The GREAT Debate: Does The Gov't-issued Tax Incentive That Starts Winding Down In 2019 MATTER For Tesla?

Wealthy people do have a way of always finding a way to hang onto their money. However, if you are shelling out $1000 for a phone or $2300 for a suit, or $12000 for a bicycle, a gov't subsidy that is disappearing (that you likely believe should not be coming to you anyway), will not influence your decision to by the BEV you really want. If you want a Model S you will get one. If you like the Mission E, it will be in your driveway. The subsidy will not be an influencer to most.

Not as much as their inability to create competitive products that are of premium-price-class positioning.

As long as Tesla was the only premium-price-class EV, it was the only game in town and the tax break on a $100K car was nothing really.

Now with that amount gone and no affordable Tesla model, aging Models S and X, quality control glitches, reliability issues, and with Audi, Porsche, et. al. coming, Tesla is in deep caca.

@MD. The market will be the judge. That is for sure. But the Model S outsells the S-Class. People can say it isn't premium. But buyers still buy it and certainly pay for the privilege. How long that lasts is anybody's guess.

I think Audi will blister Tesla and I'm NOT an Audi fan. Tesla's dead or sold to someone for the brand name within a year or so.

Wanna bet?

@joneshamilton "Dude" ask @MD if buyers equate the Model S to an S-Class. Not every luxury buyer wants quilted leather and wood that shines so bright it looks like plastic or to deal with dealers with an attitude. It is a big world out there and not everyone thinks the same. Better yet drop by a Benz dealer and ask them yourself. Then you can ask the Ferrari and Lamborghini dealers how many sales they lost to McLaren since they launched the MP4-12C. Both cars have been disruptors in the automotive space.

@MD- Your Audi comment is questionable. If nobody buys the A8, year after year, why would they care if it was a BEV? Porsche has a shot with the Mission E, but even the Panamera does not do big numbers. A BEV 7 Series? or LS BEV from Lexus? A version of the S-Class as a BEV is the one to watch to see if it can pull back share from the Tesla Model S.

@CC Your reasoning is illogical. To say that because no one buys the A8 that an Audi EV is dead in the water is the height of ridiculous thinking. There is no causal relationship between the failure of the terrible new A8 and an Etron being successful. Audi's crossovers do nicely. Why haven't they been destroyed by the A8 curse?

Tesla doesn't do "big numbers" either.

The Audis will have been designed and engineered by a company that has experience designing cars and knows that they must be fully engineered, developed, and prototyped. Tesla doesn't know a lot about car design and they certainly don't believe in engineering and prototyping.

The Audis will be a lot better looking than Tesla Fusionesque blobs.

Audi is about to score big with EVs.

Sorry Canadian Comments --but BUYERS of TESLA S MAY compare their cars to a Mercedes S class -but that is just wishful thinking on their part - the Model S is at least a class below the S-Class - and it will never really compete with the Prestige of the Mercedes S- Class. Remember - Tesla sets its prices in stone - and have no idea what they would command on an open market .ANd Yes - the Chevy Impala - and the Buick LaCrosse outsell the S-class too - and they are not in the same league either.

YOu are comparing Pomegranates with Apples.

The fact is - if one manufacturer has the ability to offer a $7500 rebate - and the other doesn't - that puts the one that cannot do so at a major disadvantage for most people. Yes - there are some to whom money means nothing - but they buy real Premium class cars - not a tesla. ANd for Tesla - especially at the Low end market - who has ALREADY admitted that they cannot make money on a $35,000 Model 3 - that their competition can offer a better value - offer a discount at a "dealer" and get a rebate. Tesla cannot compete with that.

Worse - Tesla is completely invested in its current Technology - Lithium Battery technology - and when Solid State Batteries - which will hold more charge - charge in less time - and offer greater range - come to - they will be stuck with a Billion dollar investment in obsolete battery technology - and THAT is when Tesla will bite the dust.

