A recent post in a Louisiana Tesla owner Facebook group (h/t to Johnna Crider, who shared this and didn’t want to write it up today) reveals something Tesla could do to give Model S sales a serious boost. If they could modify the suspension just a bit to give the vehicle a 6,000+ pound GVWR, they could make it a lot easier for business owners to buy the vehicle.
— Johnna Crider (@JohnnaCrider1) May 21, 2021
For those of you who are totally lost, don’t worry! I’ll explain it all.
The GVWR is a vehicle’s Gross Vehicle Weight Rating. In other words, it’s what the vehicle can weigh at maximum, fully loaded down with people and cargo. Exceeding that weight by putting too many things in or things that are too heavy is bad for the vehicle, not really safe, and could possibly get you into legal trouble.
Just to be clear, this is different from the vehicle’s actual weight, or “curb weight.” That’s the car’s empty weight, with no people or things inside. The difference between the curb weight and the GVWR is what the vehicle can safely carry without potentially causing damage or being unsafe.
The “Hummer Loophole” (Section 179)
Before you read this section, please keep in mind that I’m not a lawyer or an accountant. I’m only sharing information I found elsewhere (and will include links). Before you make a business or legal decision, please talk to a lawyer and/or accountant so that you can stay out of trouble.
According to this accounting company (and many other sources), a business can write off the whole purchase price of some business vehicles in the first year. To do that, the vehicle must either be a specialized work vehicle (e.g., cargo van, shuttle bus, work truck), OR it must be a heavy vehicle (have a GVWR of over 6,000 pounds). If the GVWR is at all below 6,000 and it isn’t a specialized work vehicle, then limits apply that keep people from being able to write the whole purchase off as a business expense.
Keep in mind that the vehicle has to be used for business 100% to qualify for the full write-off, but you can still get a proportional write-off if the vehicle is used more than 50% for business. For example, if you use the vehicle 80% for business, and it cost $100,000 to buy, then you can reduce your taxable income by $80,000 (assuming you made that much or more, of course).
In past years, people called this the “Hummer Loophole” because many business owners used it to make the purchase of a large luxury SUV more affordable. Before the Model X, this almost always meant a big, polluting, gas-guzzling behemoth like the Hummer (the full-sized military-based one), Cadillac Escalade, or Lincoln Navigator. Many people saw this as an abuse of the tax code, because they often weren’t being used for business.
I’m not saying nobody who bought one of those legitimately used it for their business. People offering “black car” taxi service, driving potential clients around in luxury to get the sale, and many real estate agents legitimately use a luxury SUV to bring in the money, and the luxury part of the equation isn’t just there for their personal gratification.
Now we know why so many doctors, lawyers, and other highly paid professionals are driving a Model X these days. Its GVWR is over 6,000 lb, so they can write the whole thing off if used for business, or write most of it off if they mostly use it for business. It makes sense to take advantage of the tax break.
Once again, though, complicated rules might apply, and I don’t want anyone emailing CleanTechnica complaining that they read this article, got audited, and then think their whopping tax debt is our fault. Ask your lawyer and/or accountant before you write off a Tesla.
What Tesla Can Do Here
The GVWR of a vehicle is determined by the manufacturer. They can’t just BS it and make up whatever number they want, though. It has to be based on what the vehicle’s safe limits actually are.
What probably happened in Tesla’s case is they designed the Model S to be a decent electric sedan, and designed it so that it would serve well in that role. It’s only heavy enough to approach the definition of a heavy vehicle because it needs a lot of battery to have decent range. There probably wasn’t any consideration at all about making it meet the IRS definition of a heavy vehicle, and it just so happened to fall right below the definition.
I don’t know what the vehicle’s limiting factor for GVWR is, but it’s probably in the suspension and/or brakes. If it’s in the vehicle’s structure, there’s not much that can be done without a total redesign, but if I’m right and it’s the suspension that limits GVWR, then there’s room to work.
Tesla could make a special version of the vehicle with a slightly beefed up suspension and brake system for work purposes and possibly towing. It wouldn’t take much to do this, as they only really have a few pounds of additional capacity to gain.
By beefing up the suspension for work purposes, they would actually be making a legitimate work vehicle. There are many businesses that would make good use of a few hundred pounds of extra capacity. For example: a black car service with a driver that weighs 250 pounds and picks up four men at the airport, who weigh 250 pounds each, and then add 400 pounds of luggage. That easily exceeds the Model S GVWR, so the extra strength is a good thing and not just a way to help rich people “cheat” on their taxes.
Handymen, real estate professionals, mobile automotive technicians, roadside service professionals, and even dihydrogen monoxide distribution technicians (including the ones who spe-spe-specialize in supporting athletic counselors/educators) can all use a high-capacity Model S for business.
So, uh, how about it, Tesla? Oh, and while you’re at it, make us some utes!