Financial Times on BBB/Tesla Impact

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>Hopefully an investor will ask at the Q2 earnings call what Tesla's projections show for earnings losses. So much uncertainty! Hopefully an investor will ask why the CEO spent a quarter of a billion dollars electing the guy that campaigned on doing exactly this.

Yeah this is a real the leopard won’t eat MY face moment. The problem Tesla will face is stupidly obvious, demand is down and taking away the tax credit will not help…but it might accelerate a short term as buyers try to get it at the last moment…so Q4 could be very rough.

Honestly the transition to EVs no longer should need tax incentivization. These are better cars period, and cost competitive unless you’ve got weird range anxiety and pretend to live in some hillbilly wilderness where no plugs exist. Without subsidies other legacy automakers cannot cost compete with Tesla for the EV segment.

Because I love road trips, I’d still be nervous to buy anything except a Tesla because of charging infrastructure for other brands. I’ve seen too many road trip videos with derated, broken, or full EA chargers. Happy Tesla is opening many chargers to other brands but more please I have access to every charger!

You know that Tesla opened up their super charging network to other, non-tesla's, right?! I see a ton of non-tesla's at my local SC. As time goes on, I'm less and less incentivized to buy tesla. Honestly, I'm praying Rivian's next couple of vehicles are hits.

It’s a big deal because they will sell fewer cars without them. The impact in Canada is surreal, I went to the dealership the other day and it was a ghost town.

So get a Tesla? They're the best hands down still.

Idk what you’re saying. Your mentioning you’re worried about other brands not having access to Tesla charging system then literally say happy Tesla is opening its chargers to other brands….lol…?

Corn / Ethanol no longer needs subsidies

New Mexico is a weird black hole, but once they finally put in the Roswell UFO supercharger, I'll be able to go pretty much anywhere even here.

Corn is given subsidies because that is a reliable voting block. It's not about making corn cheap.

Tesla is the only company you can claim this for. It is difficult or nearly impossible for other companies to compete without credits. The problem is, I see it the transition to EVs stagnating substantially the next several years in general.

Corn for ethanol is not about cheap corn though. Not at all.

It's almost like he doesn't think shit through, and just tries adjusting/iterating everything.

It is unimaginable that company like EA can survive and no other companies are trying to get into this market, when EA cannot have a working product, the only product... I mean... will you buy a brand of USB charger if it only works 60% of the time?

Not what I’m saying. I’m saying other EVs have access to a growing number of Tesla chargers but not all of them. It’s the Tesla charging infrastructure that makes road tripping with a Tesla comfortable. If I had a different brand of EV, I’d have to rely on EA and other networks that aren’t as well spaced out or reliable. I’d love for every EV to have the charging access a Tesla does. Until that happens, I couldn’t feel comfortable buying an EV other than a Tesla.

Hmm.. what is the impact exactly? The only number I saw after the blah blah is $7500. Bought my MYP at the OG $60k+ price without the 7500 back in 2021. I don't think there was anything that could complete with it on the market, ICE or EV, even at that price (unless your target is on other price levels). Now the price is much lower. Tesla will do just fine without the $7500.

Over the next 12 months, maybe. Over the next few years Tesla should finally be delivering on their self driving promises, and that will present a paradigm shift for the industry. Once people are able to cover the finance costs of leasing a car through sending the car out to work as a taxi, you'll see an explosion in sales demand. Then as the fleet grows you'll see another shift towards many families deciding they don't need to own a car any more. They'll call a cheap robocab when they need to get somewhere, or rent a car by the hour that delivers itself and drives off when they're done with it. Others will get an extra car for the odd occasion they actually need it, sending it out to work the rest of the time. Some will buy fleets of cars to try and turn them into a passive income. Over a 5 - 10 year period I don't think anyone really knows how this will pan out. The best we have are educated guesses.

They killed the zev credits. Competitors were literally paying Tesla to build cars. An auction system where bigger polluters paid cleaner companies.

still, how much revenue or income is impact? 10% or 60% will be totally different level of impact

It's significant. They don't report us vs. foreign regulatory credits, but it could be the difference between positive or negative profit on car sales.

> the transition to EVs no longer should need tax incentivization But apparently the O&G industry not only still needs them but they need them increased which the bill is providing. The paltry credits EV buyers get are constantly picked apart forgetting that every ICE car is subsidized throughout its lifespan at each fill up.

😂

My understanding is that the battery production tax credits remain in place, which means the battery packs for the vehicles are still subsidized at $35/kWh as long as sourcing requirements are met. This also means that the effective tariff on LFP packs changes… the IRA of 2022 essentially put a tariff on Chinese cells, and so even at 60-70% tariff level, the LFP cells may make a come back. Also, there is now an interest rate subsidy with income limits, but for all vehicles.

He's been saying for years that stuff is a waste of federal spending and should be cut.

He's said that all subsidies should be dropped including gas subsidies. That's not what happened. He also was referring to the ev credit more, I don't think he's ever talked about carbon credits which is going to have an even bigger impact. I also think this is largely just talk from him to calm investors it absolutely hurt them last time it happened, their margin per vehicle was way down as they had to drop prices equally to keep sales up. It's one thing to play it off though and another entirely to directly pay a fortune to directly cause damage to the company.

