EV Subsidies?

[terry274]

My question was for all the people who say "end all subsidies". I think all subsidies should be ended, both oil and electric. But I freely admit there is a lot I don't know about this subject.
I don't own an electric vehicle, but one would work for my usage scenario.

 

[JeffKeryk]

You guys keep moving the goal post. The EV subsidy is going to the end user and the manufacturer, the subsidy the oil company gets is going to the producer.
Send me $100 every month so I can lower my cost of fuel, that would a comparable subsidy.

The goal of subsidies is to lower the cost of a product to consumers. Subsidies come from your and my taxes.
You are 100% right in that subsidies come in various forms. Oil subsidies are decomposed into explicit and implicit subsidies.
Explicit subsidies occur when the retail price is below a fuel’s supply cost.
Implicit subsidies occur when the retail price fails to include external costs and/or there are preferential consumption tax rates on energy.

 

[Ws6]

Just shows you only want to hear bs that makes your case look good.
Real taxation rates can be quite high on the poor.

Also That’s the thing, most of them aren’t choices.

My folks either paid the property tax or were homeless, they could not get approved for an apartment due to their income.

Wisconsin in -20F and homeless wasn’t an option.

My father broke his back, damaged his neck and tore his shoulder apart at work and randomly was paralyzed until he forced the insurance company to approve surgery which took years. He tried getting work but no one would hire a cripple.
The final decision and settlement took a decade, the only attorney who would take his case was kicked out of the hearing for incompetence and he had to represent himself. The state would not respond to applications for disability until after his hearing with insurance.
Judge found in his favor and he got a $30,000 settlement which attorney garnished until overturned but he was finally able to drive part time bus and get disability.


For me… Withholdings of my pay, I didn’t choose or have any input into them. They were avoidable while I worked a certain profession that no longer exists.

Fees, also not avoidable unless you are like my uncle and just do things illegally for decades.

Yes, taxation on the poor is higher by percentage. Just like if I buy a car it's more expensive than when Bill Gates buys a car.

Again...what's this got to do with the EV tax credit?

 

[JeffKeryk]

Just shows you only want to hear bs that makes your case look good.
Real taxation rates can be quite high on the poor.

Also That’s the thing, most of them aren’t choices.

My folks either paid the property tax or were homeless, they could not get approved for an apartment due to their income.

Wisconsin in -20F and homeless wasn’t an option.

My father broke his back, damaged his neck and tore his shoulder apart at work and randomly was paralyzed until he forced the insurance company to approve surgery which took years. He tried getting work but no one would hire a cripple.
The final decision and settlement took a decade, the only attorney who would take his case was kicked out of the hearing for incompetence and he had to represent himself. The state would not respond to applications for disability until after his hearing with insurance.
Judge found in his favor and he got a $30,000 settlement which attorney garnished until overturned but he was finally able to drive part time bus and get disability.


For me… Withholdings of my pay, I didn’t choose or have any input into them. They were avoidable while I worked a certain profession that no longer exists.

Fees, also not avoidable unless you are like my uncle and just do things illegally for decades.

Wow, I'm really sorry for what your father went through. I have a couple friends who are partially or fully disabled. Living with pain, not being able to do what you used to do takes a strong person.
Talk is easy. I do what I can to help. And plan to continue to do so. All the best to your Dad.

 

[demarpaint]

You guys keep moving the goal post. The EV subsidy is going to the end user and the manufacturer, the subsidy the oil company gets is going to the producer.
Send me $100 every month so I can lower my cost of fuel, that would a comparable subsidy.

Can I get in on that subsidy? lol

 

[alarmguy]

I wonder if Ford, GM and others could survice the EV market without help? Their margins are so low, they cannot compete on price.
Has anyone but Tesla made any money on their EV business?

Has Tesla made money on their ICE business?
They have none,

GM USA sales 2022 = 2,200,000
Ford USA sales = 1,864,000
Tesla = 490,000 estimated because Tesla hides its USA sales numbers

 

[JeffKeryk]

Has Tesla made money on their ICE business?
They have none,

GM USA sales 2022 = 2,200,000
Ford USA sales = 1,864,000
Tesla = 490,000 estimated because Tesla hides its USA sales numbers

Nice ranking. Ford, GM and Toyota sell more vehicles than Tesla by units.
Which company is more profitable? Isn't profit a key metric?

