three months. That’s huge progress.
According to Bloomberg, cumulative production of Tesla Model 3, estimated through its VIN-tracking algorithm, is now above 80,000! Yes, we’re aware that the tracker is not entirely accurate, but it’s often close to actual.
The Tesla Model 3 Tracker indicates (as of August 31) 80,383 units produced, which means that more than 39,000 were made in the past two months (July and August). The current production rate, however, is just 4,588 weekly, which is not what we expected (as 5,000 should be the base with hopes to reach the goal of 6,000). This downturn could be tied to recently exposed paint issues.
Taking into consideration that at least 20,000 more Model 3 will be produced in September, Tesla will reach the milestone of 100,000 copies by the end of third quarter and 60,000 or 60% of those will be cars made within three months. That’s huge progress.
siway
New Member
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based on this number, in the following 4 month there have more than 80k-100k M3 will produced. Total about 175k M3 are produced in this year.
Plus Model S and X. 250k will be very possible.
siway
New Member
Tesla Inc. (TSLA) has manufactured slightly more than 90,000 Model 3 sedans total, but the company's weekly pace is under 4,000 cars, according to a Bloomberg estimate updated on Tuesday.The estimate uses a combination of vehicle identification numbers posted on social media and registered with federal regulators. Tesla on July 2 said it had made 5,031 Model 3s in the last seven days of the second quarter . adding then it would expect to have boosted production to 6,000 a week by late August. Tesla does not report its deliveries, the company's proxy for sales, monthly but instead reports them by quarter a few days after the end of a quarter. It will report third-quarter numbers in early October.
Pushmi-Pullyu
Well-Known Member
Unless Tesla starts building the Model 3 at Gigafactory 1, I don't see them reaching a production of 500k in 2019. The Fremont factory is close to being maxed out, and the Chinese Gigafactory won't yet be producing in high volume.
Some over-enthusiastic Tesla fans claim that Tesla can get the Shanghai "Gigafactory 3" up and running much sooner than the normal 2 years it takes for such things, but Tesla's own plans show 2 or perhaps even 3 years before Gf3 is producing in high volume.
Some over-enthusiastic Tesla fans claim that Tesla can get the Shanghai "Gigafactory 3" up and running much sooner than the normal 2 years it takes for such things, but Tesla's own plans show 2 or perhaps even 3 years before Gf3 is producing in high volume.
I doubt it will have much of an effect because to buy the car, you must pay the full purchase price. The Federal and other credits don't show up until when the next year's taxes are filed. In my case, it was welcome relief because I'd started drawing Social Security and pensions in my last work years and had not worked out my withholdings. The tax credit helped the next year but that was NOT the reason for buying the new, 2017 Prius Prime.
If you can afford a Tesla, you'll buy it. You won't turn down the tax relief but that is a one-time, only event. But I could be wrong.
If we see a burst of new sales in November-December with an burst of used, 3-4 month old Teslas in January-February, well those would be tax credit harvesters. Given the low depreciation, it could work.
Bob Wilson
If you can afford a Tesla, you'll buy it. You won't turn down the tax relief but that is a one-time, only event. But I could be wrong.
If we see a burst of new sales in November-December with an burst of used, 3-4 month old Teslas in January-February, well those would be tax credit harvesters. Given the low depreciation, it could work.
Bob Wilson
Pushmi-Pullyu
Well-Known Member
If you're actually buying the car, that's true. But if you're leasing, many (not all) lease contracts pass the savings along to the buyer immediately.
Pushmi-Pullyu
Well-Known Member
I haven't seen any estimates that I regard as authoritative. Rather, it seems to be a Rorschach test of whether one is a Tesla basher or a Tesla cheerleader. Bashers claim Tesla sales will drop off a cliff; cheerleaders claim the impact will be insignificant.
I do think that the impact on Model S/X sales will be minimal. That market has been shown to be pretty immune to a price difference of just a few thousand dollars. There will be more impact on the domestic Model 3 market, but next year Tesla will start selling the TM3 overseas, where there won't be any effect from the end of the U.S. tax credit.
Keep in mind that Tesla doesn't have to capture 100% of the market; they just have to sell every car they make.
We can be sure that next year, Tesla bashers will point to lower domestic TM3 sales, and proclaim that they were right in claiming that demand for Tesla cars would drop like a stone after the initial orders were satisfied. But frankly, who cares about their repeated cries of "Wolf! Wolf! Wolf!"? Tesla is clearly on a roll, and there isn't any realistic doubt that Tesla's sales will continue to grow strongly for at least several more years.
siway
New Member
I am in Fremont here. The Tesla manufacture site was Totota and GM's assembly factory Muni 10 before. I remember Toyota produced 300k or 500k corola per year. about 10 year ago this manufacture got bankrupt. Tesla is very lucky when it has been working on start up with the Muni available.
Tesla upgrade a lot of assembly equipment, especially after Model 3 production. I believe Tesla just in Fremont still have ability to produce 500k/year.
