New Tesla brand for model 3?

[ww73]

Pure speculation...

By the time the Model 3 launches, we would be pretty close to exhausting the tax credit limit per manufacturer of 200,000 vehicles.

What if Tesla created a new brand specifically for the 3, like Infiniti/Nissan. Will that allow another 200,000 tax credits?

Thoughts? What would be a cool name of this budget brand?

 

[HankLloydRight]

Sounds like tax fraud.

Just because it's a different "brand" doesn't mean the IRS is going to look the other way.

 

[Snow Drift]

Won't work, it's company specific. Brands don't matter, just manufacturer.

The better question is will the government expand the credit to beyond 200k vehicles to promote buying. 2020 will have 500,000 cars a year from Tesla. We need the max limit raised.

 

[RedModel3]

This is the first time I've seen this question asked! BINGO!!! Problem is that Big Oil won't go for it. But we can try, can't we?

 

[ww73]

Toyota has Lexus. Honda has Acura. Nissan has infinity. Chevy has Cadillac.

Why can't Tesla do the same and spin off a budget "manufacturer"?

Suppose this is possible, what would it take?

 

[FlatSix911]

Welcome to the new Edison brand ... sounds like another Edsel!

 

[James Anders]

Toyota has Lexus. Honda has Acura. Nissan has infinity. Chevy has Cadillac.

Why can't Tesla do the same and spin off a budget "manufacturer"?

Suppose this is possible, what would it take?

Chevy has Cadillac? Isn't General Motors has Chevy, Cadillac, etc.?

 

[JoRey]

Why would Tesla make another sub-brand, it would only cause confusion and further fragmentation. Tesla is trying to establish a brand and doing this would cause them to destroy their brand. It is well known that Tesla wants to establish themselves as a automaker for the masses. At least that is what Elon Musk's "dream" is.

 

[tga]

Toyota has Lexus. Honda has Acura. Nissan has infinity. Chevy has Cadillac.

Why can't Tesla do the same and spin off a budget "manufacturer"?

Suppose this is possible, what would it take?

Well, to be pedantic, GM has Chevy and Cadillac. Chevy doesn't own Cadillac; they are peer brands under the GM umbrella.

What does it take? Lots of effort to build a brand. Marketing, etc. Unnecessary expense; Tesla has better ways to spend its money.

Also, as Hank pointed out, it doesn't get them more EV credits. GM has 200,000 in the bank. An ELR uses one; a Volt uses one. Doesn't matter which brand sells it, it all comes from GM's manufacturer pool.

 

[Zarwin]

The tax credit is per manufacturer, but what happens in acquisition scenarios. This is not really a question about Tesla being acquired, I'm just curious as to how this works.

If:

• Company A produces 20,000 EVs
• Company B produces 20,000 EVs
• Company A buys Company B and folds them into the Company A brand

Does Company A now have 40,000 cars produced of their 200,000 allotment or still the original 20,000, or something else?

 

[HankLloydRight]

Does Company A now have 40,000 cars produced of their 200,000 allotment or still the original 20,000, or something else?

I'm not a real tax attorney, but I play one on the internet... I'd say tough nookies, they now have 40,000 cars out of the 200,000 allotment.

 

[ItsNotAboutTheMoney]

I'm not a real tax attorney, but I play one on the internet... I'd say tough nookies, they now have 40,000 cars out of the 200,000 allotment.

Agreed. IAANAL. It is the manufacturer, not make. Most of them are clearly from a manufacturer that reports the makes together. Toyota NA is Toyota-Lexus-Scion, Honda is Honda-Acura.
Hyundai and Kia are more questionable, since they are part of the same group, but have a greater degree of separation.

 

[Electroman]

Actually it should not be 200k vehicles per manufacturer. Instead there should be a pool of 200k * number of manufacturers.

So assuming there are 10 manufacturers as of 2016, then the pool is 2 million cars. Now whoever is good enough to sell more EVs get more of the pie.

 

[techmaven]

I wonder about the Volkswagen Group. Does VW, Audi, Porsche and so on count as one company or separate companies? What happens if two companies merge? In general, the structure of this tax credit didn't make much sense anyways.

 

[ww73]

If the 3 was made in the same factory as the S and X, can it be sold under a different brand?

There's lots of precedent for rebadging.

List of badge-engineered vehicles - Wikipedia, the free encyclopedia

Some that come to mind: Isuzu Rodeo/Honda Passport, Scion FRS/Suzuki BRZ, the original Lexus LX/Land Cruiser.

But, at the end of the day, this might not be worth while for Tesla since they expect to sell well over 200K M3s per year, so creating a new brand is only a very short term tax incentive.

 

[Snow Drift]

So here is the answer:

GM includes Chevy and Cadillac for the total. That makes sense.

VW, Audi and Porsche are each considered different manufacturers per the IRS. So they get 600,000.

I think it is because they are each incorporated in the US since they were separate corporations at one time. They are just owned by VW AG today. The others are brands.

Qualified Vehicles Acquired after 12-31-2009

Based on this, it is possible that if Tesla spun off "Edison Motors Inc" and then TSLA owned the majority of shares, they could get another 200k.

 

[tga]

Actually it should not be 200k vehicles per manufacturer. Instead there should be a pool of 200k * number of manufacturers.

So assuming there are 10 manufacturers as of 2016, then the pool is 2 million cars. Now whoever is good enough to sell more EVs get more of the pie.

I suppose you could argue that one big pool of credits could result in the most EV's being sold (maximizing discounts to purchasers), but a per-manufacturer allotment could motivate more manufacturers to build EV's (by reducing the price of their cars).

But that's a weak motivation for other manufacturers, and probably wouldn't override their fear, risk aversion, and short-term profit mindedness.

 

[Electroman]

The end goal is more EVs on the road and less polluters on the road. It doesn't matter if that end goal is achieved though a single manufacturer or a dozen. So a large pool of zero emission vehicles is the carrot.

The stick that will crack the whip on big polluters like GM and Toyota is CARB standard and ZEV penalties for each of them.

I think that is fair and should help achieve the goal of less polluters on the road.

 

[Zwalderon]

Toyota has Lexus. Honda has Acura. Nissan has infinity. Chevy has Cadillac.

Why can't Tesla do the same and spin off a budget "manufacturer"?

Suppose this is possible, what would it take?

Tesla has worked hard to make the brand something to be proud of. I doubt if they will want to dilute that.
On second thought though; perhaps putting a lower cost vehicle into the same mix will be diluting the brand. Hmm.

 

[Model 3]

Tesla has worked hard to make the brand something to be proud of. I doubt if they will want to dilute that.
On second thought though; perhaps putting a lower cost vehicle into the same mix will be diluting the brand. Hmm.

You have a point here, but I don't think that is a problem with the Model 3. But if they later will make anything even smaller/lower cost like a compact/subcompat EV then it may be a problem. But on the other side - Tesla is making a brand that's about not doing the same thing that all the others do. So they may not make them self a brand as a premium car maker, but more as a advanced autopilot/sporty/EV car maker.