Tesla's 'Free' Model X for Referrals Probably Eligible for Federal Tax Credit

teslas 8216 free model x for referrals probably eligible for federal tax credit

Details on Tesla’s “free” Model X for the first 10 referral buyers have been few since the beginning. First it appeared that the program would be limited by time, then it appeared it would be limited by country, now it appears that it’ll be limited by continent.

The first person to refer ten friends in each sales region— North America, Europe, and the Asia-Pacific — will receive a free Founder Series Model X.

But even more unclear is exactly how Tesla will give its winner their new Model X. Depending on how that happens, there are very few scenarios in which the new Model X owner (with 10 friends wealthy enough to buy new Model S cars) wouldn’t qualify for up to $7,500 back from the feds.

A spokesperson from Tesla didn’t comment on whether the Model X referral winner would qualify for the federal tax credit. A spokesman for the U.S. Department of Energy, the government agency that administratively handles the incentive, said he was unaware of a situation similar to Tesla’s Model X incentive and said the vehicle would qualify for the tax credit if the referrer used it as a personal vehicle, and qualified under the law as the original “acquirer” — the IRS doesn’t designate that the person must “purchase” the EV.

The applicable tax code only states that for the car to qualify for the credit ( IRC 30D):

  • the original use of which commences with the taxpayer,
  • which is acquired for use or lease by the taxpayer and not for resale,
  • which is made by a manufacturer,
  • which is treated as a motor vehicle for purposes of title II of the Clean Air Act [42 USCS §§ 7521 et seq.],
  • which has a gross vehicle weight rating of less than 14,000 pounds, and
  • which is propelled to a significant extent by an electric motor which draws electricity from a battery which–
    • has a capacity of not less than 4 kilowatt hours, and,
    • is capable of being recharged from an external source of electricity.

According to several accountants and CPAs, the $130,000+ cars would still be subject to significant income tax, under which there are extremely few scenarios that the qualifying referrer could escape (legally, anyway) paying tens of thousands for their finder’s fee prize.

But for the lucky one in North America who found 10 people to buy a Model S and get a Model X in return, Uncle Sam may have something for you for return for helping out the EV car business.

(Thanks TTAC legal readers!)

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  • Shaker Shaker on Sep 04, 2015

    I would think that the "winner's" vehicle's MSRP would be taxed under "Capital Gains" rules, which would net much more for the Federal Gov't (even with the $7.5k rebate), than a vehicle purchased with after-tax earnings, which would lose the $7.5k. The owner may also owe State Tax, too, depending on the state. I'm sure that the B&B will clarify this as the day moves on... :-)

  • SCE to AUX SCE to AUX on Sep 04, 2015

    The Federal EV rebate program doesn't depend upon the price paid for the vehicle, which is why the i-MiEV, Leaf, and 500e get the same amount as a Model S. So you might ask this - why do lowly EVs get the same rebate as expensive Teslas? Right now, I can get a new 2015 Leaf for $22k BEFORE the $9500 in rebates I'm eligible for, and before any negotiation. If I manage to beat the dealer down to $20k or $10k, what is that to you or anyone else? What if I got it for free after trading in a different car? This ongoing run of editorializing news is unabashed class envy against 'rich' Tesla owners, and by extension, against Tesla itself. Tesla and its buyers didn't invent this policy - liberals did. Now you rail against it because it doesn't benefit the 'right' people in your own eyes. But as another poster astutely pointed out recently, the rebates are not intended to reward people, but to 'save the environment' by keeping one less ICE off the roads. Whether it's a Tesla or a Leaf shouldn't matter - both are highly efficient vehicles that purportedly achieve the stated goals of the rebate programs, as did hybrids before them. So who buys them, and the price paid, is irrelevant.

  • Master Baiter The D-bag elites like Al Gore demanding that we all switch to EVs are the type of people who don't actually drive. They get chauffeured around in black Yukon Denalis. Tesla does have a good charging network--maybe someday they will produce a car that doesn't suck.
  • MRF 95 T-Bird As a Challenger GT awd owner I lIke it’s heritage inspired styling a lot. There’s a lot of 66-67 as well as 68-70 Charger in there. It’s refreshing that it doesn’t look like a blob like Tesla, Volt/Bolt, Mach-e BMW I whatever etc. The fact that it’s a hatch makes it even better as a everyday driver thus eliminating the need for a CUV. If it’s well built and has a reliable track record I can see trading up to it in a few years.
  • Jbawden I thought sedans were dead? Coupes even more so. The core Charger/Challenger buyer is in it for the Hemi. To whom is this and the presumed EV Camaro marketed to? The ICE versions of these cars have a LOT of shortcomings, but rear drive, a V8, and a Tremec 6 speed made all that disappear. If you're forcing me into a 1,000hp appliance, then give me some visibility and practicality while your at it. And for the love of all things holy, please allow me to maintain a little dignity by leaving off the ridiculous space jam sound effects. What out of touch focus group think approved that? It's almost as embarrassing as the guy who signed off on the Pontiac Aztec.
  • Jalop1991 The simple fact is, America and Americans excel at building complex things (bridges, for example) but absolutely SUCK at maintaining them. We're too busy moving on to the next new shiny thing that a politician can get good airtime for. Fixing the bridge? Not sexy. Cutting the ribbon at a new EV charge site? Photo-op worthy. Demanding that the owner of said charging site be accountable and not let his site become the EV equivalent of a slum? Hard and not a newsworthy event.I have a PHEV and once tried some sort of public charging, just to see what happens. Failed miserably. We'd all be riding horses today if gas stations performed like EV charge stations do.
  • SCE to AUX Apps like PlugShare prove a few points:[list][*]Tesla's charging network is the best, almost always earning a 10/10.[/*][*]Dealer chargers are the worst, often blocked (ICE'd) or inaccessible behind a locked gate.[/*][*]Electrify America chargers aren't bad; my few experiences with them have been quite good. But they are also very new.[/*][*]Calling the help line is nearly useless.[/*][*]There are still charging gaps in high-travel flyover areas, which coincidentally have a lot of "Trump" flags waving in them.[/*][/list]As an EV driver and engineer, I don't understand how public chargers get so screwed up. They are simple devices. My home charger is 10 years old and has never missed a beat, but it only gets one cycle a day and lives indoors.
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