I wish this article was written with a less biased tone. I'm genuinely interested in understanding it better.
As far as I can tell, the article cites two things: $500M tax savings by using an accelerated depreciation schedule (unclear if they saved $500M more by using accelerated vs a regular depreciation schedule, but I assume no) and they claimed $300M in tax credits.
The article doesn't address the other $1.5B, presumably because it's easier to defend. I didn't read through the 10-K to try and figure this out.
I don't really know enough about what an accelerated depreciation schedule implies, but, taken at face value, they'd have to pay more in taxes in a deferred year which doesn't seem like foul play to me. Tax credits seem to make sense for an EV company?
EDIT: I did some learning, woohoo.
Federal corporate tax rate in America is 21%. The $300M in tax credits is post-tax not pre-tax. The $500M is a pre-tax deduction.
$2.3B - $0.5B = $1.8B
$1.8B * 0.21 = $378M
$378M - $300M = $78M
So, I can't really explain why they didn't owe ~$78M in taxes, but I assume rounding and cursory other stuff. The article probably didn't call out other, minor deductions, but it's also fair of them to not have done so. I was wrong when I said, "The article doesn't address the other $1.5B, presumably because it's easier to defend."
I think the real thing here is the weaponization of EV tax credits as some sort of boogeyman. Personally, I'm all for incentivizing EV companies to create in America.
As far as I can tell, the article cites two things: $500M tax savings by using an accelerated depreciation schedule (unclear if they saved $500M more by using accelerated vs a regular depreciation schedule, but I assume no) and they claimed $300M in tax credits.
The article doesn't address the other $1.5B, presumably because it's easier to defend. I didn't read through the 10-K to try and figure this out.
I don't really know enough about what an accelerated depreciation schedule implies, but, taken at face value, they'd have to pay more in taxes in a deferred year which doesn't seem like foul play to me. Tax credits seem to make sense for an EV company?
EDIT: I did some learning, woohoo.
Federal corporate tax rate in America is 21%. The $300M in tax credits is post-tax not pre-tax. The $500M is a pre-tax deduction.
$2.3B - $0.5B = $1.8B
$1.8B * 0.21 = $378M
$378M - $300M = $78M
So, I can't really explain why they didn't owe ~$78M in taxes, but I assume rounding and cursory other stuff. The article probably didn't call out other, minor deductions, but it's also fair of them to not have done so. I was wrong when I said, "The article doesn't address the other $1.5B, presumably because it's easier to defend."
I think the real thing here is the weaponization of EV tax credits as some sort of boogeyman. Personally, I'm all for incentivizing EV companies to create in America.