Exactly. This is no different than what Aereo did. Go through some contorsions to fit the law, while still giving the customer what they want. Make a lease look like a purchase to get tax credits.

Someone told me Nissan is doing the same thing with the Leaf right now. They are offering dirt cheap leases because the dealership is taking the tax-credit to subsidize the cost. Tesla is just branding it differently.

Coloring shades of grey into our tax laws...

I think this is still well within the spirit of the tax laws. The point of the tax credit is to get people to use green technology and this is doing just that.

What is the spirit of not providing the tax credit to leases as well as purchases? (Actual curiosity, not trying to imply anything.)

I'm guessing one of the main concerns is avoiding the scenario where a bunch of people pass around a single car, and each claims a huge tax credit while not helping the environment (as much).

The current rule is that only the first sale or lease of a car generates a tax credit; in the case of a lease, the leasing company takes the credit (see http://www.fueleconomy.gov/feg/taxevb.shtml , under "Requirements").

Somewhere between tax fraud and the current rule are some legitimate scenarios we probably do want to encourage (like buying a few-year-old electric vehicle instead of a new one, or the same electric vehicle getting leased out multiple times), but these scenarios are:

  1) Harder to monitor
  2) Too long-term to be compatible with the short-term nature of these tax cuts, and government budgeting in general.

What's wrong with giving the tax credit to the leasing company? That just allows them to price it lower. (Similarly, it ideally doesn't make a difference whether you apply sales tax to consumers or sellers. The equilibrium will adjust so that the net money paid/acquired by each will be the same.)

I'd prefer the money go directly to the consumer.

1) It shows consumers that their gov't is supporting this. That's good for citizens to be aware of, regardless of whether you think this credit is a good or bad thing.

2) Ideally, it shouldn't matter but I don't trust car salesman to give consumers the best part of any deal. Consumers are generally not equal negotiators and I suspect sales people will pocket more of the tax incentive.

They can say the car is discounted to include the incentive but they may not apply the entire incentive to the discount. The more complicated a deal is, the less likely a consumer is going to get the better end of that deal.

That may be fine if you're favoring a completely free market but I prefer to side with consumers and favor protection when possible.

Thanks, that makes perfect sense. I didn't realize that the first lease also qualifies for the credit.

Oh I didn't catch that part. You structure a purchase like a lease because you can only get the tax credit on a purchase. The reasoning makes a little bit more sense now.

For some other vehicles (Volt) I've heard the leasing company gets the credit if you lease; probably ought to be the same for Tesla. Dunno why they wouldn't be able to pass that along.

The residual value guarantee is pretty good though.

because tesla doesn't lend money, they make and sell the cars, they do not own them once they are sold

usually there is a separate entity that finances or leases the cars sold at the dealership, such as mbfs for mercedes benz financial services, gmac for general motors (defunct) etc

for tesla to offer the rebate directly they would have to setup a revenue split from the finance back end, or take a hit on the sales revenue, which is either difficult to get out of a bank, and not in the interest of tesla, respectively.

Did not know that. This will hugely increase sales.