2021 EV Tax Credit

[DLK1974VA]

What is the current assessment of the likelihood of Tesla vehicles again qualifying for the the $7,500 US federal government tax credit or possibly $10,000 if including made in America provision? What purchase/pickup date would one have to have to qualify for the credit? I've seen various thoughts on whether that would be retroactive to late May, the date the legislation passes, or not until January 1, 2022. Assuming it could go into effect in July/August (passing this summer) why would anyone be purchasing a car now unless literally have nothing else to drive, his or her tax liability won't require the credit, certain it will take months to get the car with the increased demand the credit will drive, and/or Tesla will generally raise the price to offset much/all of the credit? I am currently in the 8 - 12 week window (placed M3 order at end of May) and want the car now but can't imagine my frustration if I had waited a couple of weeks/month and would have had a massive tax benefit.

 

[t.e.s.l.a_dude]

I just think if they have X number of cars set for delivery through the end of the year then they are definitely going to take a beating on deliveries if everybody starts seeing on the news that if you wait until 1/1 you will save $10k. I think that’s the key. The time between when a deal is announced and when it is effective. If it’s effective from the moment it’s announced or slightly backdated then there won’t be any issues. If it gets announced soon and isn’t effective until 1/1 then everybody will suffer. Hopefully the government is having these discussions with the manufacturers and timing it right, but given that it’s just based on whenever a vote passes it seems like the only way to ensure it doesn’t cause problems is to make it effective immediately upon passage.

Or, fingers crossed, they adopt the Senate version of effective date which would be May 24, 2021, the date the bill was introduced.

 

[iPlug]

Remember, demand for Teslas is very high worldwide. If this bill gets passed before the end of the year, looking like what is proposed now, U.S. demand will dip to some degree until 1/1/2022.

But this is not as big of a problem as it might sound. If there are still several weeks to go, Canada and further exports for fulfillment are options. If it’s just a matter of days or a couple weeks before the new year, it would be fine to temporarily build up inventory.

 

[mephiska]

Is anyone here an accountant that could help with this question?

I am expected to pick up my MY in mid-December. Would it be possible to accept my payment in December, accrue it on their books, and forward date the invoice date to January 1st? I am not sure if this is entirely legal or US GAAP compliant, but if we could find a way to deliver vehicles, keep the payment on their books, and still allow me to obtain the 2022 EV tax incentive, it could be a win-win. Even if they added some finance charges (like a rent-to-own scenario), I would still take it in a heartbeat. They would be able to show a significant increase on their balance sheet that will be recognized in Q1 that should satisfy Wall Street concerns.

But as I mentioned, I am not sure if this practice would be permitted by Uncle Sam nor whether Tesla would want to take on the additional administrative burden albeit temporarily.

Someone else pointed out to me in another thread, according to the terms of the order agreement, you have 30 days from the delivery date to accept delivery of your vehicle. So if you have an EDD of mid-December, so long as it doesn't get pushed up, then you could just accept whatever delivery date they assign you and then wait till after 12/31 to go pick up the car. Then your acquisition date would be for 2022 and you would be good with the current draft legislation.

Be aware if you don't pick up the car within that 30 day window then Tesla has the right to cancel your order and keep your $250 deposit.

 

[MY-Y]

With the $55k for sedans limit it looks like the M3LR will be $40k (credit) and the Performance will be $58k (no credit). I wonder if there will be any price adjustments by Tesla to the Performance to make it qualify. Would be nice to get one for $45k. Or will people be willing to pay an $18k premium for the performance?

Maybe sell the performance at the cap with a, say 4.1 second 0-60, and have a post-sale acceleration boost like the LR.

 

[MP3Mike]

So if you have an EDD of mid-December, so long as it doesn't get pushed up, then you could just accept whatever delivery date they assign you and then wait till after 12/31 to go pick up the car.

You actually only have 3 days to pickup the car they assigned you before they can give it to someone else. It is just that they will assign you another VIN for up to 30-days after that. 30 days after they initial offered you a car, they can cancel the order. (Not that they always will, but they can.)

 

[mephiska]

You actually only have 3 days to pickup the car they assigned you before they can give it to someone else. It is just that they will assign you another VIN for up to 30-days after that. 30 days after they initial offered you a car, they can cancel the order. (Not that they always will, but they can.)

Interesting, thanks for the clarification. Can that change at all if you call and ask for a hold? I mean I imagine it's a hassle for them to move cars around by assigning VINs to other buyers at other locations. Keeping the options simple probably makes it easier, but still. I'm still not clear on what a "hold" means if you request it.

I ordered 9/27 and delayed completing the order until about a week ago, but my EDD is still "Nov 16 - Dec 16", so if possible I'd like to push my EDD out to 2022.

 

[MP3Mike]

Interesting, thanks for the clarification. Can that change at all if you call and ask for a hold? I mean I imagine it's a hassle for them to move cars around by assigning VINs to other buyers at other locations. Keeping the options simple probably makes it easier, but still. I'm still not clear on what a "hold" means if you request it.

If you request that they put your order on hold, and they do, before they match you to a VIN the 3-day and 30-day periods haven't started.

