Should I wait to Order MYLR? Tax Credit?

[acpd]

I am looking to buy MYLR but not in a huge rush. Does it make sense to wait till 2023 to order? Below are my reasons.

1) Interest rate going up like crazy, don't see Tesla raising prices. It is already costing much more to finance.

2) Potential Tax Credit? $7,500 is a lot, although not guaranteed, there is a good chance.

3) Tesla delivery times are dropping. It was April 2023 - July 2023 in July. Now 6 months sooner ( 2 months passed since July and delivery times are another4 months shorter). So sounds like demand is slowing.

4) Heard some rumors that Tesla might even drop prices due to compilation is increasing.

 

[Zalick]

researching the tax credit today and it appears there is a requirement that the battery components are sourced in the USA. Teslas is sourced from China. Apparently most EVs won’t qualify due this requirement.

 

[LLWS]

You gave several reasons you don't want to order now based trying to perfectly predict the banking, public policy, and manufacturing sectors simultaneously. It's going to be difficult to make a cohesive argument against all these possibilities when you did't give a reason you might order now other than potentially saving on interest rates.

But, if I were to argue the point just for fun... I choose to view the $250 order fee as establishing an option contract. The order sets in place an agreement for a stated price, at some point in the future, you have the right to buy a car they deliver which is configured in the colors, wheels, and software configuration you select. While in contract, you retain the right to decline the car one time and have Tesla build you another car. However, the order provides a consumer protection pertaining to the original pricing structure at the time you execute the order. If prices go up you won't incur those price increases while in contract.

Tesla has pretty clearly established the price the market is willing to pay. It's irrefutable there is far more demand than manufacturing going on at the moment. Existing owners of one or more Teslas are likely secretly hoping Tesla announces a price increase of $7,500 on January 1st. By Tesla making a significant price increase it will immediately stabilize the used car market which is key to Tesla owners like myself who somewhat frequently pickup new Teslas, i.e. new orders. Tesla would take some bad press for increasing prices, but we're already seeing it happening with other brands increasing prices somewhat commiserate with the tax relief.

The point of all this comes down to this: Why not take a $250 bet against a price increase over the next 90 days? If the car shows up too early decline it. If it shows up again early decline that one and re-order the car. It's $250 to prevent getting a price increase. Seems like a pretty worthwhile bet to me.

 

[240vPlug]

I am looking to buy MYLR but not in a huge rush. Does it make sense to wait till 2023 to order? Below are my reasons.

1) Interest rate going up like crazy, don't see Tesla raising prices. It is already costing much more to finance.

2) Potential Tax Credit? $7,500 is a lot, although not guaranteed, there is a good chance.

3) Tesla delivery times are dropping. It was April 2023 - July 2023 in July. Now 6 months sooner ( 2 months passed since July and delivery times are another4 months shorter). So sounds like demand is slowing.

4) Heard some rumors that Tesla might even drop prices due to compilation is increasing.

To me your arguements are a pretty compelling reason to wait. I would put your number is a finance calculator and see how much extra interest you pay over the life of the loan if interest rates were to go up a point or two. That way you can sort of compare apples to apples.

 

[arbitrage000]

I'd put down the $250 and see what happens. I wouldn't bet against another price increase. If you have a trade in it will devalue.

Also I'd be really surprised if an order today gets fulfilled in December despite what the order page is estimating. Tesla is currently delivering Dec/Jan/Feb MYLR orders with some Oct/Nov (even a few Sep) orders still being delivered. They still have to get through the Mar-Aug orders in the next 4 months so a Sept order is very likely into 2023 anyways. March orders have estimates of Oct-Nov delivery right now.

That said Tesla does like to prioritize higher margin orders so you may see some Sept orders deliver for EOQ in December.

 

[acpd]

researching the tax credit today and it appears there is a requirement that the battery components are sourced in the USA. Teslas is sourced from China. Apparently most EVs won’t qualify due this requirement.

Ah.. what about SR MY that Tesla is testing with employees only?

 

[AndrewZ]

New vehicle prices need to come down for us to have conquered inflation, that is one component of what central banks are targeting with the interest rate hikes. And they'll continue hiking rates until demand and supply are balanced such that prices come down, that's the reality IMO.

I'd be surprised if a single vehicle qualifies for the full $7500 but never say never, and the next question would be how many vehicles qualify since domestic capacity for materials and manufacturing is pretty limited.


The tax credits are really not at all friendly to the current supply chain, but that's kinda the point

 

[Unclepaul]

Trying to game and time orders with Tesla is a challenge. Everyone wants their delivery date to come together at the best possible time, but it is often a moving target, and good things often happen more by chance than planning.

Buy the car when you need the car. Pricing, Deliveries, configurations, interest rates and technology are all pretty fluid right now. Throw in the governments confusing rebates make it even more challenging.

 

[acpd]

You gave several reasons you don't want to order now based trying to perfectly predict the banking, public policy, and manufacturing sectors simultaneously. It's going to be difficult to make a cohesive argument against all these possibilities when you did't give a reason you might order now other than potentially saving on interest rates.

