Article: We’re about to enter a world where Tesla is the cheaper electric car

[Cody the cat]

https://qz.com/1793634/tesla-is-becoming-the-cheaper-electric-car/

We’re about to enter a world where Tesla is the cheaper electric car
January 29, 2020

The bull case for Tesla is back.

The California carmaker posted its second consecutive profitable quarter (pdf) today, adding another billion to its $6.2 billion in cash reserves. And most of the credit belongs to Tesla’s Model 3 overseas—despite slowing US sales growth, nearly half of the 300,000 of so deliveries in 2019 were to Europe and China.

After years of flirting with bankruptcy, Tesla is posting more consistent profits, cutting costs, growing revenue, and restraining its chief executive Elon Musk from threatening the company’s solvency. The stock, up 12% in after-hours trading, is now far outpacing analysts’ expectations following two years of middling performance.

As Tesla claimed, 2019 looks like a “turning point.” The company is entering its mass-production phase. The importance of its original Model X and Model S is fading as it retools itself to become a global automaker. Tesla now looks capable of delivering 500,000 vehicles this year (most of them the Model 3 sedan and upcoming Model Y crossover) and 1 million as soon as 2022, according to an investor note by equity research firm Wedbush.

We’re also entering a world where Tesla is the cheaper electric car, though not the cheapest. That title will belong to the Chevy Bolt, Nissan Leaf, Hyundai Ioniq, and others selling in the $35,000 range.

But Tesla may soon own a covetable segment of the market, say analysts at auto research company Edmunds. “Tesla got a bit lucky in that the market evolved around them: unplanned, the Model Y might slide right in the sweet spot for the EV crossover market,” now more than half of US car sales, said Jessica Caldwell, executive director of insights at Edmunds. “It has a more prestigious brand than the mainstream hybrid nameplates but comes at a significantly less cost than the rest of the luxury competition.”

So Tesla could find itself in a Goldilocks situation. Its luxury rivals are still too expensive, while the entry-level competitors aren’t attractive enough. The average price for the luxury Audi eTron is $75,524, and the Jaguar iPace is $77,109. Standard EVs, such as the Chevy Bolt, sell for about $38,000. Even the cheapest offering, the Nissan Leaf, lists for $32,000.

Meanwhile, the Model 3 is now selling for $39,000 (before incentives) and Tesla’s Model Y is expected to start at $48,000. At that price, luxury brands will feel the pinch, and cheaper offerings risk being overlooked. Tesla has already proved it can take over the premium sedan market, beating out rivals such as Mercedes, Lexus, and BMW’s 6 and 7 series with its Model S and Model X starting around $75,000.

If it can offer most of the technology in its premium cars at a fraction of the price, Tesla’s Model Y and Model S may have a lucrative EV market segment all to themselves for years to come.

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[ajdelange]

Meanwhile, the Model 3 is now selling for $39,000 (before incentives)

What incentives?

 

[Cody the cat]

What incentives?

Yeah I thought incentives were non existent.
Any states still offer?

 

[ajdelange]

Yes, I think some do but the real point here is that a prospective buyer must pay $7,500 more for a Tesla (or Chevvy) BEV than he must for any other manufacturer's product.

 

[Cody the cat]

Yes, I think some do but the real point here is that a prospective buyer must pay $7,500 more for a Tesla (or Chevvy) BEV than he must for any other manufacturer's product.

Didn’t know Aj
Will you explain to me?
Doesn’t have to be long and complicated because my brain will melt. Remember im in Kentucky. Haha
I really don’t know......

 

[ajdelange]

The US tried to encourage adoption of electric vehicles by offering a federal tax credit of up to $7,500 to the buyer for each vehicle sold by a manufaturer until the company sold 200,000 vehicles. At the end of the second quarter after that the credit phases out dropping in half every 6 months. Tesla reached 200,000 sales in the second quarter of 2018 so the $7,500 credit was available until 31 December 2018. After that the credit was $2,750 through Junen 2019, $1,875 thereafter and 0 starting Jan 2020. I bought my car in the last few days of 2018 and so, when I filed my 2019 1040 I claimed a $7,500 credit. I had to, effectively, shell out $7,500 less for the car. That is equivalent to a $7,500 discount on the price. It's actually more than that but you asked me to keep it simple.

If you go to a Jaguar dealer and buy an iPace you get that discount. If you go to Prosche and buy a Taycan, you get that discount. If you go to Tesla and buy a M3 now you don't get that discount. The US government is subsizizing these foreign companies at the expense of American Tesla!

 

[Cody the cat]

The US tried to encourage adoption of electric vehicles by offering a federal tax credit of up to $7,500 to the buyer for each vehicle sold by a manufaturer until the company sold 200,000 vehicles. At the end of the second quarter after that the credit phases out dropping in half every 6 months. Tesla reached 200,000 sales in the second quarter of 2018 so the $7,500 credit was available until 31 December 2018. After that the credit was $2,750 through Junen 2019, $1,875 thereafter and 0 starting Jan 2020. I bought my car in the last few days of 2018 and so, when I filed my 2019 1040 I claimed a $7,500 credit. I had to, effectively, shell out $7,500 less for the car. That is equivalent to a $7,500 discount on the price. It's actually more than that but you asked me to keep it simple.

If you go to a Jaguar dealer and buy an iPace you get that discount. If you go to Prosche and buy a Taycan, you get that discount. If you go to Tesla and buy a M3 now you don't get that discount. The US government is subsizizing these foreign companies at the expense of American Tesla!

Ahhhh now I see, or at least have a better understanding.
Seems it’s a
“shoot yourself in the foot” kind of logic.
Im assuming this is a current government decision?

