Tesla has reportedly released a memo to employees stating that the base model Model 3 will likely lose access to EV incentives in the United States in the coming weeks.

Besides Tesla’s massive production ramp, the U.S. government’s tax credit for consumers to buy electric vehicles has been a significant driver regarding the demand for EVs. However, with the passage of the Inflation Reduction Act, those incentives have changed dramatically and could do so again in the coming weeks. According to a memo released to Electrek, the automaker expects to lose incentives on the base model Model 3.

The changed incentives are expected to affect vehicles with batteries made outside of the United States. Currently, to qualify for EV incentives in the U.S., an automaker must assemble the EV in North America, but with the expected changes, the vehicle’s batteries must also be sourced domestically.

This change would luckily only affect a single variant of the Model 3, but annoyingly, it is the cheapest version. The standard range Model 3 is assembled in the United States at the Fremont, California facility but receives its LFP batteries from China, which would make it ineligible for the tax credit.

Electrek did not post any images of the reported memo, nor was the IRS or DOE immediately available for comment to Teslarati regarding the potential changes. However, with the end of the quarter just around the corner, we likely won’t have to wait long to see if these changes are implemented.

Luckily, other Tesla models would be spared if the expected change is put into place. The higher-end variants of the Tesla Model 3 and Model Y both receive batteries made domestically, but the same cannot be said for competitors.

Disturbingly, this expected change could dramatically limit consumers’ options for an EV that qualifies for federal incentives. Outside of the popular higher-end Model 3 and Model Y variants that this regulatory change wouldn’t affect, countless EVs receive their batteries from abroad, meaning that, until new battery production facilities are established and running, they will be ineligible for incentives, potentially hampering the EV market growth in the U.S.

What do you think of the article? Do you have any comments, questions, or concerns? Shoot me an email at william@teslarati.com. You can also reach me on Twitter @WilliamWritin. If you have news tips, email us at tips@teslarati.com!

Tesla warns employees Model 3’s cheapest trim could lose $7,500 tax credit

Tesla has launched new extended service warranties for its electric vehicles that can be purchased straight from its mobile app.

Like combustion engine vehicles, electric vehicles have two main warranties – the vehicle (or bumper-to-bumper) warranty and a powertrain warranty. For electric vehicles, the latter is for the battery pack and electric motor.

Tesla has a leading powertrain warranty for eight years or 192,000 to 240,000 km (120,000 to 150,000 miles), depending on the model. As for the vehicle warranty, it’s fairly standard, meaning four years or 80,000 km, whichever comes first. Tesla has occasionally offered extended vehicle warranties.

Today, the automaker has launched a new offering, and it is selling it directly through its mobile app:

As noted, the agreement is for a period of two years or 25,000 miles, whichever occurs first.

Here is the pricing for each different model:

Here’s the full vehicle extended warranty agreement:

Electrek’s Take

Over the years, I had three Tesla vehicles go off vehicle warranty, and I currently have two of them. I had very little issue with them and certainly nothing that would cost anything close to those amounts.

If it’s something you are worried about, you are probably better off putting that same amount in a savings account. Most likely after two years when this warranty expires, you would still have some, if not all, of that money.

That said, everyone should decide for themselves what is best for them, and that’s why it is great to have the option.

One thing that is a bit concerning is the inclusion into the mobile app. I wouldn’t be surprised if Tesla starts sending out notifications to sell them at times, especially if it needs some money at the end of a quarter.

Ford CFO John Lawler has revealed that the automaker’s EV unit is on track to lose $3 billion this year as it pursues the industry’s most aggressive EV production ramp.

Ford has only recently claimed the spot of #2 EV maker in the United States, but with an incredible production ramp ahead, the company intends to hold its position. But along with this production growth is an equally massive price tag, which Ford CFO John Lawler has revealed this morning as part of a presentation on financial reporting. According to the executive, Ford’s EV unit is set to lose $3 billion this year but is still on track to achieve profitability by 2026.

Ford has the industry’s most aggressive EV production ramp, as it looks to achieve an annual run rate of 600,000 EVs globally by the end of this year and an annual run rate of 2 million units by 2026. Comparatively, the current EV market leader, Tesla, has famously aimed for a 50% YoY production growth, while Ford is now seeking roughly 10x the production they achieved just last year.

As previously revealed by Ford, the company aims to achieve an 8% pre-tax profit margin by the end of 2026, which will only be possible if the Blue Oval can achieve its astronomical 2 million run rate production target.

In defense of this unprofitability, Lawler argued on this morning’s financial call that the company’s “Model e” unit should be seen as a startup and will require this massive investment in order to succeed in the near future.

It should be noted that Ford did not touch on the profitability of the entire business. With the continuing success of its “Ford Blue” gas vehicle decision, it is still possible for the company to achieve overall profitability.

