$7500 Federal Tax Credit coming by years end? - says Tesla Rep

[mongo]

Just remember... if you keep it in your S-corp, it's section 179. That means you can write most of it of this year (I think 80%?). That comes right off your income as an expense. It may behoove you to take that deduction because if you are in the 39% tax bracket, thats what you save additionally because you don't have other pay income tax on that amount. After a few years and depreciation eats that vehicle alive, then transfer it to your personal so you don't take any income on the delta. (This is what my accountant explained to me).

Getting into the weeds here, but it may be more complicated than that
https://bradfordtaxinstitute.com/Content/onvert-Business-Property.aspx

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[VAF84]

Just remember... if you keep it in your S-corp, it's section 179. That means you can write most of it of this year (I think 80%?). That comes right off your income as an expense. It may behoove you to take that deduction because if you are in the 39% tax bracket, thats what you save additionally because you don't have other pay income tax on that amount. After a few years and depreciation eats that vehicle alive, then transfer it to your personal so you don't take any income on the delta. (This is what my accountant explained to me).

This info is gold. I owe you lunch if I ever end up back in Durango Thanks again for sharing this!

 

[M0unt41nm4n]

Getting into the weeds here, but it may be more complicated than that
https://bradfordtaxinstitute.com/Content/onvert-Business-Property.aspx

Yep... it is My accountant was very clear that conversion of property results in a tax event. The key is how big. If you a plan to keep it in your company for a long time and get its value down to parts, then it becomes a cheap proposition. The point he made is if you 179 it now, the income tax would have been about a value of $31K after tax if I bought it without it. i.e. it would have cost me that much more in pretax dollars. If I wait until the CT is worth 20K for a transfer (6-8 years maybe?), assuming tax rates are the same, then it's a $6K income tax hit. He said, let depreciation do its thing. The point is, the depreciation eats you taxes in line with the vehicle's depreciation.

 

[VAF84]

Getting into the weeds here, but it may be more complicated than that
https://bradfordtaxinstitute.com/Content/onvert-Business-Property.aspx

I imagine this is the part my accountant wanted to research before fully answering my questions.

 

[WormtownKris]

It's beyond paperwork. As long as Tesla is using 4680 cells with imported Chinese cathodes, the Cybertruck will not qualify for any Clean Vehicle Credit.
Getting their internal dry battery electrode (DBE) process running, into production vehicles, and sold in 2024 would allow the credit. As would Panasonic sourced 4680s.
In 2025, Chinese sourced minerals will result in disqualification. I'm not sure on their supply chain.

Not being antagonistic, but I see you post this again and again. You seem very certain of your position on Chinese cathodes. The only source I have ever seen referenced or have been able to find myself was one article from DriveTesla CA, from January of this year. The relevant parts are here:
" According to sources contacted by LatePost in China, Tesla began sourcing and importing cathode coils from China in 2023 before assembling them as parts of its 4680 batteries in Texas, in the US. It selected two suppliers from a potential pool of Chinese battery companies based on their production lines.
" The report claims Tesla could continue buying from the suppliers well into 2024 before Panasonic starts mass-producing the 4680 cells in the third quarter. Importing cathode coils will make it easier for Tesla to ramp up its own 4680 production quickly."

So, we have a Canadian article quoting a Chinese article saying that in late 2023 Tesla brought in cathode coils from China, and they *might* continue using this source until Q3 2024.
Is there another source for this, or are you basing your opinion solely on this one January online article? We've seen lots of deliveries of equipment and supplies to the Cathode building in Austin via Joe T and Brad S's drone videos. Are you certain the in-house cathode production in October 2024 is still using materials from China? I am NOT arguing with you, merely asking where your insight into this comes from. Cheers.