But, if I were to argue the point just for fun... I choose to view the $250 order fee as establishing an option contract. The order sets in place an agreement for a stated price, at some point in the future, you have the right to buy a car they deliver which is configured in the colors, wheels, and software configuration you select. While in contract, you retain the right to decline the car one time and have Tesla build you another car. However, the order provides a consumer protection pertaining to the original pricing structure at the time you execute the order. If prices go up you won't incur those price increases while in contract.

Tesla has pretty clearly established the price the market is willing to pay. It's irrefutable there is far more demand than manufacturing going on at the moment. Existing owners of one or more Teslas are likely secretly hoping Tesla announces a price increase of $7,500 on January 1st. By Tesla making a significant price increase it will immediately stabilize the used car market which is key to Tesla owners like myself who somewhat frequently pickup new Teslas, i.e. new orders. Tesla would take some bad press for increasing prices, but we're already seeing it happening with other brands increasing prices somewhat commiserate with the tax relief.

The point of all this comes down to this: Why not take a $250 bet against a price increase over the next 90 days? If the car shows up too early decline it. If it shows up again early decline that one and re-order the car. It's $250 to prevent getting a price increase. Seems like a pretty worthwhile bet to me.

Love the options analogy!! That would protect against price hike.

I am still leaning towards waiting at least little longer to see what shakes out.

 

[Unclepaul]

New vehicle prices need to come down for us to have conquered inflation, that is one component of what central banks are targeting with the interest rate hikes. And they'll continue hiking rates until demand and supply are balanced such that prices come down, that's the reality IMO.

I'd be surprised if a single vehicle qualifies for the full $7500 but never say never, and the next question would be how many vehicles qualify since domestic capacity for materials and manufacturing is pretty limited.


The tax credits are really not at all friendly to the current supply chain, but that's kinda the point

Governments raising interest rates to quell inflation in counter-intuitive. Higher rates RAISES the costs of everything you buy.

 

[acpd]

New vehicle prices need to come down for us to have conquered inflation, that is one component of what central banks are targeting with the interest rate hikes. And they'll continue hiking rates until demand and supply are balanced such that prices come down, that's the reality IMO.

I'd be surprised if a single vehicle qualifies for the full $7500 but never say never, and the next question would be how many vehicles qualify since domestic capacity for materials and manufacturing is pretty limited.


The tax credits are really not at all friendly to the current supply chain, but that's kinda the point

Agreed! Current prices are insane. to be honest any price increase of MY, i would be out.

 

[AndrewZ]

If you wait long enough, the hubbub around delivery timelines might change. Tesla is ramping up two massive new factories, has Shanghai going like crazy, etc in this environment of raising interest rates. We already see inventory in the lower volume higher priced S and X variants, I think it's just a matter of time before we see 3 and Y inventory.

There might not be much of a wait by the time you want to buy

Governments raising interest rates to quell inflation in counter-intuitive. Higher rates RAISES the costs of everything you buy.

Higher financing costs yeah so it's kind of a double-edged sword, but the central banks' #1 mandate is price stability. Once prices stabilize, rates will come down again.

It's probably really difficult to time perfectly, but you don't want to buy when both prices and rates are high

 

[240vPlug]

Prices will come down when demand does. Used vehciles should see the significant declines first. Interest rates make new vehicles less affordable and will push buyers toward cheaper used vehicles.

 

[LLWS]

We should start plotting the used car value now versus when a million people order a Y in December and try to trade-in their cars around March.

 

[240vPlug]

We should start plotting the used car value now versus when a million people order a Y in December and try to trade-in their cars around March.

Good point!

 

[acpd]

We should start plotting the used car value now versus when a million people order a Y in December and try to trade-in their cars around March.

Be careful even with December. Tesla could just deliver before end of December. Safest time to order would be 12/31/22

 

[acpd]

We should start plotting the used car value now versus when a million people order a Y in December and try to trade-in their cars around March.

It's only matter of time. Used car prices will go down when supply catches up with demand. Tax credit will expedite this but they will go down, it's not matter of if, it's when!

 

[BSparx]

Be careful even with December. Tesla could just deliver before end of December. Safest time to order would be 12/31/22

AGREE! It is likely Tesla could find itself sitting on some inventory at year end.

There is a group of people who are ready and want their cars as soon as possible. Then there are many others who would rather slide the delivery date to take advantage of the US Tax credit (which is a poor piece of legislation).

When this first group is depleted it will be interesting to see what happens.

 

[Silicon Desert]

Be careful even with December. Tesla could just deliver before end of December. Safest time to order would be 12/31/22

Perhaps.... assuming Tesla doesn't push out a bunch of cars with marginal production flaws in order to make the year look good. This is known to have happened.

 

[LLWS]

Okay here you go. I was checking values on my 2020 LR Model 3 19k miles as my MYP is about two weeks out.

August 31: $50,750 (highest offer Driveway.com)

September 12: $47,257 (highest offer Driveway.com)

Tesla offered me $48,700 on Sept 13th trade in on the MYP.

Based on the rapid turn in the used market it’s possible the most cost effective thing to do is order an MYP immediately before your trade is worth way less than you might think.