This morning’s financial meeting aimed to explain how Ford plans to report its financial results. The CFO explained that, just as the business now operates in separate units, so will its financial reports. This means that each quarter, each business unit will report its earnings separately; this includes Ford’s gas-powered “Ford Blue” unit, its commercial “Ford Pro” unit, and the aforementioned “Model e” unit.

Ford will also be ditching the region-specific financial reporting, instead opting to report by the five global markets it operates in.

Ford is far from the only legacy automaker that expects the shift to electric vehicles to be costly and unprofitable. General Motors CEO Mary Barra has previously stated that the American auto group also aims for profitability in the 2026 timeframe. Meanwhile, European automakers, including VW Group, Stellantis, and Renault, also expect the massive production shift to affect profitability.

What do you think of the article? Do you have any comments, questions, or concerns? Shoot me an email at william@teslarati.com. You can also reach me on Twitter @WilliamWritin. If you have news tips, email us at tips@teslarati.com!

Ford reveals price tag of its incredible EV production ramp

Posted on
March 23, 2023
by
Charles Morris

Automakers often take apart competitors’ models to learn what makes them tick. In recent years, Tesla has been a frequent target of this feat of reverse engineering, which is called a teardown. Auto manufacturing expert Sandy Munro has taken apart many a Tesla, with highly informative (and entertaining) results. Various legacy automakers have performed their own private teardowns—rumor has it that, when the Model 3 first appeared, a group of German automakers paid an enormous sum to have a couple of units shipped to Germany for their perusal.

Above: A Tesla Model Y (Image: Casey Murphy / EVANNEX).

We’re happy to hear that Toyota recently tore down a Tesla Model Y, because the venerable brand badly needs an infusion of electrical inspiration. According to Automotive News, the teardown may even have pushed Toyota to begin work on a new EV-only automotive platform. The current e-TNGA platform appears to be an existing ICE platform with a battery and a motor shoehorned in, and AN opines that the lack of a proper electric platform may be one reason for the poor performance of the bZ4X crossover that Toyota launched in 2022.

When Akio Toyoda resigned Toyota’s CEO post in January, EV fans saw hope for a new direction. His public statements, however, have been ambiguous. “The new team can do what I can’t do,” said Toyoda. “I now need to take a step back in order to let young people enter the new chapter of what the future of mobility should be like.”

New CEO Koji Sato has hinted at a change of strategy, and at the end of January, Toyota announced it was working on a new platform developed exclusively for EVs, which is expected to become active by 2026.

Automotive News tells us that Toyota decided to develop the new platform after engineers and executives were “impressed” and “shocked” by what they saw in the Model Y’s innards. “Taking the skin off the Model Y, it was truly a work of art,” one Toyota exec told AN. “It’s unbelievable.”

Tesla doesn’t use model years, and its cars may look the same over time, but changes and updates are made on a frequent basis. Recent Model Ys built at Gigafactory Texas that use both front and rear megacastings and a structural 4680 battery pack—an architecture that enabled the automaker to eliminate hundreds of parts and greatly increase overall efficiency. One Toyota estimate shared with Automotive News showed that Tesla had reduced the vehicle’s weight by as much as 220 pounds while improving efficiency and cutting costs.

Since Tesla’s early days, skeptics have predicted that legacy automakers would use their expertise and financial expertise to bury the upstart—the fact that that hasn’t happened reflects a basic difference in corporate cultures. As Automotive News puts it, “Given enough money and time, we’re sure Toyota could produce electric vehicles at the same level as Tesla. It has money, but time is of the essence. And it lacks another essential ingredient: the mindset. Toyota needs a cultural change to accomplish that.”

Reading AN’s report, we’re hopeful that such a welcome cultural change is at hand. “We need a new platform designed as a blank-sheet EV,” one Toyota executive said.

===

This article originally appeared in Charged. Author: Charles Morris. Sources: Automotive News via Teslarati, autoevolution

Related Posts

Elon Musk’s Plans to Improve Cash Flow at Twitter by Next Quarter

It’s been just four months since Tesla CEO Elon Musk took over Twitter, and a lot has happened in that time. Despite declining advertising revenue in recent months, the company may still improve its cash flow by next quarter, according t…

Read More

Celebrating the 10-year anniversary of EVANNEX

I decided to move to South Florida from the Big Apple. It was 2011, and I just got married. I was also (soon after) blessed with a beautiful baby girl. My life was changing, fast. One day, at my parents house, my father called me into hi…

Read More

Tesla Stock More Popular Than Ever with Individuals: WSJ

Tesla’s stock has been popular this year, and retail investors have been no exception to this fact. With tens of billions spent on Tesla shares already purchased this year, the company outpaces any other security by far, and they’re alre…

Read More

Posted in

Model Y,

Tesla,

Toyota

← Previous

Tesla shares (NASDAQ:TSLA) have shown some volatility during the past weeks, but a Wall Street veteran has noted that the electric vehicle maker’s bulls now have a buying opportunity. This was especially the case as the electric vehicle maker will soon be releasing its Q1 2023 delivery and production report. 