Tesla has survived worse in the last 10 years, and is in its strongest position ever. The federal tax incentive rolloff plan is very well understood and turn out to be the best scenario Tesla supporters have hoped for. It is already well into its 5000/week production rate, so over 100000 customers will enjoy the full tax incentives, and hundreds of thousands more with partial credits. Knock on wood and hope the GOP is still sane enough to keep the tax plan in tact.

As for Tesla's build quality I must say the casual critics here are ill informed or denying the fact that Tesla is constantly improving. My car was built in mid June. It is flawless, panel gaps are consistent and are no worse than my own Porsche. The design is what it is, take it or leave it. It took me less than 2 minutes to get used to the layout and control. The debate about the center display for a while was fierce and was one of the biggest FUD target. Now nobody talks about it because it's really is a non issue. I get used to it without even trying.

The main concern for EV adopters is battery life. Recent published data from actual users shows that the battery degradation is slow and approaches around 10% after 200K miles. It means that my 310-mile Model 3 will have a range of at least 280 miles after 15 or more years of use. I don't think a gasoline car will have such a high reliability confidence on its engine or transmission life.

Competition will be intense for Tesla but it will be a good thing for consumers. It is welcome and expected according to Musk's master plan. Don't forget that Tesla was created in Silicon Valley and is thriving in it. For those who live and work here, competition is like coffee, we can't live without it.

Properly maintained ICE vehicles have no problem achieving 15 years of use - the average car in the usa already is 11.6 years old - and that is an average - many are already showing far more than 15 years. Automatic Transmissions are far more reliable than they once were - noting that only less than 10% of them EVER fail - most go from Purchase to Junk Yard without even being serviced properly - and standard transmissions can last even longer. ANd most ICE cars have a far greater range than 280 miles too.

Actually - Tesla is not in its strongest position - it has already admitted that it cannot provide the BASE model 3 at $35,000 and remain in business - which means they priced it too low. It has Thousands of Deposits that might have to fulfill - and eventually someone is going to sue them to fulfill the deposits.

However - the longer it takes for Tesla to produce the Base Model 3 - the sooner it will have competition - and that is where Tesla - with its policy of NO discounts - and limited sales points - is at a disadvantage. Frankly - AS a human made product - I know that there will be defects - and eventually a State wide tow to the only service point that can reset my computer - is not something I would put my money in (TESLA has not released the information needed for an outside company to provide a reader for its computers)

"well into its 5000/week production rate"? With a herculean effort they made 5000 in one week. But they aren't at a steady state 5000/week for sure based on Musk's stated demands of the work force. Those demanded conditions aren't sustainable. What are the odds Tesla will produce 65000 model 3s in Q3 plus a normal quarters worth of Model S and X vehicles? Do that and they then can claim 5000/wk production rate.

For those who were looking for an ENTRY LEVEL base Model 3 - it surely will have an major effect.

It appears that by the time Tesla actually produces BASE Model 3s - there will be other competition on the market. Now - do the math - the new competition will qualify for the $7500 full rebate - while Tesla will not. So while the Tesla will cost $35,000 (Maybe) - the Buick or Audi or other will cost $27,500 at list - And remember - Tesla does not DISCOUNT its offerings - while other companies will be selling through dealers who CAN do so. The difference could be far greater than the rebate - and surely there will be MANY who will leave Tesla.

@MD I was comparing like products. If you want to hang a right and talk SUV's, fine. The Q7 did about 39k units in 2017 in the USA. The Model X did 22k units in the same period. And I guess at a much higher price point. The Etron will sell I am sure and be a good product. To whom and in what quantity we will have to wait and see. But the numbers, as shown above, are not big. The Model S did about 28k units in 2017. The S-Class did approx 16k units in 2017 in the USA.

@jones

Lol. Did Elon kick your ass sometime? Keep drinking the kool-aid. Nothing wrong with the build quality of the latest Model 3s. You should sit in one sometime - if they let you in the store.