Do those companies, or BMW, MBZ, or anyone break out their EV numbers? Be interesting to know.

My point is not that one company is better than another, but there are various metrics to measure a company by.
You are well versed in Tesla stock, so you already know about a valuation ranking.

Even though Tesla is a pure play EV company, your ranking is appropriate because everybody ultimately plays in the vehicle market.
Looking at just the EV or ICE segment is myopic especially when you compare numbers like yours.
A company to company comparison makes more sense. Plus, the bottom line is what matters anyways.

 

[BMWTurboDzl]

For sourcing? I thought thats a WIP until March?

Why fund vehicles with already high margins and lower overall adoption rates? In addition this idea of performance, what does that mean for a corolla buyer?

Its like saying imagine if every Corolla had the GR Corolla powertrain package or some other HiPo powertrain, where 0-60 is now 1.7 vs 17.1 (hypothetical). Does that mean my battery will work longer, can I take it on long journeys with less time between tops ups or less time at every charge?

Dont get me wrong, BEV have raised the floor of performance, but I dont think that matters for a corolla buyer as much as it matters for saying a person moving from a luxury performance marque.

I'm not sure what you mean by sourcing. The credit is available for sedans under $55k and SUV's under $85k.

Subsidies are designed as an inducement for adoption which in the long run will reduce cost/unit via economies of scale.

What makes you think corolla buyers wouldn't appreciate better performance for their $$? Of course they would.

Yes it's possible. For example the range of the Tesla Model 3 Performance vs Long Range Model 3 (RWD/AWD) are essentially identical at 315 and 325 miles respectively. HP is incredibly cheap in the EV arena.

The segment for Corolla buyers are extremely price sensitive. The purpose behind subsidies is to get the cost of manufacturing an EV down to a level which would entice these buyers to jump either by buying new or used.

One final not don't think I'm a fan of subsidies. I'm just trying to explain the reasoning behind them. The US is full of subsidies (Ex, Tariffs, National Flood Insurance, Social Security, Home mortgage interest deduction).

 

[Ws6]

Now...you have two choices. You can believe that Tesla is super efficient and high quality and that's why they use wood trim from Home Depot for critical component bracing...or you can surmise their quality is **** and they charge way more than they should for their products, their massive margins coming from cut-rate QA/QC and fast and loose component supplier vetting/call-outs and sometimes out and out substitutions from the local hardware store. This was a big reason I didn't buy Tesla. It's obvious what they're doing, and I don't buy stuff like that.

 

[Torrid]

Now...you have two choices. You can believe that Tesla is super efficient and high quality and that's why they use wood trim from Home Depot for critical component bracing...or you can surmise their quality is **** and they charge way more than they should for their products, their massive margins coming from cut-rate QA/QC and fast and loose component supplier vetting/call-outs and sometimes out and out substitutions from the local hardware store. This was a big reason I didn't buy Tesla. It's obvious what they're doing, and I don't buy stuff like that.

Nice ranking. Ford, GM and Toyota sell more vehicles than Tesla by units.
Which company is more profitable? Isn't profit a key metric?

Do those companies, or BMW, MBZ, or anyone break out their EV numbers? Be interesting to know.

My point is not that one company is better than another, but there are various metrics to measure a company by.
You are well versed in Tesla stock, so you already know about a valuation ranking.

Even though Tesla is a pure play EV company, your ranking is appropriate because everybody ultimately plays in the vehicle market.
Looking at just the EV or ICE segment is myopic especially when you compare numbers like yours.
A company to company comparison makes more sense. Plus, the bottom line is what matters anyways.

Answer is above. Obviously Tesla saved money with their Home Depot supplier.

 

[UncleDave]

Now...you have two choices. You can believe that Tesla is super efficient and high quality and that's why they use wood trim from Home Depot for critical component bracing...or you can surmise their quality is **** and they charge way more than they should for their products, their massive margins coming from cut-rate QA/QC and fast and loose component supplier vetting/call-outs and sometimes out and out substitutions from the local hardware store. This was a big reason I didn't buy Tesla. It's obvious what they're doing, and I don't buy stuff like that.