 

[mongo]

Not being antagonistic, but I see you post this again and again. You seem very certain of your position on Chinese cathodes. The only source I have ever seen referenced or have been able to find myself was one article from DriveTesla CA, from January of this year. The relevant parts are here:
" According to sources contacted by LatePost in China, Tesla began sourcing and importing cathode coils from China in 2023 before assembling them as parts of its 4680 batteries in Texas, in the US. It selected two suppliers from a potential pool of Chinese battery companies based on their production lines.
" The report claims Tesla could continue buying from the suppliers well into 2024 before Panasonic starts mass-producing the 4680 cells in the third quarter. Importing cathode coils will make it easier for Tesla to ramp up its own 4680 production quickly."

So, we have a Canadian article quoting a Chinese article saying that in late 2023 Tesla brought in cathode coils from China, and they *might* continue using this source until Q3 2024.
Is there another source for this, or are you basing your opinion solely on this one January online article? We've seen lots of deliveries of equipment and supplies to the Cathode building in Austin via Joe T and Brad S's drone videos. Are you certain the in-house cathode production in October 2024 is still using materials from China? I am NOT arguing with you, merely asking where your insight into this comes from. Cheers.

Totally understandable.
I'm posting this to calm expectations regarding credit eligibility so people can plan appropriately. Tesla is well versed in the system at this point and would state on the order page if Cybertruck were actually eligible, so this is more of a why it's not as opposed to arguing against Tesla saying that it is. (See 2023 Cybertruck eligibility).

Data points:
Tesla doesn't say it's eligibile
Joe T's videos have shown electrode rolls in shipping crates on site
Lars said on the Q2 call they are looking at end of year for DBE
Tesla has no wet electrode manufacturering

If there were Panasonic or Korean surplus cathode production, Tesla could use that. However, validation and such of a new supplier when they are eventually going to in-house in a few months doesn't make sense. Nor would timeline necessarily help.

If Panasonic cells are validated in Cybertruck, that's probably the fastest route to eligibility, however it would only apply to trucks built with them.

Also, there is no retroactive eligibility after vehicle purchase. So if it wasn't listed when purchased, there is no credit (even if filings for it at tax time).

 

[Baldey]

Any news on this? As far as i can tell its still not listed, and DBE has been pushed to Q2 2025.. Is buying under an LLC the only option for the credit this year?

 

[Gaximus]

Nice!
Unfortunately for me, contract software work doesn't really justify a vehicle.

I try to use the full credit name to reduce confusion but they are very similar.

Do you not drive to clients? or pickup computer hardware in your truck?

 

[DocB]

Shouldn’t there be at least a partial credit?

 

[mongo]

Shouldn’t there be at least a partial credit?

For the normal person Clean Vehicle Credit? Nope.

In 2024, any Chinese components in the battery make the vehicle fully ineligible.
In 2025, Chinese minerals do also.

Partial credit is for vehicles that are eligible but have too low of partner country components ($3,750) or minerals ($3,750).

Commercial credit is also all or nothing based on vehicle and business use, but it does seem the threshold is low.

 

[Jack27]

For the normal person Clean Vehicle Credit? Nope.

In 2024, any Chinese components in the battery make the vehicle fully ineligible.
In 2025, Chinese minerals do also.

Partial credit is for vehicles that are eligible but have too low of partner country components ($3,750) or minerals ($3,750).

Commercial credit is also all or nothing based on vehicle and business use, but it does seem the threshold is low.

Make it a sticky already mods how many more horses need to be beat with this ?

 

[Jack27]

Do you not drive to clients? or pickup computer hardware in your truck?

I sold something the other day on offer up and met the guy some where. Do I qualify ?

 

[Gaximus]

I sold something the other day on offer up and met the guy some where. Do I qualify ?

Depends on the state and how creative you can be.

 

[ThaDon]

Any update here? It’s crazy how Sawyer or anyone else reputable hasn’t commented.

 

[mongo]

Any update here? It’s crazy how Sawyer or anyone else reputable hasn’t commented.

I'm hurt I tell you, hurt...
Unless Tesla updates the Cybertruck order page, there is nothing to report.

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