Thread by @k_salberta

#TSLA
Per 10-Q Tesla did incorporate IRA battery credits into COGS. As expected. Gross automotive margin would have been worse otherwise.

Tesla has been paying below 10% in taxes since it became profitable. I would expect Tesla to be subject to the special alternative minimum corporate tax contained in the IRA bill. They just say they are watching it. Next year Tesla's special low tax rate in China should increase.

Long-lived assets in Germany are up to 3.85 billion vs China's 3 billion. For a factory that is making maybe 1/3rd the number of cars. There is no possibility that Berlin will even approach Shanghai's margins. Labor costs are notably higher, as are inputs.

Despite volume increases, domestic Chinese revenues are down from 25% of total in '22 to <21% of total in '23. The price cuts told. The lower costs of the Shanghai facility combined w/ lower revenues implies that Tesla should increase exports.

This is why we see the MIC LFP cars for sale in Canada, which places demand pressures on the US. So the new price drops in the US on the Y are aimed at generating orders to replace the Canadian sales, more than poor demand in the US. US margins will drop as result.

On pg 27, Tesla discloses: "Further, the average combined cost per unit of our vehicles increased year over year due to increasing prices of raw materials, manufacturing, logistics and warranty costs." ! That's w/ the US mfrg credits, the end of the last month push, etc.

Notably, the proportion of S/X in the mix dropped YoY, which should have cut COGS, and the mfrg credits did cut COGS, and the more even deliveries should have cut COGS (and they said it did). So we are probably seeing the effect of higher margin from the two new factories.

That's a YoY COGS increase of 36.7K to 38.4K.
How much margin is Tesla getting on the US SR 3? It can't be much. You reserve some of the sales revenue for warranty. Don't expect much more in the way of US cuts - maybe even an increase. I bet they are taking a loss on the 4680 Y.