Could Tesla do this?

[flamingoezz]

In order to maximize rebates, could Tesla at the 5 month mark after hitting their 200,000th car, give all remaining M3 owners an option to finance the car (through them or otherwise) prior to taking delivery?

We would configure the car and technically 'buy' it prior to the 6 month period so that we would apply for the highest possible rebate and receive delivery as it becomes available. I don't know if there is anything in the federal legislation or rules of financing institutions that would make it impossible to purchase the car that far in advance, but I would gladly start my payments 6 months early if it netted me and extra $3750 in rebates. Hell, I'd probably pay cash and just have them deliver when it is built if it meant I'd get the full $7500.

Any thoughts?

 

[brianman]

By my count, about the 7th time this has been proposed on TMC...

 

[wrf2e]

I don't think the law would allow this. The IRS webpage uses the term "acquire", and the Merriam-Webster definition says "to come into possession or control of often by unspecified means". I think you would have to take delivery, not just pay for the car. There are, however a few other things they could do to maximize the number of buyers that get the credit.

They could, and I think they will, slow deliveries so that the 200.000th car falls at the right time in the quarter to maximize the time they have to deliver once the clock starts ticking.

They could also stop delivery at 199,999 and then stockpile cars that come off the assembly line, and then have a mass roll-out when they get a bunch built and ready to go. If they do this, they would probably ask for a larger deposit or even payment in full because they would then be building cars with no money coming in to pay for things. I do not know if a bank will let you finance a car that will sit in CA for an extended length of time.

 

[Az_Rael]

The IRS uses the "In Service" date for the credit. So the vehicle has to be delivered to you. Those are the dates the IRS will use to determine eligibility for the credit during the phase out period.

 

[Lunarx]

Does it have to be delivered, or just registered?
Can't it be purchased & registered as soon as a VIN is assigned?
So an owner buys it, registers it and leaves it at the factory for upgrades.

 

[Dan Detweiler]

I was told at my Tesla showroom that the number is based on cars taken delivery.

Dan

 

[flamingoezz]

oh well, there goes that idea.

i don't see tesla stopping deliveries on all cars for weeks. they have other models that'll be available for without wait. I can't see them screwing over those customers to slide a few thousand rebates in.

Maybe they could delay the arrival of the M3 until they hit 199,999 and deliver all M3's at the same time. im sure that'll make a bunch of people uneasy, but when you wait 2 years, what is a few more weeks.

 

[garsh]

At a minimum, when they get close to 200k cars, they could deliver cars only internationally for the rest of that quarter. That would push the rebate expiration clock back one quarter without requiring them to sit on any cars.

 

[zuwarrior14]

As suggested on other threads, what Tesla will do is to deliver most of the cars to non-US for the quarter when they are about to reach 199,999. Once the new quarter begins, then they will deliver the 200Kth car in the US. This way they would have more than two quarters to make car qualify for 100% of Fed Tax.

 

[flamingoezz]

Hmm..if i order an S or X just before 200K and have to wait an additional 2 months to get my car, I'm not going to be happy. I hope Elon does that for my sake, but I wouldn't count on it.

 

[inspron]

In order to maximize rebates, could Tesla at the 5 month mark after hitting their 200,000th car, give all remaining M3 owners an option to finance the car (through them or otherwise) prior to taking delivery?

We would configure the car and technically 'buy' it prior to the 6 month period so that we would apply for the highest possible rebate and receive delivery as it becomes available. I don't know if there is anything in the federal legislation or rules of financing institutions that would make it impossible to purchase the car that far in advance, but I would gladly start my payments 6 months early if it netted me and extra $3750 in rebates. Hell, I'd probably pay cash and just have them deliver when it is built if it meant I'd get the full $7500.

Any thoughts?

Very basic tax rule = the car is "bought" the moment Title transfers (responsibility and risk). Nothing anyone can do the change that fundamental definition of international commerce.

 

[lklundin]

As suggested on other threads, what Tesla will do is to deliver most of the cars to non-US for the quarter when they are about to reach 199,999. Once the new quarter begins, then they will deliver the 200Kth car in the US. This way they would have more than two quarters to make car qualify for 100% of Fed Tax.

Here is how Tesla could take that strategy to its extreme:

They have about 120k(*) cars to sell in the US before they reach 200k.

They expect to reach an annual production of 500k in 2020.

So between now and 2020, they ration their US sales, selling only about 25k cars per year in the US.

Then, on the first day of the first quarter where they can annually produce 500k cars, they switch their entire production to the US market, thus selling an additional 250k in 6 months with the full tax rebate and an additional 250k cars with the 50% in the following 6 months. The discount would thus reach G$ amounts.

I guess a cap of 25k cars per year is too low for the US market, but they could try something along those lines, say ramping up over only three years, while annually selling 40k cars in the US, and then sell exclusively to the US market for a whole year.

(*) I think maybe this number is off, please correct me.