Is Your Tesla Dealership Spreading FUD Around The Tax Credit?

[jordanhm]

Is Your Tesla Dealership Spreading Fear, Uncertainty, and Doubt Around The $7500 Tax Credit?

A few weeks ago, I went into the Tesla Dealership in Scottsdale, Arizona and spoke with a Customer Experience Specialist who was very knowledgeable. I mentioned that I'm looking at a Model S and my current lease on my Chevy Volt is over in September (yes, I'm upgrading to a Tesla!). At that time, he said they were running about 2 months for Model S deliveries.

Last weekend I went to take a test drive of Model S with my family. An Owner Advisor went with us on the test drive and he was also very knowledgable about the car. I explained my current lease situation and I also discussed taking advantage of the Federal Tax Credit as I know that once Tesla sells 200K cars in the US, this credit starts to phase out. My Owner Advisor then states, we are already on 192K cars, so you may want to put an order in soon because if you wait for an August delivery, there is no telling if the tax credit will be available.

At that point, I really didn't know how many total cars Tesla sold in the U.S., but knew Tesla had a very good Q1 with ~25K vehicles delivered (Model S & X combined), so about 8k deliveries a month.

So, on May 20th, I put my order in on a Model S 75 with a late June/early July deliver as I knew I had 7 days to cancel or make any changes.

I also did some research during the week on the Federal Tax Credit as well as some articles on Tesla US delivery numbers. Here is one of the better articles I found: Predicting When US Federal EV Tax Credit Will Expire For Tesla Buyers

Basically, there is only one scenario that has Tesla hitting 200K deliveries in the U.S by the end of 2017. And for me, I was only looking at August 2017, so there is basically zero chance that happening.

On May 27th, I called my Tesla Owner Advisor and we discussed this and I said I wanted to change my delivery option to August which was available as an option. He then stated they have a Model S in their dealership that has a VIN with 192,xxx and he recommends not delaying my delivery. I then said VIN #'s are global and that has nothing to do with U.S. deliveries and that I wanted him to change to delivery date to August. He then mentioned something about President Trump and things could change and that is out of his and Tesla's control.

I then said stated I except all risks if I don't get the tax credit, so please change my delivery date to August. My owner advisor made the change on May 27th and I verified the change in My Tesla and took a screen capture.

On May 28th, I got an email Tesla that my order is confirmed. I then got a follow up email on May 28th that my estimated delivery date is Late June - July.

I was pretty aggravated since the delivery date was just changed to August. The other thing to point out is that I will be traveling most of July for work and/or family vacation and simply won't be around to take delivery earlier.

Has anyone else had a similar issue with Tesla Owner Advisors mis-informing customers about the tax credit and spreading FUD around it to close deals sooner?

I thought I was purchasing a Tesla, not going to the corner used car lot!

Regards,
Jordan

 

[kort677]

what is your point? regardless of the the tesla person being a bit less than correct you bought a car you wanted and if you qualify you'll get the tax credit.
the screw up on the delivery date is another issue.

 

[TexasEV]

Tesla doesn't have dealerships. It has stores.

 

[Bet TSLA]

I've not experienced that in a showroom. However, I got a call around the beginning of May asking if I wanted to upgrade my 2014 P85. The sales guy claimed I should hurry because the federal incentive would run out in June or July because Tesla would have sold 200K cars. I responded that this was completely bogus, in part because all that mattered was cars sold in the US. He didn't back off of his claim.

 

[jordanhm]

I've not experienced that in a showroom. However, I got a call around the beginning of May asking if I wanted to upgrade my 2014 P85. The sales guy claimed I should hurry because the federal incentive would run out in June or July because Tesla would have sold 200K cars. I responded that this was completely bogus, in part because all that mattered was cars sold in the US. He didn't back off of his claim.

That is exactly the kind of stuff I'm talking about.

 

[jordanhm]

what is your point? regardless of the the tesla person being a bit less than correct you bought a car you wanted and if you qualify you'll get the tax credit.
the screw up on the delivery date is another issue.

The point is that I would have ordered the car in July and not in May and the root of the issue was Tesla providing mis-information about Tesla hitting 200k cars and the federal incentive would run out.

 

[jordanhm]

Tesla doesn't have dealerships. It has stores.

I stand corrected. Yes, Tesla store.

 

[TexasEV]

There is a thread somewhere about stupid things Tesla employees have said. This one about the tax credit belongs there. I don't believe he was trying to deceive, I think it's more likely he misunderstood. They get things wrong about the car, why would you expect them to understand tax law?

Remember Hanlon's razor-- Never attribute to malice that which is adequately explained by stupidity.

 

[jordanhm]

There is a thread somewhere about stupid things Tesla employees have said. This one about the tax credit belongs there. I don't believe he was trying to deceive, I think it's more likely he misunderstood. They get things wrong about the car, why would you expect them to understand tax law?