 

[Wahnyc]

I emailed tesla today and asked to be on hold until 1/1/22 and got a reply confirming my request about 2 hours later. My account shows my order is on hold.

 

[mephiska]

If you request that they put your order on hold, and they do, before they match you to a VIN the 3-day and 30-day periods haven't started.

So this is a bit confusing then, how does that second 30 day hold work? If say worst case on Day 3 of no delivery they say time's up and assign the car to someone else, they "assign another VIN to me" for 30 days? They build another car to my order? Or do they have 27 days to assign another VIN in the production run to me? And after they assign that 2nd VIN to me do I then have another 3 days to accept or do I now suddenly have the remainder of that 30 day window?

 

[MP3Mike]

So this is a bit confusing then, how does that second 30 day hold work? If say worst case on Day 3 of no delivery they say time's up and assign the car to someone else, they "assign another VIN to me" for 30 days? They build another car to my order? Or do they have 27 days to assign another VIN in the production run to me? And after they assign that 2nd VIN to me do I then have another 3 days to accept or do I now suddenly have the remainder of that 30 day window?

You get 3-days to pickup a car each time they assign you a VIN/delivery date. The 30-day window, that starts after they first offer you a VIN/delivery date, is just when they get to cancel your order and keep the order fee. (I have not heard of them actually doing that yet.)

 

[mephiska]

You get 3-days to pickup a car each time they assign you a VIN/delivery date. The 30-day window, that starts after they first offer you a VIN/delivery date, is just when they get to cancel your order and keep the order fee. (I have not heard of them actually doing that yet.)

So basically you've got to game it and work your SA to try and get them to massage things to make your delivery date push out to 2022 if you want to get that EV credit as the draft is currently written.

Congress really needs to backdate this thing because this is really disruptive given all the discussion we're having. And if they pass this as it's written you're going to have news media telling people "Don't buy a Tesla or GM in 2021, wait till 2022 to get your $8k tax credit", and that's no good.

 

[PNWLeccy]

Gave up my MF302XXX VIN today and delayed to 1/1/22. My SA said that Tesla may decide to "auto cancel" my order since I've delayed more than once. I hope this doesn't mean Tesla will be taking a hardline against all those who are delaying in hopes of a tax credit but it sounds like there is some risk.

 

[Spuzzz]

I doubt it. It’s in their interest to leverage the credit to sell more cars. If they just raise the price to essentially keep the car the same price to the consumer then the credit won’t really help anybody.

They are struggling to keep up with demand so far. So they already seem to have the leverage they need. And they sort of did that already (in reverse) …when they began phasing out teslas credit in 2019, tesla lowered its model 3 prices with each step, by approximately the same amount of the tax credit. So the price remained the same ultimately to the consumer. So was tesla taking the tax credit for themselves? Or were they achieving an economy of scale that just allowed them to drop their price and remain profitable?

 

[bro1999]

You get 3-days to pickup a car each time they assign you a VIN/delivery date. The 30-day window, that starts after they first offer you a VIN/delivery date, is just when they get to cancel your order and keep the order fee. (I have not heard of them actually doing that yet.)

It's 3 days after they assign you a delivery date/time. You can get assigned a VIN and still be several weeks away from actually delivery still.

 

[bro1999]

So basically you've got to game it and work your SA to try and get them to massage things to make your delivery date push out to 2022 if you want to get that EV credit as the draft is currently written.

Congress really needs to backdate this thing because this is really disruptive given all the discussion we're having. And if they pass this as it's written you're going to have news media telling people "Don't buy a Tesla or GM in 2021, wait till 2022 to get your $8k tax credit", and that's no good.

Maybe we need to start contacting our Congress people to let them know.

 

[t.e.s.l.a_dude]

FWIW, many M3SR+ popping up now in my region in existing inventory. Given that the current wait for SR+ is until June (19") and September (18"), looks like customers started delaying taking delivery.

 

[Spuzzz]

FWIW, many M3SR+ popping up now in my region in existing inventory. Given that the current wait for SR+ is until June (19") and September (18"), looks like customers started delaying taking delivery.

Of course. Unless you place no value on money, this leaves you no choice. There’s gonna be a pile up of delayers here.

 

[voxel]

FWIW, many M3SR+ popping up now in my region in existing inventory. Given that the current wait for SR+ is until June (19") and September (18"), looks like customers started delaying taking delivery.

I bought one from the inventory but put my SR+ on hold because I found a demo MYLR a week later. After they released my VIN, I briefly saw it reappear on the inventory page and poof…. It was sold a few hours later.

There’s still a large demand for SR+ even with tax credit looming. If the tax credit passes, everybody will be unholding on 1/1/2022 (or earlier) and there will be unlucky folks waiting months that had Dec delivery dates.

 

[jhrorsman1]

I emailed tesla today and asked to be on hold until 1/1/22 and got a reply confirming my request about 2 hours later. My account shows my order is on hold.

Same here, shows hold 1/1/2022

 

[t.e.s.l.a_dude]

I emailed tesla today and asked to be on hold until 1/1/22 and got a reply confirming my request about 2 hours later. My account shows my order is on hold.

Did you already have a VIN assigned and put the hold afterwards or did you put the hold even before your VIN was assigned?