A couple of thoughts:
• There isn’t a general surge in EV buying or else people would be buying whatever’s available.
• The size of the reservoir of the Tesla fan club is unknown (to me). IIRC, the company is already cutting prices to move the market.
People know what they like to drive. SUVs are popular all around the world. It is a mystery to me why the EV manufacturers didn’t start with SUVs.
DB2
Unfortunately, I think the IRA is largely to blame for this. Look at which vehicles are not selling and you are likely to see a high correlation with vehicles not eligible for the tax credit. From your article:
Genesis, the Korean luxury brand, managed to sell a mere 18 of its high-end Electrified G80 sedans in 30 days. With 210 units in stock nationwide, that translates to a 350-day supply, according to Cox.
…
Luxury EVs from other manufacturers also faced a similar situation. Models like Audi’s Q4 e-tron and Q8 e-tron, as well as the GMC Hummer EV SUV, had inventories well above 100 days.These vehicles come with hefty price tags that render them ineligible for federal tax credits.
Hawkwin
Who would be driving an EV today if not for the IRA.
At least one part of the reason is that anyone who has done any research knows that all the non-Tesla’s for sale have the wrong charging port on them and that will change in the next year or two.
Mike
I don’t understand. The IRA didn’t make these models more expensive, it just made certain others less expensive. If you would be driving an EV anyway, what does the IRA have to do with it?
Whatsamattayou? You don’t like fooling around with a 5 pound dongle every time you want to fill up?
Again… except Tesla. Tesla is and has been running flat out to produce as many cars as possible. Nearly all are built to order, ie… pre-sold. Production (and sales) are planned to roughly follow 50% increases per year, till the end of the decade.
They have used pricing to manage demand. We bought our 3 and Y shortly before they started cranking up the prices to throttle demand and avoid ridiculous wait times. Current price on the Y is still quite a bit above what we paid (not counting any Federal and State incentives). The 3 has now been dropped in price to be pretty close to what we paid (again, not counting governmental actions).
As Tesla disclosed years ago, they plan to keep driving prices down and perhaps we’re in the beginning stages of that, especially for the 3. I expect further price cuts and eventually stabilization somewhere above the price levels they’ll have for the upcoming Mexican (and other places) model(s). Those are expected to be somewhere around $25k or less and production is planned to dwarf Y production, which is already the best selling vehicle anywhere (perhaps not counting scooter… don’t know about those).
In all this, the only ones making money on EVs are some selected Chinese companies… and Tesla. The others are losing money hand over fist, although Ford is the only company to be transparent on this little issue.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
The IRA removed the tax credit I would have received for buying my preferred EV.
Quibble. Polestar lost $0.01 a share in the first quarter (beat estimates by $0.11). 2nd qtr results to be published tomorrow.
Not the quibble you think… Polestar vehicles are built in China by the Chinese parent company, Geely.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
Nope, still a quibble.
Polestar is no longer owned by Geely. It was spun off last year. It trades under its own symbol (PSNY) and is HQed in Sweden.
Apple products are made in China; doesn’t make it a Chinese company.
Edit: fixed stock symbol.
Take a look here (page 99): https://www.sec.gov/ix?doc=/Archives/edgar/data/0001884082/000188408223000008/psny-20221231.htm#i1928a5ef0b8f4a6195875958f04256bb_1185
See who owns 88.5% of the shares of Polestar? Same guy who (privately) owns Geely.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
And?
So by that logic, the app formerly known as Twitter must own Tesla.
LOL… keep trying.
The point is that some Chinese companies are able to make a profit with EVs. Polestar’s vehicles are made in China by Geely and the same guy in China owns both companies.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
The IRA incentives just went into effect this year. There are about 2M EVs on the road in the US.
So is it a quibble to say most of those 2M would be driving EVs if there was no IRA?
Mike
The IRA REMOVED tax credits from many EVs (and that happened last year, not this year**). Many of those 2M EV owners probably received tax credits under the old law.
Virtually all EVs there were not Tesla or Volt used to be eligible for a tax credit.
EV Tax Credit 2023: Everything You Need to Know | Kiplinger.
Final EV credit rules?
Before the IRA, manufacturers that produced more than 200,000 electric vehicles couldn’t qualify for the EV tax credit because it was phased out once the manufacturer reached the 200,000-car cap. The IRA removed that cap. However, to spur domestic production of clean vehicles, the IRA also requires that the final assembly of qualifying clean vehicles occur in North America.
The vast majority of EVs would still qualify for a credit under the old rules. Few have sold more than 200k.
**https://www.nerdwallet.com/article/taxes/ev-tax-credit-electric-vehicle-tax-credit
If you already purchased or entered into what the IRS calls a “binding written contract” to purchase an EV before Aug. 16, 2022, and expect to take possession of the car at a later date, you’re likely able to claim the credit without meeting this new final assembly requirement.
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Those that did not have a binding contract (me), were no longer eligible for the credit. I had a deposit but not a binding credit. Note this section of the law went into effect immediately with no means for the consumer to adjudicate it. So, yes, I would be driving an EV today if not for the IRA removing my tax credit in 2022.
Yes, I forgot about that. But the point still remains. The vast majority of the ~2M EVs on the road were purchased prior to any effects from the IRA.
And, so, some people, like you did not get the credit. But others who wouldn’t have gotten the credit now do (some Tesla buyers, for example).
Mike
YES! They were purchased when tax credits were more widely available! Every Tesla sold in the USA prior to 2019 was eligible for a tax credit. Even after 2019, they all received a partial tax credit.
The majority of the Teslas on the road today likely received a tax credit and every single one of them older than 2019 received one (excluding any made in 2008 when the law was created - no idea if Teslas were made then).
Last year Tesla sold 1,300,000 cars. That would mean in
2024: 1,950,000 and in
2025: 2,925,000 and in
2026: 4,387,000 and in
2027: 6,581,250 and in
2028: 9,871,876 and in
2029: 14,807,812 and in
2030: 22,211,718 cars to be produced, plus or minus.
Anything is possible, I suppose, but that seems a tad optimistic.
That would give Tesla about 30% of the global car market…
DB2
No.
If you were to hunt for the specific guidance/goal, Musk was clear that this was a long term average which might be exceeded or fall short in any year to year comparison. I forget when it was said, but that timing is important to determine any projected future path. I know they grossly exceeded that guide in the past but can’t say (without digging up the info) where 2023 will fall on that.
As an FYI, the Mexican plant is supposed to “eventually” be able to produce 4 million units a year by itself and it appears that perhaps Berlin and definitely the next site (I figure India) would get similar treatment.
All that being said, 20mm vehicles per year is targeted for 2030.
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
This isn’t correct as far as I recall. Tesla’s had a partial credit* in the four quarters after they hit 200,000 in 2018, but after that there was zero tax credit available until the new law passed. Not only that, but Tesla’s STILL comprised the majority of all EV sales in all those quarters of no tax credit available (from Jan '20 through Jan '23). For example, the Tesla I purchased in 2021 had no tax credit available.
* Tesla tax credits were:
$3750 January 1 to June 30, 2019
$1875 July 1 to December 31, 2019
$0 thereafter until IRA passed and added new credit beginning on 1/1/2023