Model X cheaper than expected.

M67v · Oct 8, 2015

The Model X is confirmed to be $5,000 more than a comparable Model S. Assuming the Model X base model is going to have a 70 kwh battery pack and it will have Dual-motor AWD, it should be $80,000 starting price. However, I read an article that which basically stated that the Model X qualifies for a federal tax break of $25,000 because of it's weight. This is a huge difference compared to the Model S's $7,500 federal tax break. The Model S 70D with federal rebates is $67,500, and $62,500 for a base 70. If the Model X has a 70D version, and assuming it is $80,000, It would be $55,000 after federal rebates. While still a lot, it is a lot more palatable even compared to the S. In addition, the state of Pennsylvania (where I live) gives you $2,000 off of the price (thanks state of Pennsylvania), so the Model X's price would be an even lower $53,000. Even if it turns out the base motor is the 90D, that would still be a reasonable $68,000 after incentives and before state rebates. The Model X 70D (if possible) would likely have a range of about 190 miles assuming it loses the same amount of range as the Model X 90D compared to the Model S 90D. At any rate, we could only pray that this is true and hopefully even I will get a Model X.
Here is the article: Tesla Model X qualifies for $25,000 tax break

kf93 · Oct 8, 2015

that higher tax break is only for business owners. It's why lots of SUVS all have a gross weight of over 6000 pounds. The base $7500 is for everyone and is a completely different category.

ItsNotAboutTheMoney · Oct 8, 2015

Just to be clear, it's the Gross Vehicle Weight Rating that allows the tax break. GVWR includes payload capability.

TexasEV · Oct 8, 2015

M67v said:
The Model X is confirmed to be $5,000 more than a comparable Model S. Assuming the Model X base model is going to have a 70 kwh battery pack and it will have Dual-motor AWD, it should be $80,000 starting price.

That's an incorrect assumption. The only battery is 90kWH now and for at least a year. A Model S 90D starts at $88,000, that would make the Model X $93,000. As well as not understanding the write off for business use.

Aljohn · Oct 8, 2015

Oddly, the misconception is the $7500 tax credit is a "given". It is not! Each person(s) has an individual tax situation that plays a part on whether he, she or they may qualify. That is the net tax owned must be equal to or greater than the $7500 after other deductions and incentives. Then there are Alternative Minimum Tax rules (ATM) that need be applied and passed... far to complex to discuss here.

Secondly, the 6000 Gross Weight test and the up to $25000 deduction is a business tax incentive not a individual deduction. It is my understanding that it is simply accelerated depreciation expense. Which incense business to acquire new equipment (not just vehicle). The supposition (debatable) is that capital investment moves the economy in general.

So, even though Tesla shows the pricing (net) in some cases, realize that first you must pay for the Gross price of the car, then apply for the tax incentive the following year's tax filings. That is true for the business deduction as well. There are two many nuances for every business and personal taxes to assume one can simply "deduct" $32,700 off the price and call it a day.

MikeC · Oct 8, 2015

Is the $25,000 a tax credit like the $7500 where you deduct the full $7500 from the taxes you owe?

Or is the $25,000 just deducted from taxable business earnings, meaning you save $25,000 x your tax rate? For example, with a tax rate of 33%: 25,000 x .33 = $8,333 in savings.

Aljohn · Oct 8, 2015

It is my experience and understanding that it is a depreciating expense deduction from Gross Earnings -- not a true credit. I will defer to tax accounts here to clarify.

ModelX · Oct 8, 2015

My understanding of the business expense deduction requires that it must be used for business with logs maintained for its business use.

CHG-ON · Oct 8, 2015

The US Press and Wall Street think it's way to expensive and the stock has been hammered ever since the launch. Hopefully the hysteria will end soon!

rallykeeper · Oct 9, 2015

Aljohn said:
Oddly, the misconception is the $7500 tax credit is a "given". It is not! Each person(s) has an individual tax situation that plays a part on whether he, she or they may qualify. That is the net tax owned must be equal to or greater than the $7500 after other deductions and incentives. Then there are Alternative Minimum Tax rules (ATM) that need be applied and passed... far to complex to discuss here.

Not that complex.

The credit is pretty much a given for anyone who is (a) not retired (and possibly living on tax-free income) and (b) capable of purchasing a $70,000 car.

You just need to have a federal income tax liability of $7500. AMT-payers can take the credit too (they couldn't take the pre-2009 credits for hybrids, but that changed). It is very unlikely that anyone with more than $100k or so in pre-tax ordinary income isn't paying at least $7500 in income taxes each year.

Pantoot · Oct 9, 2015

ModelX said:
My understanding of the business expense deduction requires that it must be used for business with logs maintained for its business use.

I thought it also required fold flat seats? Something about a cargo floor of a certain size...

TexasEV · Oct 9, 2015

CHG-ON said:
The US Press and Wall Street think it's way to expensive and the stock has been hammered ever since the launch. Hopefully the hysteria will end soon!

Because they're looking at the price of the Signsture Model X and thinking that's the price of the production ones.

shokunin · Oct 9, 2015

This also requires the purchase of the vehicle as a capital expenditure, versus most business owners leasing and writing off a portion of the payments.

gen3_in_utah · Oct 9, 2015

rallykeeper said:
You just need to have a federal income tax liability of $7500. ....It is very unlikely that anyone with more than $100k or so in pre-tax ordinary income isn't paying at least $7500 in income taxes each year.

You are still over simplifying it. It is pretty easy to have less than $7500 in federal income tax liability with multiple children, and significant itemized deductions with a gross income over $100k.

With some planning, still possible to bunch deductions, but each person needs to do the math.

Longhorn92 · Oct 14, 2015

gen3_in_utah said:
You are still over simplifying it. It is pretty easy to have less than $7500 in federal income tax liability with multiple children, and significant itemized deductions with a gross income over $100k.

With some planning, still possible to bunch deductions, but each person needs to do the math.

Bottom line, for 2015, if your Taxable Income is greater than $46,825 (Single or Married Filing Separately) or $56,150 (Married Filing Jointly), you will get the full $7,500 rebate.

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Model X cheaper than expected.

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