Nobody at Tesla should have expected that tax credit to last forever. First thing they'll do is bring back the LFP battery packs in the US. The only reason they went away was due to the US made NCA packs. I also think used Teslas should increase in value some.

The bigger issue is the end for federal regulatory credits. In Q4, the sale of regulatory credits made up 30% of Tesla's profit. It's not clear how many of those are outside of the US vs US credit sales, but it's going to be a big impact.

Tesla is going to open their own LFP battery factory very soon.

> unless you’ve got weird range anxiety and pretend to live in some hillbilly wilderness where no plugs exist. Have you ever met an American?

This is a troll right?

Stock will pop because of a rush to buy before the ev credit ends

It should last forever though. Gas subsidies have lasted forever.

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It’s also a strategic resource. It provides huge and reasonably nutritious calories for people and livestock, meaning keeping production high ensures the U.S. remains self sustainable in food production. It can *also* be converted into ethanol, with lots of strategic and economic benefits. Most countries subsidise strategic resource production because the world is only one random virus or narcissistic leader away from suddenly losing 25% of its wheat production.

No one talking about this: From the BBB: Sec. 100003) “States must collect a fee of $250 for electric vehicles and $100 for hybrid vehicles. The amounts must be adjusted annually for inflation. The fees terminate on October 1, 2035.” Edit: source https://www.congress.gov/bill/119th-congress/house-bill/1/text

The article is blocked. Is anyone aware if they did away with manufacturing side of the battery incentive ? That could compound things. If I recall correctly it’s a meaningful amount (something like 45$/kw when produce domestically).

Those are emissions credits Tesla gets for being an all electric vehicle manufacturer. Other car companies buy Teslas credits. They definitely do not make 30% of profit from the $7,500 point of sale credit.

Are you sure that's still in the bill? Section 100003 isn't that anymore. "Sec. 100003. Employment authorization document fees." I believe the 250 fee was dropped. Do a search for 250 on the text and the only 250 that pops up now is for some sort of immigration fee.

I didn't say it was?

Alot more riding on robotaxis and energy scaling now.

i believe they removed this from the house bill

They're also in the process of scaling their 4680 cells in texas and fremont, plus the batteries from panasonic in nevada also benefit from the credits. The total value of all this will likely outweigh the ZEV credit revenues tbh

I think, (hope) that Texas is producing enough cells at a good enough price and performance that they will be soon shipping a new model from there. One reason is that Joe Tegtmeyer has been reporting on a fleet of about 25-30 brand new delivery trucks parked up there. Cybercab? Model 2 cheap car? Modified Model Y? No clue really, but everything seems to be pointing that way. Elon has been promising something new, we all know he gets ahead of things, but the expectations are definitely building pressure.

No they did not, they actually kept the battery manufacturing credits. here's a good list of changes that affect tesla: [https://x.com/SawyerMerritt/status/1940924349994668365](https://x.com/SawyerMerritt/status/1940924349994668365) battery related stuff: [https://x.com/bert\_gilfoyle/status/1940930029451727284](https://x.com/bert_gilfoyle/status/1940930029451727284) [https://x.com/JoshTradeOption/status/1941086074572296615](https://x.com/JoshTradeOption/status/1941086074572296615)

Do we think Tesla and/or other manufacturers will offer significant incentives over the next 90 days to push cars?

Stock price is detached from vehicle sales.

Being anti-woke and anti-union became more of his mission than selling EVs.

Fossil fuel subsidies don’t go to vehicle manufacturers/purchasers. And those same subsidies benefit electricity pricing.

Every Tesla is subsidized throughout its lifespan at each fill up. Most electricity generation in the US comes from fossil fuels (subsidized), nuclear (subsidized), hydroelectric (subsidized), and solar (subsidized). I believe wind is losing its subsidy in this new bill.

That’s good news ! Thanks for the references !

Thanks for making my point!

> **Every** Tesla is subsidized > **Most** electricity generation So, not every Tesla?

A) why would Tesla sell such a car at all, rather than just keep all the profits for themselves, and b) can you imagine the average suburban American voluntarily giving up their car? Maybe they’ll supplant Uber, but serious doubt they’ll supplant car ownership altogether. The benefits of ownership are too great for most people to ignore.

ZEV credits are not federal spending. Removing them is just a big middle finger to electrification.

They've repeatedly said those are for stationary storage. While they could do both, I imagine the specs for ones subject to higher charge/discharge rates and the stress of being in motion mean they'd need to engineer them specifically for that purpose.

It will also boost legacy carmakers because they'll no longer be burdened by the cost of buying those credits or paying those fines.

Add to it the privacy fencing on the ground floor of the parking garage and the curtained-off area inside. Something is definitely brewing.

You've kind of answered your own question. Some people aren't going to give up vehicle ownership, so why not utilise those people to provide the capital to fund rolling out a fleet of cars whilst still taking a share of the profits? After all, Tesla can always change their minds down the road if they get to the position of being a monopoly. They could push up prices and choose to own an increasing share of the fleet directly themselves if that makes business sense at the time. Here, today, gaining market share is more of a priority than absolute profit.