Remember Hanlon's razor-- Never attribute to malice that which is adequately explained by stupidity.

I wasn't asking him about the tax law, I have my account for that.
Could be a misunderstanding and that is a training issue that needs to be addressed.
Point is they shouldn't be spreading false information about Tesla hitting 200k delivered in the US when it is not true yet just to push folks to order sooner.

 

[johnnyS]

Tesla sales people may not be on commission, but they do have sales goals. As a result they do try to put a little pressure on customers. It was much different with my 2012 model S than with our 90D delivered in December. I was interested in getting one of the last free supercharging for life cars (still available) and also a 2016 tax break. It would not have been the end of the world if we got a 2017 tax credit. Each step of the process the sales staff pushed us to rush.

 

[Troy]

Hi, @jordanhm. The article you have linked to in the opening message explains the topic correctly (except it should be clearer that only USA sales count towards the 200,000) but doesn't have the correct numbers. It uses estimates for 2014 and 2015 USA sales but Tesla has published 2014 and 2015 USA sales here (look at the last table on page 1). Therefore this is not a very good source either. Here is my version:

The $7,500 Federal Tax Credits Explained
We only need to guess the quarter Tesla will hit 200,000 USA sales because that's how the rules are defined. For example, if Tesla hits 200K on any day in Q1 2018, full credits will continue until the end of Q2 2018 (June 30th, 2018). Whether they hit 200,000 USA sales on Jan 1st or March 31st, 2018 doesn't change the deadline. Therefore the exact date is not important but the quarter is. It turns out, there are only 2 realistic quarters to consider. Either they will hit 200K at the end of Q4 2017 or at the beginning of Q1 2018. Therefore there are only two possible sets of deadlines:

Pessimistic Scenario: Tesla hits 200,000 USA sales in Q4 2017 (50% likely)
$7,500 for deliveries until Mar 31, 2018
$3,750 for deliveries until Sep 30, 2018
$1,875 for deliveries until Mar 31, 2019

Optimistic Scenario: Tesla hits 200,000 USA sales in Q1 2018 (50% likely)
$7,500 for deliveries until Jun 30, 2018
$3,750 for deliveries until Dec 31, 2018
$1,875 for deliveries until Jun 30, 2019

As of today, Tesla sold 129,472 cars in the USA according to my calculation and they are expected to hit 200,000 on Jan 2nd, 2018. However, because it is such a close call between Q4 2017 and Q1 2018, both scenarios are 50% likely at this time. In the future, for the latest info on this issue, you can open THIS page and scroll all the way to the right. If you are a Model 3 reservation holder, check out the Model 3 Delivery Estimator. It integrates this information to the output based on your delivery estimate. If you want to read the official rules, open this page, scroll down and expand the "Phaseout" section.

 

[jordanhm]

Hi, @jordanhm. The article you have linked to in the opening message explains the topic correctly (except it should have been clearer that only USA sales count towards the 200,000) but doesn't have the correct numbers. It uses estimates for 2014 and 2015 USA sales but Tesla has published 2014 and 2015 USA sales here (look at the last table on page 1). Therefore this is not a very good source either. If anybody is looking for a simple explanation of this topic, read on:

The $7,500 Federal Tax Credits Explained
We only need to guess the quarter Tesla will hit 200,000 USA sales because that's how the rules are defined. For example, if Tesla hits 200K in Q1 2018, full credits will end on June 30th, 2018. It doesn't make any difference whether they hit the limit on Jan 1st or March 31st, 2018. Hitting the limit on any day in Q1 2018 means full credits will continue until the end of Q2 2018. Therefore the exact date is not important.

It turns out, there are only 2 realistic quarters to consider. Either they will hit 200K at the end of Q4 2017 or at the beginning of Q1 2018. Therefore there are only two possible sets of deadlines:

Pessimistic Scenario (50% likely)
$7,500 for deliveries until Mar 31, 2018
$3,750 for deliveries until Sep 30, 2018
$1,875 for deliveries until Mar 31, 2019

Optimistic Scenario (50% likely)
$7,500 for deliveries until Jun 30, 2018
$3,750 for deliveries until Dec 31, 2018
$1,875 for deliveries until Jun 30, 2019

According to my calculation, as of today, Tesla sold 129,472 cars in the USA and they are expected to hit 200,000 on Jan 2nd, 2018. However, because it is such a close call between Q4 2017 and Q1 2018, both scenarios are 50% likely at this time. In the future, for the latest info on this issue, you can open THIS page and scroll all the way to the right. If you are a Model 3 reservation holder, check out the Model 3 Delivery Estimator. It integrates this information to the output based on your delivery estimate. If you want to read the official rules, open this page, scroll down and expand the "Phaseout" section.

