4 ms·

So you own it technically, but they're obligated to buy it back after 36 months. Since you own it technically, you get the federal/state tax benefits. Seems li

by archon 14y ago

So you own it technically, but they're obligated to buy it back after 36 months. Since you own it technically, you get the federal/state tax benefits. Seems like this whole scheme will unravel as soon as those tax credits die out, which they will.

ConstantineXVI 14y ago
No doubt. But they're likely to get plenty of Teslas on the road in the meantime, which is all they need: awareness that Tesla exists, and (theoretically) satisfied customers. Presumably Musk is anticipating that most buyers will like the Model S enough to not sell it back; if reality lines up, Tesla comes out far ahead. If not, they're doomed, but this scheme would really only be accelerating their demise in that case.
metageek 14y ago
Or as soon as the states close the loophole so that this program is treated the same as a lease.
- Evbn 14y ago
  More likely they should change the loophole so that lease is treated like a sale (with some reasonable pro rating), since it basically is.
  - ghaff 14y ago
    A lease is indeed effectively a financing option; that's pretty basic Finance 101. That said, one of the things one also learns in Finance 101 is that there are tax differences between how leases are handled and how capital expenditures are handled and that any calculation has to be made on an after-tax basis. (Which is a long-winded way of saying that how something like this should be treated from a tax/accounting perspective isn't at all obvious (to this non-accountant). Although I'm sure Tesla has vetted this pretty carefully.
zefhous 14y ago
I'm not saying the tax credits won't die out, but it's unfortunate that they will. I've seen some people saying that these subsidies are unfair, but the US government heavily subsidizes gas too. Some very rough calculations put the average gas subsidies paid by the US government around $4350 per driver per year. I dislike subsidies in general, but it's too bad the credit will phase out sooner rather than later. Getting plug-in electrics on the road will save the US tons of money on gas subsidies. -------------- 1.49 gallons/driver/day * 365 days * $8/gallon subsidy = $4350.8/driver/year Gallons/day: http://en.wikipedia.org/wiki/Gasoline_and_diesel_usage_and_pricing#Fuel_prices_in_the_United_States http://en.wikipedia.org/wiki/Gasoline_and_diesel_usage_and_p... Using an $8 subsidy based on some quick googling, which places the true cost of gas in the US from $12-$15/gallon. Assuming an average price of $4/gallon, that puts a conservative estimate of the subsidy per gallon around $8. Federal credit phase out info: http://www.irs.gov/Businesses/Plug-In-Electric-Vehicle-Credit-(IRC-30-and-IRC-30D) http://www.irs.gov/Businesses/Plug-In-Electric-Vehicle-Credi...
- gibybo 14y ago
  Mind sharing the links you found relating to the $8 subsidy?
  - zefhous 14y ago
    This site claims the true cost of gas is $15.40: http://www.progress.org/gasoline.htm http://www.progress.org/gasoline.htm This article at $12.75 from May 2011: http://www.triplepundit.com/2011/05/increasing-gas-prices-subsidies/ http://www.triplepundit.com/2011/05/increasing-gas-prices-su... Subtracting the $4 price of gas is what brought me to $8, conservatively. To be fair, some of the price paid at the pump is tax, but according to the previously linked wikipedia article that's 12%, so $0.48 for a $4 gallon.
- gensym 14y ago
  When they heavily subsidize bicycles or living close to your workplace, I'll less of a problem with subsidizing more of the vehicles that pollute my environment and threaten my life.
- 14y ago

by archon 14y ago

ConstantineXVI 14y ago

No doubt. But they're likely to get plenty of Teslas on the road in the meantime, which is all they need: awareness that Tesla exists, and (theoretically) satisfied customers. Presumably Musk is anticipating that most buyers will like the Model S enough to not sell it back; if reality lines up, Tesla comes out far ahead. If not, they're doomed, but this scheme would really only be accelerating their demise in that case.

metageek 14y ago

Or as soon as the states close the loophole so that this program is treated the same as a lease.

Evbn 14y ago
More likely they should change the loophole so that lease is treated like a sale (with some reasonable pro rating), since it basically is.
- ghaff 14y ago
  A lease is indeed effectively a financing option; that's pretty basic Finance 101. That said, one of the things one also learns in Finance 101 is that there are tax differences between how leases are handled and how capital expenditures are handled and that any calculation has to be made on an after-tax basis. (Which is a long-winded way of saying that how something like this should be treated from a tax/accounting perspective isn't at all obvious (to this non-accountant). Although I'm sure Tesla has vetted this pretty carefully.

zefhous 14y ago

I'm not saying the tax credits won't die out, but it's unfortunate that they will. I've seen some people saying that these subsidies are unfair, but the US government heavily subsidizes gas too. Some very rough calculations put the average gas subsidies paid by the US government around $4350 per driver per year. I dislike subsidies in general, but it's too bad the credit will phase out sooner rather than later. Getting plug-in electrics on the road will save the US tons of money on gas subsidies. -------------- 1.49 gallons/driver/day * 365 days * $8/gallon subsidy = $4350.8/driver/year Gallons/day: http://en.wikipedia.org/wiki/Gasoline_and_diesel_usage_and_pricing#Fuel_prices_in_the_United_States http://en.wikipedia.org/wiki/Gasoline_and_diesel_usage_and_p... Using an $8 subsidy based on some quick googling, which places the true cost of gas in the US from $12-$15/gallon. Assuming an average price of $4/gallon, that puts a conservative estimate of the subsidy per gallon around $8. Federal credit phase out info: http://www.irs.gov/Businesses/Plug-In-Electric-Vehicle-Credit-(IRC-30-and-IRC-30D) http://www.irs.gov/Businesses/Plug-In-Electric-Vehicle-Credi...

gibybo 14y ago
Mind sharing the links you found relating to the $8 subsidy?
- zefhous 14y ago
  This site claims the true cost of gas is $15.40: http://www.progress.org/gasoline.htm http://www.progress.org/gasoline.htm This article at $12.75 from May 2011: http://www.triplepundit.com/2011/05/increasing-gas-prices-subsidies/ http://www.triplepundit.com/2011/05/increasing-gas-prices-su... Subtracting the $4 price of gas is what brought me to $8, conservatively. To be fair, some of the price paid at the pump is tax, but according to the previously linked wikipedia article that's 12%, so $0.48 for a $4 gallon.
gensym 14y ago
When they heavily subsidize bicycles or living close to your workplace, I'll less of a problem with subsidizing more of the vehicles that pollute my environment and threaten my life.
14y ago