 

[Saskateam]

Tesla and Chevy tried to argue that they should continue to get a subsidy however did not get passed the government. It does not make sense to continue the subsidy for non American companies but remove it from American companies.

 

[Cody the cat]

Tesla and Chevy tried to argue that they should continue to get a subsidy however did not get passed the government. It does not make sense to continue the subsidy for non American companies but remove it from American companies.

It’s more than not making sense,
it’s just stupid.

 

[ajdelange]

The idea was to encourage the adoption of electric vehicles and in that regard it does make sense. Jaguar may benefit but the world at large, including Americans, benefits too when an American buyer chooses an iPace rather than a pollution spewing piece of Detroit iron.

The way to get a piece of legislation quashed in the leftist House is to enlist the help of the leftist main stream media. The Hunt Brothers organized a big campaign whose slogan was "Built by billionaires, sold to millionaires, subsidized by the rest of us". This was accompanied by editorials that talked about the trillions that the treasury would lose and how this was another example of stealing from the poor and giving to the rich. That was enough to do the job in the Washington of today. Surprising that the current program wasn't terminated.

 

[lukefrisbee]

Well I rarely write my senator or the president, but I sent both of em this...
"
There is a Tax incentive given to people that purchase electric cars. I am told this was done to encourage the growth of electric cars.
It isn't very complicated about how much of an incentive an AMERICAN can get but it is flawed.
Let me explain.
The incentive is designed to support the Electric car Manufacturing. However the tax incentive is applied to the first 200,000 cars ANY electric car manufacturer sells. Any as in any NATION. As soon as a car manufacturer produce 200,000 cars its cars no longer have the full tax incentive. However any new company does...any new company including all those outside the USA. So The American Taxpayers are financing the development of the competing industries of other nations.
This should stop. it should have never been allowed to be implemented. Our government should NOT provide incentives for manufacturing companies outside of the USA. It directly impacts those companies that provide jobs to citizens in the USA by giving the foreign companies American Tax Dollars.
Stop it now.
If the Government wants to Make America Great..or Keep it great, then it needs to correct this policy/law. If the Government wants to provide incentives to reduce pollution then provide American Companies producing cars inside AMERICA the incentive, and not all the foreign car makers.
Do it NOW. Change the incentive to ONLY cars made in AMERICA. It actually hurts the American auto manufacturers when their cars have sold too many units to qualify for the tax incentive and companies like Mercedes and Porsche still get to sell cars in the USA with the aid of a tax incentive for the customer."

 

[Saskateam]

Strange thought. Take some subsidy money from oil and gas and put it into ev industry and not impact the tax payer.

 

[Cody the cat]

Well I rarely write my senator or the president, but I sent both of em this...
"
There is a Tax incentive given to people that purchase electric cars. I am told this was done to encourage the growth of electric cars.
It isn't very complicated about how much of an incentive an AMERICAN can get but it is flawed.
Let me explain.
The incentive is designed to support the Electric car Manufacturing. However the tax incentive is applied to the first 200,000 cars ANY electric car manufacturer sells. Any as in any NATION. As soon as a car manufacturer produce 200,000 cars its cars no longer have the full tax incentive. However any new company does...any new company including all those outside the USA. So The American Taxpayers are financing the development of the competing industries of other nations.
This should stop. it should have never been allowed to be implemented. Our government should NOT provide incentives for manufacturing companies outside of the USA. It directly impacts those companies that provide jobs to citizens in the USA by giving the foreign companies American Tax Dollars.
Stop it now.
If the Government wants to Make America Great..or Keep it great, then it needs to correct this policy/law. If the Government wants to provide incentives to reduce pollution then provide American Companies producing cars inside AMERICA the incentive, and not all the foreign car makers.
Do it NOW. Change the incentive to ONLY cars made in AMERICA. It actually hurts the American auto manufacturers when their cars have sold too many units to qualify for the tax incentive and companies like Mercedes and Porsche still get to sell cars in the USA with the aid of a tax incentive for the customer."

Nice work Luke.
I want you on my side in a fight.

 

[Cody the cat]

Strange thought. Take some subsidy money from oil and gas and put it into ev industry and not impact the tax payer.

Your idea is even sweeter when you know it would piss everyone in oil and gas.

 

[AlexD]

Well I rarely write my senator or the president, but I sent both of em this...
"
There is a Tax incentive given to people that purchase electric cars. I am told this was done to encourage the growth of electric cars.
It isn't very complicated about how much of an incentive an AMERICAN can get but it is flawed.
Let me explain.
The incentive is designed to support the Electric car Manufacturing. However the tax incentive is applied to the first 200,000 cars ANY electric car manufacturer sells. Any as in any NATION. As soon as a car manufacturer produce 200,000 cars its cars no longer have the full tax incentive. However any new company does...any new company including all those outside the USA. So The American Taxpayers are financing the development of the competing industries of other nations.
This should stop. it should have never been allowed to be implemented. Our government should NOT provide incentives for manufacturing companies outside of the USA. It directly impacts those companies that provide jobs to citizens in the USA by giving the foreign companies American Tax Dollars.
Stop it now.
If the Government wants to Make America Great..or Keep it great, then it needs to correct this policy/law. If the Government wants to provide incentives to reduce pollution then provide American Companies producing cars inside AMERICA the incentive, and not all the foreign car makers.
Do it NOW. Change the incentive to ONLY cars made in AMERICA. It actually hurts the American auto manufacturers when their cars have sold too many units to qualify for the tax incentive and companies like Mercedes and Porsche still get to sell cars in the USA with the aid of a tax incentive for the customer."

How daft to punish American success and promote foreign manufacturers at the expense of the American tax payer.
This has got to be stopped in its tracks.

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