Tesla Braces for ‘Rough’ Quarters as US Ends EV Incentives

One doozy from the middle of the article >“I think my control over Tesla should be enough to ensure that it goes in a good direction, but not so much control that I can’t be thrown out if I go crazy,” Musk said. He's already gone crazy and can't be thrown out, so I guess he needs less control ;)

Fantastic. Finally The can can no longer be kicked He’s run out of Road

Tesla fans need to sell their houses and buy TSLA as a sign of support.

Unfortunately that seems to be the case for our entire economy… I don’t think the AI revolution is coming…

Not too much translate to around fifty billion dollars, he has been trying to get that egregious pay package for years, it's more money than tesla ever made in profits.

By "Quarters"... he means **years**. By my estimation, on account of the passing of the BBB, Tesla will see about a $1+ billion reduction in net income in Q4, $4.6+ billion reduction in net income in 2026, $4.6+ billion reduction in 2027, and $7+ billion reduction in net income from 2028 and onwards. This is because the BBB cut the US EV tax credits, ZEV regulatory credits, and US solar / home battery / grid battery credits. Through the end of 2030, because of the BBB, Tesla's net income will drop by $30 billion, and then another $7 billion every year beyond 2030 ... assuming no further changes in policy. If you thought Q2 '25 was bad prior to the BBB policies taking hold, imagine how bad it'll be with the BBB removing Tesla's US subsidies starting in Q4 '24, and in all future quarters/years.

Perhaps they have already along with any retirement savings.

And no, this doesn't mean Tesla will go bankrupt, but means they'll see a massive earnings decline, further increasing their already hyper inflated forward PE unless they see a significant share price correction down. I'll remind everyone that going into Q2 earnings, multiple major investment banks were maintaining or increasing their already inflated price targets on Tesla. Dan Ives of Wedbush Securities was of course pumping the stock prior to earnings. Deutsche Bank raised their price target days before earnings. Piper Sandler raised their targets before earnings. Cathie Wood of course was buying Tesla stock prior to earnings because she's the biggest moron of them all.... with her $2600 price target ($8 trillion market cap) by 2029.... LOL!

Which has nothing to do with why Tesla sales are down while EV sales are up for other manufacturers.

Ya, if they're only "bracing" now, what have they been doing the last 2 quarters? Its been clear for a while now that Teslas sales have been going down while the EV market continues to grow.

Thus the house of cards is primed for the fall.

And I also don't "Buy", that there's going to be last minute buyers to take advantage of the incentives due date. People had years to buy it, why wait till now where the car actually got more expensive and more toxic to buy. All trends are indicating a fall in "interest" in the brand.

Without the ability to sell carbon credits to other manufacturers, their revenue will be net negative. They now have have negative revenue for the foreseeable future. They are indeed on a bankruptcy path. If they continue to pump money into Optimus and expensive AI endeavors with no net revenue this won't last long.

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He controls the entire board and pretty much does whatever he wants (see the whole Cybertruck debacle). What would *more control* look like beyond him getting more money?

Realistic stock price should be 20 dollars at most.

I wonder how long the "AI revolution" will last.  Eventually investors will have to want a return and AI burns through cash so I wouldn't want to be the last investor standing

👆. The end of selling those credits to other automakers because the end of the CAFE emission fines, will be brutal for them.

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The US carbon credit sales only make up about $1 billion of their net income per year. It's the federal $7500 federal tax credit that really dings them, making up about $3.6 billion in net income per year. Combined, that's a loss of about $4.6 billion in net income in 2026 and 2027. (and it also hits them in Q4 '25)

It not only costs Tesla about $1 billion in net income per year, but the other OEMs who are buying those credits will also improve their net income by a combined $1 billion per year. Who knows, maybe those other OEMs will spend it on R&D to build attractive EV options.

By "OP"... are you talking about me? If so, my comments are bearish on Tesla. My comments in r/teslainvestorclub are also bearish.

Nah, we've already seen what happens when Tesla loses EV tax credits on their cars. When this happened in 2019/2020, they dropped MSRPs to account for the difference. GM did the same on the Bolt. They'll have to cut prices by nearly an equivalent amount to the loss in credits to maintain their current level of demand, or alternatively they'll have to cut production on account of lower demand in order to maintain higher MSRPs. However, if they opt to cut production, that will incur losses on its own through loss of revenue / profits, build in parts inventory from parts they've already ordered, and reduction in manufacturing efficiency. They'll also likely need to layoff workers, which will incur one time costs. My target on the stock is between 65 and 93 by end of year... possibly by end of October. Not sure what failed projects and cancellations you're talking about, but the roadster isn't technically cancelled. Yes, they're definitely significantly behind on delivering on their promises, especially the promises that likely account for about 90% of the shareprice; robotaxis and robots. I don't see any of their plants closing anytime soon, but they could definitely cut shifts.

Uhh their income may be negative but unless you got some wild alternate theories their revenue will still be hugely positive.

When Elon said he doesn't want Tesla to merge with xAI and only want Tesla to invest in it, that should a red flag for you. Tesla will be reduced to an EV manufacturer and paying xAI monthly subscription fees for all the software updates. He is jumping the ship and let the Tesla shareholders to hold the Twitter debts.

Bigger problem for Tesla is dropping revenue means less spend on AI/Optimus/etc. they may need to actually take being a car company seriously. Which imo is a good thing for the brand, but without the borderline fraud of the hype plays I think things could get very ugly for the stock

They have plenty of cash, and can always raise more by taking on more debt, or raising cash with additional share offerings. Their long term debt has already increased by about $5 billion over the last couple of years I believe. Given how so little of the share value is tied to car sales, I'm surprised they're taking the car business seriously at all. They could lose 100% of vehicle and battery sales, and investors would still claim the company was worth $900 billion. It's insanity.

Tesla will do anything to boost sales other than make a true second gen vehicle. Their designs, highland/ juniper included are tired as fuck

“If” is doing some heavy lifting here

They have to know that fines will be coming back soon, so spending a few hundred million more working on battery and EV tech would be a wise move. So stock buybacks here we come.

lol, right!

People don't just buy a car, because they are interestet. Cars are longterm investments for most people. Many of the people considering to buy a Tesla at the end of the year or next year will move up their purchase to take advantage of the incentive. This will likely increase the sales (maybe 20%), but - of course - those sales then won't happen later and sales will take an extra hit. Same thing happened here in Germany when the incentives were cut. Record last minute sales, then a big drop in the following quarters for the ev market.

The only thing saving Tesla is the absence of Chinese UVs in the US market.

There have been reports from inside sources that he basically forces board members to get high with him. There are no guardrails or independent oversight.

It’s not just EV incentives. Tesla’s profits came from carbon credits it was able to sell after selling its cars. So people bought cars at a discount which gave Tesla carbon credits it could sell to coal plants. But the (woke) carbon credits are going away. So now Tesla cars are more expensive and fewer people will buy them AND Tesla can’t prop up profits any more with carbon offsets. Double whammy and Tesla and its ponzi stock is fucked.

" Everybody, take a pill or a hit so we can start the board meeting where I spit nonsense"