California grants Tesla $34.7 million tax break to boost production - Dec 17, 2013

As a California resident, I approve! And not just because I love tesla, but because itll bring more jobs and more sales to our state!

Does Model S have the order rate to support the need to build twice as many?
It seems to me that the time to get from reserving a vehicle to Tesla starting to build the vehicle is rather small right now, indicating that their production capacity is close to their order rate. Are they expecting order rates to double? It's already the highest selling expensive car model. How many cars can they realistically sell?

or is the new equipment for Model X, and the article just misrepresented the purchase by saying the equipment would double the Model S capacity?

derekt75 said:

Does Model S have the order rate to support the need to build twice as many?
It seems to me that the time to get from reserving a vehicle to Tesla starting to build the vehicle is rather small right now, indicating that their production capacity is close to their order rate. Are they expecting order rates to double? It's already the highest selling expensive car model. How many cars can they realistically sell?

or is the new equipment for Model X, and the article just misrepresented the purchase by saying the equipment would double the Model S capacity?

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If I had to guess, id say the equipment will be used to build the model x as well, it is time to get all the equipment for that set up.
Model S reservations will also start increasing since TM is accepting reservations from China, which if Elons predictions are correct, will bring in a significant amount of reservations.
Not to mention UK will also be able to purchase a model S in 2014.

With the opening of the European and Asian markets, that number may be quite large...

One can hope!

Edit: Ampd beat me to it !

I wonder if this also means more Super Charging stations

derekt75 said:

It seems to me that the time to get from reserving a vehicle to Tesla starting to build the vehicle is rather small right now, indicating that their production capacity is close to their order rate.

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I am getting my S85 this Saturday and have waited 11 weeks for it!

Tesla could sell more cars if they could build more.

I am in California.

derekt75 said:

Does Model S have the order rate to support the need to build twice as many?
It seems to me that the time to get from reserving a vehicle to Tesla starting to build the vehicle is rather small right now, indicating that their production capacity is close to their order rate. Are they expecting order rates to double? It's already the highest selling expensive car model. How many cars can they realistically sell?

or is the new equipment for Model X, and the article just misrepresented the purchase by saying the equipment would double the Model S capacity?

Click to expand...

Tesla is up to 600 cars a week. That is 10K above their initial projections and the demand isn't slowing, but increasing as worldwide markets come online. Tesla has mentioned that they were going to run Model X's through their existing line, but that was when their Model S production goal was 20K. With the higher demand I will hazard to guess that they will need a completely separate manufacturing line for the Model X. This also gives them the cushion to allow for extra production where needed. I can easily see that the alpha and beta versions of the Model E and an initial test runs of that car could run on those existing lines while tooling up for the big buildup to large scale production in 2017.

Doug_G said:

That tax shouldn't exist in the first place, unless the goal is to kill jobs.

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Well it is California ...

rolosrevenge said:

Well it is California ...

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Well said and so true.

Well... Well said but inaccurate.

http://works.bepress.com/john_bishop/69/

Targeted tax breaks for rapidly growing businesses are a good idea, but the notion that tax breaks in general create jobs (even in CA) is generally perpetuated by companies who want to pad their bottom line.

California grants Tesla $34.7 million tax break to boost production

From AutoBlog

Tesla Motors' plans to expand just got a big boost, as the state of California has announced it will give the Palo Alto-based company a $34.7 million tax break to increase its production capacity. The EV manufacturer is being given a pass on sales and use taxes on up to $415 million worth of equipment, according to a report on the San Francisco Chronicle's website.

Tesla is currently on track to produce 21,500 cars, although the planned expansion should more than double that capacity to 56,500 units, adding 112 jobs at Tesla's Fremont factory. "I'm pleased we could take this action to encourage Tesla to expand its electric vehicle production in California, which will create green jobs and improve our air quality," State Treasurer Bill Lockyer said. The state estimates that between the additional jobs and (hoped for) increase in sales, it will recoup the costs of the tax break in more taxes.

http://www.autoblog.com/2013/12/18/california-grants-tesla-tax-break-boost-production/

derekt75 said:

Does Model S have the order rate to support the need to build twice as many?
It seems to me that the time to get from reserving a vehicle to Tesla starting to build the vehicle is rather small right now, indicating that their production capacity is close to their order rate. Are they expecting order rates to double? It's already the highest selling expensive car model. How many cars can they realistically sell?

Click to expand...

The wait time is still 6 months here in Norway. Also someone in the Tesla system here was saying they could probably sell 10,000 cars here next year if they got the supply.

Personally I think 10,000 is a bit high, but 5,000 would probably be an easy target. That is a huge chunk of the total production volume...

omgwtfbyobbq said:

Well... Well said but inaccurate.

http://works.bepress.com/john_bishop/69/

Targeted tax breaks for rapidly growing businesses are a good idea, but the notion that tax breaks in general create jobs (even in CA) is generally perpetuated by companies who want to pad their bottom line.

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At the very least it shifts job locations.

Has an auto plant been built in the last 30 years without a long list of tax breaks?

Don't offer them they don't get built in your location.

Doug_G said:

That tax shouldn't exist in the first place, unless the goal is to kill jobs.

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Agreed.

Paul Carter said:

From AutoBlog

Tesla is currently on track to produce 21,500 cars, although the planned expansion should more than double that capacity to 56,500 units

Click to expand...

Super exciting. I have only seen a handful of Tesla's in Atlanta, and I never get tired of seeing these beauties, so it'd be great to see more on the road. Anyone have a WAG on how long it might take to upgrade the factory after the new production equipment is purchased?

derekt75 said:

Does Model S have the order rate to support the need to build twice as many?
It seems to me that the time to get from reserving a vehicle to Tesla starting to build the vehicle is rather small right now, indicating that their production capacity is close to their order rate. Are they expecting order rates to double? It's already the highest selling expensive car model. How many cars can they realistically sell?

or is the new equipment for Model X, and the article just misrepresented the purchase by saying the equipment would double the Model S capacity?

Click to expand...

They've only tapped into a few of the many markets they could be in, and have not done any advertisements* to promote the car. The demand is there if they started pushing for sales, but right now they are still supply limited.

If i remember correctly, by early/mid 2015 they are looking to be at a run rate of 40k/year Model S and a similar rate for Model X.

*I think there was one train ad in Norway a while back.

Doug_G said:

That tax shouldn't exist in the first place, unless the goal is to kill jobs.

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I'm not clear about this. Is this a specialized tax on the purchase of manufacturing equipment -- in which case it's ridiculous and a bad idea

-- or is it just that general sales tax applies to the purchase of manufacturing equipment, which is not unreasonable.

...Ah, I see. It's just sales tax. California is one of the states which doesn't exempt capital equipment from sales tax. This is perfectly reasonable. The sales tax break is also perfectly reasonable. In general, I feel sales tax should be pretty low, as all sales taxes are regressive and economy-depressing taxes -- if sales tax were pretty low nobody would worry about this.

Doug_G said:

That tax shouldn't exist in the first place, unless the goal is to kill jobs.

Click to expand...

Reminds me of Republican presidential debates. Was it Santorum? I forget.