Recording of My Twitter Space on Tesla for 2023

Here is a link to my Twitter space on Tesla for 2023. The main presentation and discussion starts 10 minutes after the Twitter space starts. Yes, Tesla and markets are way down but Tesla is setting up for a very strong 2023. There are large boosts to Tesla profits from full self driving sofware, inflation…
Recording of My Twitter Space on Tesla for 2023

Here is a link to my Twitter space on Tesla for 2023. The main presentation and discussion starts 10 minutes after the Twitter space starts.

Yes, Tesla and markets are way down but Tesla is setting up for a very strong 2023. There are large boosts to Tesla profits from full self driving sofware, inflation reduction act tax benefits, scaling energy production to large profits and vastly improved car production from the new factories.

There have been concerns about China demand.

China insured units were 16,121 last week (vs 14K exp), the highest weekly rate in 4Q. China Nov sales 55.6K, a new record 2nd month of a qtr by far (was 34.5K).

Before this weeks Tesla China insurance registration number, there was expectations that Tesla would only deliver 48000 vehicles in November. This was the old table for Troy Teslike who tracks closely. The strong China registration means 7,600 more deliveries this past week. If the weeks in December are stronger by 7000 deliveries per week then 148,000 vehicles could be delivered in China in Q4 2022. 270,000-295000 cars could be delivered in China. Fremont should have 150,000-155000 vehicles in Q4.


Tesla Berlin just announced they are running at 3300 cars per week and should start the third production shift to get up near 5000 cars per week for the last two weeks of December. 18000 cars for the first two months and 15000 cars in December for Berlin would be about 33000 cars. There should be about 25000 deliveries from Tesla Austin.

Tesla should deliver 450,000 to 485,000 cars in Q4. This would be about 100,000 to 130,000 cars more than in Q3.

It is also means the deliveries for Q1 2023 for Berlin and Austin should be about 70,000-80,000 cars each. This means about 600,000 cars in Q1 2023 is possible.

Tesla has widely released the Full Self Driving version 11 software to everyone who order FSD in North America. This means up to 350,000 people can get the software they could have been waiting years to get.

All future orders of FSD will not have to wait to get it. The percentage of tesla buyers who buy FSD could increase from 15% in the US to 20-25%. If 225,000 cars are delivered in the US in Q1 2023, then an increase of 5-10% more take rate is 22,5000 to 45,000 people buying FSD at $15,000 each. This would be $338M-$678M.

About 1.5 million Tesla buyers did not buy FSD when they initially bought their cars. If 2% of those people choose to now upgrade, then this would mean 30,000 new buyers of FSD @$15k. This is $450 million. If 10% choose the $199/month monthly subscription this would be $600 million per quarte. This increased FSD software activity wouuld be $1.5-2 billion of new net income in Q1.

Q1 2023 will also see the inflation reduction act (IRA).

The IRA substantially revised and extended the tax credit for purchases of new EVs placed in service after December 31, 2022.

The tax credit under Section 30D has been extended for qualifying vehicles placed in service through December 31, 2032.

Credit Amount. Under prior law, the tax credit was up to $7,500, with $5,000 of that amount calculated based on the battery capacity of the vehicle. The IRA does not change the $7,500 amount, but it changes the way to get to that amount: vehicles meeting a critical mineral requirement are eligible for a $3,750 tax credit, and vehicles meeting a battery components requirement are eligible for a $3,750 tax credit, with vehicles meeting both requirements being eligible for the $7,500 amount.

Vehicle Cap Removed. Under prior law, there was a manufacturer-specific phaseout once a manufacturer had sold at least 200,000 EVs in the US after 2009. The IRA eliminates the vehicle cap for vehicles sold after December 31, 2022. Vehicles manufactured by Tesla and General Motors and purchased in 2022 are not eligible for the Section 30D tax credit because these manufacturers exceeded the 200,000 vehicle threshold.

Price limits: Those caps are:

$80,000 for SUVs, vans and pickup trucks


$55,000 for other vehicles


Income Limits. Beginning in 2023, the new electric vehicle credit is not available to an individual with a modified adjusted gross income in excess of a specified limit based on the individual’s tax filing status. Those limits are:

$300,000 for married filing joint and surviving spouse


$225,000 for heads of household


$150,000 for others, including single filers

Section 45W Credit for Commercial Electric Vehicles

The IRA also includes a significant tax credit for commercial EVs, especially heavy-duty trucks weighing more than 14,000 lbs. The tax credit includes the lesser of 30% of the difference between the clean energy vehicle and a comparable internal combustion engine (ICE) and $40,000.

Charging Stations

The IRA revives the recently expired alternative fuel tax credit of 30% for EV charging and alternative fuels and increases the maximum use of the credit from $30,000 to $100,000. The provision is a boon for EV infrastructure companies such as EVGO, ChargePoint, and Plug Power.

Battery Makers

On the battery manufacturing side, the IRA provides significant tax breaks to encourage the localization of the battery supply chain. The provisions include a 10% cost credit, which translates into an almost 7% discount on battery cells, $10/kWh for battery modules, constituting a 30% discount on battery packs, and a $35/kWh production credit for battery cells, which accounts for an average of 35% discount to global battery cell prices.

Standalone storage systems will be eligible for a 30 percent investment tax credit (ITC) — and up to 70 percent with additional incentives.

Before IRA


-26% in 2022, 22% in 2023, 10% in 2024.


-Only available for battery systems getting at least 75% charge from onsite solar power.

With IRA


30% in 2023-2033, 22.5% in 2034, 15% in 2035, 0% in 2036.


-Available for business-owned battery systems with a capacity of 5 kWh or higher, regardless of energy source.

Tesla should get about $400-600 million of tax credit directly in Q1 2023 and this will scale to $1.5 billon in Q4 and 2023. Most buyers of Tesla cars will get a $7500 reduction on their taxes and buyers of Megapacks and Powerwall will get larger credits. The tax benefits to buyers will increase Tesla demand. Tesla could also transition into installing more fixed storage and charging stations where Tesla would capture tax benefits directly.

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