Thanks for the great info. Seems like Tesla sales folks need some training on this information, so they can stop misinforming potential customers. Now I just need to figure out who to talk with to make sure my delivery of my Model S is August and not late June/July.

 

[Bet TSLA]

However, because it is such a close call between Q4 2017 and Q1 2018, both scenarios are 50% likely at this time.

No, they aren't equally likely. Elon has said he would try to time it to work best for Tesla customers, so that means they'll try to make it happen at the beginning of a quarter. If the numbers are anywhere close, they can do that easily by prioritizing foreign shipments of S and X.

 

[Troy]

@Bet TSLA, I know. I saw that tweet too. My calculations already include this trick. In other words, when I said they are expected to hit 200,000 USA sales on Jan 2nd, 2018, that already includes allocating most of their usual USA Model S&X production in Q4 2017 to Europe and Asia. Each quarter Tesla sells about 25,000 cars. 15,000 of those are in the USA. My calculations assume that instead of the usual 15,000 USA deliveries, they will deliver only 6,000 cars in the USA in Q4 2017 and will send the other 9,000 to Europe and Asia, on top of the regular 10,000 units. You can see this 6,000 number here in column AH. With that in mind, the calculations show Jan 2nd, 2018. If I cancel this trick, then it shows Dec 22nd, 2017. In Q4 2017, Tesla is expected to deliver 24,000 Model 3 cars. They can't prioritize EU and Asia Model 3 deliveries in Q4 2017 because those cars won't be ready by that time.

Model 3 for Canada production is expected to start on 4 Dec 2017, Europe production on 22 Dec 2017 and Asia on 22 Feb 2018. Q4 2017 is too early for EU and Asia. They could and might need to prioritize Model 3 Canada deliveries as well, besides Model S/X Asia and Europe deliveries. My guess is, they will do the "clear all Model S/X backlog in Asia and Europe" thing but they won't do the "stop Model 3 USA production and start sending Model 3's to Canada" thing in Q4 2017. It would cause too much disruption to the supply chain. The hardware in Canada cars is different meaning they would need those different parts in large numbers too quickly. The suppliers might struggle with that. Also, they wouldn't be able to use some of the USA Model 3 hardware if they postpone USA production and those unused parts would need to be stored somewhere. Too much trouble and too much planning in advance would be required.

To summarize, Tesla can only postpone the deadline by 11 days, based on my calculation.

 

[schonelucht]

Tesla doesn't have dealerships. It has stores.

Yes, and the point of having stores was to avoid the usual bad customer experience of dealerships where sales people pressure customers to sign and commit soon, because 'this deal won't last' and assorted lies... But it seems corporate is getting a taste of the 'time limited deal' pressure sales too, seeing how they handle the free unlimited supercharger on/off/on/off perk lately. So maybe this is the new normal where Tesla stores are moving towards behaviour previously more associated with dealership sales people.

 

[FlatSix911]

Is Your Tesla Dealership Spreading Fear, Uncertainty, and Doubt Around The $7500 Tax Credit?

I also did some research during the week on the Federal Tax Credit as well as some articles on Tesla US delivery numbers. Here is one of the better articles I found: Predicting When US Federal EV Tax Credit Will Expire For Tesla Buyers

Bottom line ... Scenario 1 or 2

 

[Spidy]

I don't believe he was trying to deceive, I think it's more likely he misunderstood. They get things wrong about the car, why would you expect them to understand tax law?

Honestly I'm not buying it.
You don't have to understand tax law. You just have to understand that the tax credit is based on the cars sold in the US, while the VIN is global, which he should know. Those are pretty simple concepts that someione who was working there on his first day should understand if OP told him that and he should easily have been able to verify himself and then change the delivery date.

In addition you would also have to be ignorant of the fact, that this is for the manufacturer and not the car model, because otherwise with 40-50k Model X VINs Tesla would already have been above the 200k for some time.

The tax credit has been the same for a long time and at least leading up to the 200k cut off phase it is really simple to understand. Understanding Tesla's new Supercharging rules or constant changes even on custom ordered cars between confirmed orders and delivery is a lot more difficult to keep up.

For me it is rather obvious this is a sales guy trying to make a Q2 sale.

 

[kort677]

For me it is rather obvious this is a sales guy trying to make a Q2 sale.

a car sale person saying something to move a sale along? shocking, hard to believe!

 

[Spidy]

a car sale person saying something to move a sale along? shocking, hard to believe!

It was always seen as a big bonus for Tesla and something people loved to tell others about that Tesla did not have your typical dealership car salesmen. People posted on the forums how they liked it to be able to go into the store, talk about the car, sometimes even do a test drive with zero pressure to buy the car.

 

[kort677]

that is all true but tesla sales people like many others in sales positions do have quotas to make. maybe the pressure to move product has overtaken the sales staff and the tesla stores are under pressure to move cars.