Tesla trips first tax credit reduction due to volume

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kevm14
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Joined: Wed Oct 23, 2013 10:28 pm

Tesla trips first tax credit reduction due to volume

Post by kevm14 »

https://www.motortrend.com/news/tesla-s ... 690ABE76EE

This is good news for them of course. Seems to me that their volume is still way, way, way too low. Still no $35k Model 3. But growth is growth I guess.

So yeah, price reductions to partially offset the credit reduction (it doesn't fully).
kevm14
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Joined: Wed Oct 23, 2013 10:28 pm

Re: Tesla trips first tax credit reduction due to volume

Post by kevm14 »

Relevant: https://www.motortrend.com/news/gm-evs- ... ax-credit/

GM is right there in the same boat.
Tesla also crossed the 200,000-vehicle mark in 2018, triggering the same phaseout. To help customers defray the cost, it recently cut prices by $2,000. When asked whether it planned to offer a similar discount, GM reminded us that customers will still be able to claim the full tax credit through March but couldn't comment on Bolt pricing. Both automakers have also reportedly lobbied Congress to lift the 200,000-vehicle cap or extend the credit.
Yeah except Tesla doesn't even offer a car at the Bolt's price point.
Bob
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Re: Tesla trips first tax credit reduction due to volume

Post by Bob »

There were 140k Model 3s sold in the USA in 2018 compared with 18k Bolts. It looks like value isn't the primary driver of EV sales in this case because it would be hard to argue that the Bolt isn't a better value than a Model 3.
kevm14
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Re: Tesla trips first tax credit reduction due to volume

Post by kevm14 »

No I agree, I was just responding to the whole "well is GM going to discount the Bolt by $2k to match Tesla" thing. Aside from the fact that they don't have to do anything like that, they are also under no "moral obligation" because there is no Tesla that's anywhere near as cheap as a Bolt. Combined with what you said (loads of people don't care), and I see no reason at all GM would need to discount the Bolt as a response to the tax credit reduction. They may want to reduce the price for OTHER reasons but that's a different topic.

Frankly I'd make a very firm and direct connection between the price drop and their stock price, since it is so incredibly volatile (and non-sensical). All it would take is a few auto journalist articles talking about Teslas effectively becoming more expensive and how this could impact future sales and BAM, stock changes. They are just getting ahead of that - since they are publishing the article about the tax credit reduction, the price reduction becomes a PR move to soften the stock blow (if any). GM is not operating in the same sphere at all there. So that's another reason.

I've never seen a company whose moves are so connected to their stock price. Maybe I am not paying attention but it is pretty crazy to me.

GM's vehicle cancelation announcement also came with a stock bump, but (without doing the research) probably an order of magnitude smaller change than is typical for TSLA. And, GM is playing a longer game. Tesla seems to be laser focused on that stock price for the next quarter (specifically, keeping it overvalued) and while any publicly traded company is also doing that, nowhere near to the same extent, because many stocks are less inflated, change to a lesser degree and are overall less sensitive to individual actions taken by the company.
Adam
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Re: Tesla trips first tax credit reduction due to volume

Post by Adam »

kevm14 wrote: I've never seen a company whose moves are so connected to their stock price. Maybe I am not paying attention but it is pretty crazy to me.
Apply also has that 'feature'.
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