7 ms·
Is the federal EV tax credit a component of the margin calculations?
by ceterum_censeo 10y ago
Is the federal EV tax credit a component of the margin calculations?
- danhak 10y agoNo, the EV tax credit never goes to Tesla it goes to the consumer. The figures also exclude the CARB ZEV credits.
- ceterum_censeo 10y agoDoesn't the credit go to Tesla when it is leased?
- mikeash 10y agoIt goes to the bank that handles the lease.
- ceterum_censeo 10y agoI guess that is my confusion, I thought Tesla was originating the lease.
- mikeash 10y agoTesla sells the car to a bank, and the bank leases it to the customer. For leases done through Tesla directly, Tesla just talks to the bank for you.
- ceterum_censeo 10y agoSorry, not trying to be difficult, but this doesn't clear things up for me. Are you saying that Tesla does not lease directly to the consumer?
- mikeash 10y agoYes, that's right. They present it as if it were direct, but they're really just acting as a front for a third-party bank. They don't have their own finance arm.
- ceterum_censeo 10y agoOk, got it now, thanks. Any idea why they have to list automotive leasing as a separate line item on their report? If they are selling it to a bank who is then responsible for the lease, why list it separately?
- mikeash 10y agoGood question! I went poking around and turned up this article: http://seekingalpha.com/amp/article/3988503-gaaps-treatment-teslas-sales-bank-leasing-partners-causes-companys-long-term-liabilities http://seekingalpha.com/amp/article/3988503-gaaps-treatment-... If I understand it correctly (probability: moderate?) then it's basically an accounting artifact. The fact that Tesla arranges the lease means they have to book the revenue differently. Somehow....
- ceterum_censeo 10y agoNice find, that helps. My reading is that it's slightly more than an artifact: Tesla is guaranteeing a residual, so the sale to the bank is conditional and so cannot be recorded as a simple sale. GAAP strikes me as a set of things that, alone, are good intentions but combined are more confusing than they need to be.
- mikeash 10y agoMakes sense. And thanks for your persistent questioning, I learned some new stuff!
- ceterum_censeo 10y ago