I knew they had put up the fencing, but it slipped my mind it was still in place.

Point. The tax credits don't apply to storage?

That is true. I still don’t see it supplanting ownership though. Even if Tesla no longer opts to sell cars, someone else will.

Except last time it was just Tesla losing the tax credits because they were the first to reach 200k sales. Elon is fine with all manufacturers losing the credit because it's pulling the ladder up behind them. Tesla has already reached the scale where they can sell EV's for a profit without the credits, while most other manufacturers (especially the startups) can't. Of course, this is all dependant on the brand not being poisoned, and the economy not crashing so that no one can buy new cars anyway.

What do you mean? They lower tax revenue. They aren't cost neutral. (I'm not defending their removal, but they do have a cost)

They go to vehicle manufacturers, indirectly. By keeping gas prices artificially low, car manufacturers can sell bigger, gas guzzling expensive trucks and SUVs. In the rest of the world, they sell smaller, cheaper cars because gas costs twice as much.

They do make a profit from the PoS credit. I bought my 3 in 2018, right before the initial credit began phasing out. When the credit started phasing out, the list price of the car began dropping commensurate with the credit dropping. A year after I bought the car, the list price was about $6k less than I paid. When the new tax credit plan went into effect, the price of the Tesla also went up. People think tax credits for things like EVs, solar panels, and heat pumps make them more affordable, but they're really subsidies to the manufacturer. I I'm not being critical of the incentives. They are a valuable tool to steer industry.

Nah there was also GM that had lost credit. This argument goes in the face of basic economics, I guarantee you Tesla will reduce their profits to try and keep up already reducing demand. Yes Tesla will be in a better place to compete for the ev market, but overall ev sales will be hurt by this including Tesla. They will be fighting for a bigger piece of a smaller pie. You make something cheaper and sales go up, you lower and they go down (barring an inelastic product which Tesla is absolutely not lol) trying to argue otherwise is a fairly tale.

Production credits do.

Under the ZEV system as it existed, poor efficiency automakers had to pay a fine OR buy credits from someone who has a surplus. The fine for failing to hit efficiency targets has been reduced to zero. While this move will cost Tesla a lot, it's also likely to reduce federal revenue, as not all automakers were likely able to buy them.

Oh. Sorry. I thought you were referring to the tax credits that buyers got for buying ZEVs. My bad.

It's terrible for us though and makes Americans fat and actively unable to serve in the military because of how fat they are

Corn doesn’t make people fat. Eating a lot of high calorie food makes people fat. No one is forced to eat a lot of HFCS. They do so because it’s cheap and tasty.

quaint vase axiomatic yoke aromatic enter deserve silky fanatical sparkle *This post was mass deleted and anonymized with [Redact](https://redact.dev/home)*

No, I want the price at the pump to accurately reflect the cost of the fuel. Not be artificially lowered, with the difference made up for by government subsidies that we still pay for via higher taxes, or an inflated deficit.

So Tesla won't get any more money from selling regulatory credits and other car manufacturers won't have to spend money to buy credits. That's not good for Tesla.

The IRA as a whole was revenue neutral. It raised more money than it spent.

There's no incentive to buy a car for robocab use. The business model is corrupt.

Move fast, break things! 🤡

How do you figure that? You can lease an appropriate model 3 with FSD directly from Tesla on a business lease for £675 deposit and £399 a month thereafter. Register for VAT and pay an accountant £500 a year to do your VAT return if you don't want to it yourself, or £20 a month for software like Xero. Insurance should be covered by Tesla whilst the car is working, and you'd expect them to release a specific plan for such cars, but let's say this is £1,500 a year. Tyres will average out to something around £300 a year. Electricity costs are dirt cheap with Octopus Go, but let's allow £500 per year. Heck, let's double it to £1,000 per year. Worst case all that adds up to £8,088 per annum. An Uber driver in London [earns £950-1350 per week](https://gmdirecthire.co.uk/blog/london-uber-driver-earnings), which is £49,400 per year. Drivers in Manchester or Birmingham are £36-40k. I expect Tesla's service to compete on price, and whilst I expect they can be a lot more efficient than Uber let's say they pay much less, something in the region of £20k per annum. Even with all that caution that still works out as a business model that for a £675 deposit you can make around £1,000 a month profit. So how is that model corrupt and how is there no incentive?

Wondering the same. I need a car soon and didn’t lease during June deals bc i was waiting until Q3/Q4 end. Now im wondering if this will force my hand to panic lease in Sept. but theoretically they could raise the prices lol. But idk🤷🏿‍♂️

Motor fuel tax revenue brings in over $50 billion dollars annually to state and local governments. Federal revenue is on the order of $30 billion plus in the United States. This is balanced against an estimated $20 billion dollars in oil and gas subsidies. If you want the price to reflect the cost of the fuel, you would have to increase the subsidies by a factor of 4 times.

You missed my entire point. Yes, they profit from the PoS credit, no it does not account for 30% of total profit.