Tesla Leasing and the Inflation Reduction Act (IRA)

[SGS-84106]

As I read news concerning the Inflation Reduction Act (IRA), it appears from many sources that a sort of loop hole exists with leased electric vehicles. Along with the tax credits that have been widely discussed for the purchase of an electric car, the IRA also allows for the originator of a commercial electric vehicle lease to receive a $7500 tax credit which exists outside of the other income/MSRP/battery content restrictions on the purchase of an EV. Unfortunately, however, the originator of a lease is legally the manufacturer (or its finance company) and not the person who is actually leasing the car.

See these articles: The easiest way to get a $7,500 tax credit for an electric vehicle? Consider leasing. and Want to Lease an EV? There's a Tax Credit 'Loophole' for That and How to bypass nearly every restriction of the EV tax credit by leasing

Some companies are deciding to share that credit with its lease customers, some are passing it all on to the customer, so aren't doing anything. From what I have been able to learn from Tesla, they are doing nothing about it.

Does anyone know anything about this practice and/or whether Tesla is planning to take advantage of that loophole to save its lease customers some money? Could it be that Tesla, with all of its capital expenses in building factories and superchargers doesn't pay any taxes and therefore can't use a tax credit?

Please chime in if you have any info.

Thanks.

 

[ewoodrick]

I believe that leases take that into consideration. They don't give it to the customer, they decreases the lease basis.

 

[SGS-84106]

I would love for that to be the case, but they just sent me a print out of cash/loan and lease and there isn't any suggestion that the lease price is in any way reduced.

Does anyone else know whether that is true?

 

[CapeOne]

Does anyone know anything about this practice and/or whether Tesla is planning to take advantage of that loophole to save its lease customers some money? Could it be that Tesla, with all of its capital expenses in building factories and superchargers doesn't pay any taxes and therefore can't use a tax credit?

In the past, Tesla would add the tax credit to the residual (lease end) value e.g., if a car had a residual value of $60,000 and the tax credit was $7,500, Tesla would take the $7,500 and make the residual $67,500. I never liked the way Tesla did this as it made the car $7,500 (in this example) more expensive for the customer/lessee to buy at lease end if/when it was an option.

 

[85vett]

Another problem with Tesla leasing is no buy out option at the end of the term. I normally don't lease cars but have become more interested in it for EV's. But if I have a good car and it's still meeting my needs I would want to buy it out vs forced to return it.