200k limit per manufacturer for $7500 rebate...make a new company?

[YauKwan]

What prevents Tesla from branching out to a second company to extend the credit another 200k cars?

Kind of like how each midrange car dealer has a luxury brand name. Toyota = Lexus, Nissan = Infinity, etc.

 

[Derek Kessler]

Because Lexus is a different brand, but it's still manufactured by and counts towards the revenue of Toyota.

Case in point is GM: It's closing in on the 200,000 car limit (though behind Tesla), even though there's no "GM" brand of car you can buy, just Chevy and Cadillac PHEVs.

It'd have to be an entirely separate company, and any attempt to pull some sort of corporate "selling yourself to your subsidiary" shenanigans of something equally convoluted would get sued into oblivion.

 

[HankLloydRight]

They wouldn't get "sued into oblivion".. it's the IRS that cares about the tax credit, and any shenanigans would simply be tax fraud. You're not going to fool the IRS simply be creating a "different company" that just happens to sell identical "Tesla" cars solely to circumvent the 200k unit limit and start at 0 again.

Not to mention the tsunami of bad PR from the American taxpayers (who foot the bill) for pulling something a stunt like that.

 

[jelloslug]

What prevents Tesla from branching out to a second company to extend the credit another 200k cars?

Kind of like how each midrange car dealer has a luxury brand name. Toyota = Lexus, Nissan = Infinity, etc.

It does not work that way.

 

[HankLloydRight]

The only way I see something like this even remotely close to happening is if Tesla declares full Chapter 7 bankruptcy, sold off all the factory assets to pay back creditors, and the buyer (a different/new company) of those assets started up the factory again under a new name/company.

But (a) that's just not going to happen (b) if that did happen, Tesla would likely be able to get a bail-out from the government to keep the doors open and lines running (c) if that did ever happen in the future, the chance of the tax credit still even being a thing is unlikely, (d) if Tesla had to declare Chapter 7 bankruptcy, there's something inherently wrong with the business model, and (e) see (a).

 

[Kuhz]

The $7500 credit is not why most people buy a Tesla. It’s an incentive, yes, but not a deal breaker. To the people who are waiting for 35k Model 3 and count on the credit more, they most likely won’t get it anyway (at least not the full credit). However there are not many cancellations due to this.

 

[Uncle Paul]

Knowing Elon, he would call it the not a Tesla Company.

(reference to Flame Thrower)

 

[whitex]

It really depends on exactly how the tax credit law is written. The different branding, such as "Porsche" vs. "VW" does help the companies in question get around some regulations, such as import limits, average emissions, etc. Those regulations see Porsche and VW as separate companies. I'm sure there is a way Tesla could setup a separate brand, say "Affordable Not Tesla" that Tesla could license their designs to (Model 3 sells as "ANT 3"). The problem is that such separation requires more work and money (separate factories, corporate structure, etc).