As per The Future Fund, LLC co-founder Gary Black, the dip in TSLA stock that numerous investors were looking forward to has already materialized. Black also stated that Treasury yields were dropping, which should be advantageous for equities. 

“We’re getting a Tesla dip that many wanted before 1Q deliveries report 4/2. The 2-yr and 10-yr Treasuries are both plunging (-20bp and -14bp, respectively) which is good for growth equities. Hope folks who were waiting for the dip are buying,” Black wrote on Twitter. 

We’re getting a $TSLA dip that many wanted before 1Q deliveries report 4/2. The 2-yr and 10-yr Treasuries are both plunging (-20bp and -14bp respectively) which is good for growth equities. Hope folks who were waiting for the dip are buying.

— Gary Black (@garyblack00) March 22, 2023

Tesla’s Q1 sales are anticipated to surpass the consensus estimate of 420,000 units for the first quarter, Black noted. Following Tesla’s aggressive price cuts in January, the US and China are both expected to set new records for sales. Europe is also expected to finish strong for Tesla, especially amidst the ongoing Model Y production ramp of Gigafactory Berlin. 

During Tesla’s Investor Day, the company’s management hinted that volume has increased in response to the company’s price reductions, the analyst stated. Black added that the management’s credibility would be significantly damaged if first-quarter volume fails to meet expectations.

I highly doubt $TSLA mgmt would be so adamant on both the 4Q conf call and Investor Day that demand has been strong if 1Q volumes weren’t good. TSLA 4Q vols were 405K so I expect 1Q to be at least 5% above that (425K vs 420K consensus) or mgmt loses a ton of credibility. pic.twitter.com/6HDRZNXUgY

— Gary Black (@garyblack00) March 22, 2023

“I highly doubt Tesla management would be so adamant on both the 4Q conference call and Investor Day that demand has been strong if 1Q volumes weren’t good. TSLA 4Q volumes were 405K, so I expect 1Q to be at least 5% above that (425K vs. 420K consensus), or management loses a ton of credibility,” Black wrote on Twitter. 

The results of Tesla’s aggressive pricing strategy have been quite notable. As per weekly China insurance registration data, Tesla’s registered units for the domestic market increased from 17,032 units to 18,712 units in the week ending March 17. Tesla’s insurance registrations have been on an upward trend for the last four weeks as well. 

Don’t hesitate to contact us with news tips. Just send a message to simon@teslarati.com to give us a heads up.

Tesla analyst: bulls can take advantage of TSLA dip before Q1 delivery results

Tesla told employees that it expects to lose the full $7,500 federal tax credit on its cheapest electric car because the batteries come from China.

Since January, some electric automakers have been enjoying a surge in demand thanks to the new federal tax credit program for electric vehicles coming into place.

Tesla has been the biggest winner since its buyers completely lost access to the tax credit years ago after the automaker hit 200,000 deliveries in the US.

For the last three months, eligible buyers in the US could get a $7,500 tax credit on all Tesla Model 3 and Model Y vehicles, which are the automaker’s two cheapest and most popular models.

However, we knew that things would change by the end of March.

When the new tax credit program was announced, it included requirements for battery production in North America and battery material sourcing in countries with free trade agreements with the US in order to get access to up to half of $7,500 credit.

But the guidance on how these requirements would work was not released in time for the new tax credit coming into effect in January, and therefore, they were waived until the second quarter.

By then, the IRS has been expected to release detailed guidance about how those requirements will be accounted for.

Now Electrek has learned from sources familiar with the matter that Tesla has communicated to employees that it expects the IRS to release the guidance any day now, and the automaker expects to lose the full credit on the Model 3 Standard Range – its cheapest vehicle.

The Model 3 Standard Range is built in Fremont, California, in the US, but its battery pack is using LFP battery cells built in China.

The communication to employees appears to have been done to prepare buyers of those vehicles, as the access to the full credit could change if delivery is done on April 1 rather than March 31 – pending official guidance.

As for Tesla’s other Model Y and Model 3 vehicles in the US, they are expected to retain access to the full tax credit as they are using battery cells built by Tesla or Panasonic in Nevada, California, or Texas.

The battery material sourcing might be more of an issue, but Tesla appears confident that it won’t be the case as a large percentage of its battery materials are sourced from countries with free trade agreements like Australia and Canada.