Tesla is producing three models at Fremont which means three independent lines with no cross-over. I would guess the low end of your suggested range.
Bob Wilson
Pushmi-Pullyu
Well-Known Member
I've read many comments like this, but I never find them very relevant. Not all cars are the same, and you can't produce very different cars on similar lines. More expensive or "premium" cars, as Tesla makes, have more parts, which means more floor space is needed for a production line, and producing cars with more parts means longer production times. Just because Toyota and/or GM produced XXX thousand cars per year at the NUMMI plant doesn't mean Tesla can or will.
In comments to IEVs News article, Nix (who nearly always knows what he's talking about) has claimed that the Fremont plant is undergoing a major expansion, and that there will be room for more production lines, and so Tesla will be able to make a lot more cars there. Perhaps... and perhaps not. I've read that Tesla has already had to increase the number of loading dock bays there, to handle the high volume of parts being shipped in.
One factory in an urban area can produce only a finite amount of product. No matter how much you expand the factory, the roads in and out of the place can only handle so much traffic, and the loading docks can only handle so much volume. This may not be so much of a problem in Nevada, at Gigafactory 1. With so much empty land around, they can always add more roads and more lanes to existing roads. Furthermore, with no buildings near Gigafactory 1, Tesla should easily be able to add lots more loading docks if it needs them. But in Fremont CA, I think Tesla is going to have an increasingly tight constraint on the logistics of having parts delivered and cars shipped out.
No auto maker of any real size tries to make all its cars at a single auto assembly plant. There are very real reasons for that, many practical constraints, and Tesla can't ignore those forever. Of course we know Tesla isn't trying to; it's already building a new assembly plant in Shanghai, China; and Tesla plans for a third somewhere in Europe.
Can Tesla build 500,000 cars per year at the Fremont plant, including all the Model S's, all the Model X's, and something in the neighborhood of 400,000 Model 3's? Well, I won't say it's impossible. Tesla has certainly surprised me before.
But my prediction is that the Fremont plant will max out total production (all three models combined) at less than 400,000 per year, and perhaps closer to 300k than 400k.
So it looks like Bob Wilson and I are on the same page on this question.
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siway
New Member
In the closing quarter of 2018, the automaker produced 86,555 vehicles, marking an 8-percent climb from the previous term and from its all-time high. That figure included a 15-percent pop in Model 3s (61,394) and stability in the Model S and X (25,161).
Total deliveries (90,700) expanded 8-percent off the record struck in the third quarter. Tesla achieved 13-percent growth in Model 3s (63,150) — just short of analyst expectations (64,900).
Altogether, management delivered 245,240 vehicles in 2018, including 145,846 Model 3s.
Here is the final number. It is very close to 250k expected early as title.
Total deliveries (90,700) expanded 8-percent off the record struck in the third quarter. Tesla achieved 13-percent growth in Model 3s (63,150) — just short of analyst expectations (64,900).
Altogether, management delivered 245,240 vehicles in 2018, including 145,846 Model 3s.
Here is the final number. It is very close to 250k expected early as title.
Pushmi-Pullyu
Well-Known Member
So, Q4 production is almost exactly the same as Q3 production. I admit I was expecting it to be not terribly much more. Tesla is obviously limiting domestic demand for the Model 3, and signs are pretty strong that domestic demand has plateaued for the currently available options (including no lease). But still, to see sales/deliveries be almost exactly the same is a bit disappointing. 
If Model S/X sales are not up this quarter over last, then that does surprise me. I would have expected an end-of-year rush to take advantage of the $7500 Federal tax credit before it gets reduced.
But looking at Tesla's year 2018 overall... it has been not only a very good year, but an astonishingly good year! How many heavy manufacturing companies, other than brand-new startups, could more than double their production in a single year?
Go Tesla!
If Model S/X sales are not up this quarter over last, then that does surprise me. I would have expected an end-of-year rush to take advantage of the $7500 Federal tax credit before it gets reduced.
But looking at Tesla's year 2018 overall... it has been not only a very good year, but an astonishingly good year! How many heavy manufacturing companies, other than brand-new startups, could more than double their production in a single year?
Go Tesla!
I'm going to suggest that the effects of the Federal Tax Credit have been over valued. For the Model S and X, their high price makes the tax credit little more than an offset of State sales taxes.
In my view, Tesla has a +20% margin versus ~7% for other manufacturers. This means Tesla has a lot of margin to keep their capital investment, the production lines, in operation. Of course this is my personal opinion. <grins>
I see this over valuation of the Federal Tax Credit as something I can use to pickup TSLA for bargain prices. I am quite willing to exploit unreasoned fears and FUD in others.
Bob Wilson
TeslaInvestors
Active Member
You wish. Tesla's margin is subtracting from final MSRP, whereas other manufafturers' margins are subtracting from the price at which they sell to their dealers, which is ~90% of MSRP. So, you need to subtract the cost of running their sales and service centers and marketing costs (like referral prizes, quarter end discounts, etc.) from the 20% margin Tesla brags about.