So the highest quality car is the Nio because they put the most into it and charge you the least?

Curious, has there been a failure on the home depot solution that happened in 2020?
Was it a run of cars, a whole years worth? Whats the story? I really dont know.

Or was it just a non critical ugly chafe strap that was covered in plastic anyway?

There are a litany of reasons the tesla has the most margin, not the least of which is that it's simply easier to make, thousands of fewer welds, and handling, less wiring, unified vs distributed control.....a good chunk of the car is 2 massive pieces.

 

[alarmguy]

Now...you have two choices. You can believe that Tesla is super efficient and high quality and that's why they use wood trim from Home Depot for critical component bracing...or you can surmise their quality is **** and they charge way more than they should for their products, their massive margins coming from cut-rate QA/QC and fast and loose component supplier vetting/call-outs and sometimes out and out substitutions from the local hardware store. This was a big reason I didn't buy Tesla. It's obvious what they're doing, and I don't buy stuff like that.

And with all that claimed profit they didn’t pay any USA income tax in 2021, USA operations showed no profit so no corporate taxes were paid

 

[JeffKeryk]

Perhaps a lesson on cost accounting is in order.
Gross Margin = Price - Cost
GM% = (Price - Cost) / Price

Cost direct components: Material, Labor
Indirect: Overhead, Factory Utilization, Warranty, Delivery and Dealer, Indirect Labor

In the short term, Tsala margins will drop due to price reductions, but as the factories continue to ramp factory utilization will be spread over more units improving margins. Tesla started smoothing their build plan schedule last year to alleviate end of quarter rush. In manufacturing this goal is known as Linear Production Rate.

Tesla's vertical integration is a key advantage; this was critical in the semiconductor shortage as Tesla was able to repurpose available chips while other manufacturers suffered. Ford, for example, is adopting firmware programming. Smart move!

 

[ArrestMeRedZ]

And with all that claimed profit they didn’t pay any USA income tax in 2021, USA operations showed no profit so no corporate taxes were paid

The fact that they are building multiple mega factories along with the associated cost and subsequent depreciation may have had something to do with that.

 

[UncleDave]

And with all that claimed profit they didn’t pay any USA income tax in 2021, USA operations showed no profit so no corporate taxes were paid

Meh....pretty normal for companies expanding factories and infrastructure with their own vs borrowed money.

 

[thastinger]

Even Elon Musk doesnt want oil to go away.

He wouldn't be able to build the ""planet saving" EV without it. EVERY aspect of an EV is built with fossil fuel

 

[UncleDave]

He wouldn't be able to build the ""planet saving" EV without it. EVERY aspect of an EV is built with fossil fuel

Sort of - it's built with energy from the makeup of the state/area that powers it. In Cali it's a mix, in Texas its fossil.

There are a litany of other reasons fossil fuels shouldn't and aren't going anywhere despite all the arm waving and greenwashing.

 

[Ws6]

So the highest quality car is the Nio because they put the most into it and charge you the least?

Curious, has there been a failure on the home depot solution that happened in 2020?
Was it a run of cars, a whole years worth? Whats the story? I really dont know.

Or was it just a non critical ugly chafe strap that was covered in plastic anyway?

There are a litany of reasons the tesla has the most margin, not the least of which is that it's simply easier to make, thousands of fewer welds, and handling, less wiring, unified vs distributed control.....a good chunk of the car is 2 massive pieces.

This is also why they throw them away after minor wrecks, in part. Cheap to make. Not fix.

 

[UncleDave]

This is also why they throw them away after minor wrecks, in part. Cheap to make. Not fix.

Have any actual stats on this?

 

[oggb]

Now...you have two choices. You can believe that Tesla is super efficient and high quality and that's why they use wood trim from Home Depot for critical component bracing...or you can surmise their quality is **** and they charge way more than they should for their products, their massive margins coming from cut-rate QA/QC and fast and loose component supplier vetting/call-outs and sometimes out and out substitutions from the local hardware store. This was a big reason I didn't buy Tesla. It's obvious what they're doing, and I don't buy stuff like that.

See also: home appliances, homes in general, processed foods, fast food, healthcare, etc. etc.

Corporations charge what they can not what they should. It's just how capitalism works in the modern world. Some companies are just better at hiding that fact.