A Utah-based EV dealer has exposed how some dealerships allegedly manipulate federal tax credit rules, drawing outrage from viewers, and revealing questionable practices in the used electric vehicle market. The two minute, 54 second video, which has garnered 979,000 views since June 11, features Alex Lawrence (@evautoalex) sharing a phone conversation with a follower who encountered what appears to be an illegal scheme to circumvent Internal Revenue Service (IRS) regulations. Lawrence, who runs EV Auto Alex and has built a following of over 163,000 subscribers by providing insider advice on EV financing and buying, recorded the conversation at his standup desk inside his Utah dealership. The video captures a live phone call with a TikTok follower who had attempted to purchase a used Tesla Model 3 the previous day from what he described as "a big dealer group in Utah." The Alleged Scheme Unfolds The caller's account entails a blatant attempt to work around federal tax credit requirements. According to the transcript, the customer visited the dealership specifically looking for a used Model 3 that would qualify for the federal tax credit—meaning it had to be priced at $25,000 or less. "Hey, man, I'm looking for a used Model 3. Something that qualifies for a tax credit, $25,000 or less," the caller told the salesperson. The dealer showed him a vehicle with what appeared to be a $28,500 price tag. When the customer questioned the price discrepancy, the salesperson allegedly revealed their workaround strategy. "So what we do to get around that is we charge you 24.5 [thousand] on paper for the Tesla. And then we charge you like four grand for a charger," the caller recounted. Until it expired on Sept. 30, the federal tax credit for used EVs provided up to $4,000 for qualifying vehicles, if the total purchase price excluding taxes and registration fees was under $25,000. By artificially separating charges and listing mandatory add-ons as separate items, the dealership was allegedly attempting to make an ineligible vehicle appear compliant with IRS requirements. According to IRS guidance on the expired credit, the sale price includes all dealer-imposed costs or fees not required by law, specifically including "the retail price for each accessory or item of optional equipment physically attached to the vehicle at the time of sale." The IRS explicitly states that dealers cannot reduce the sales price of a used clean vehicle based on mandatory add-ons, as "the amount of the reduction would be considered part of the sale price for purposes of the credit." Customer Pushes Back With Evidence The customer wasn't convinced by the salesperson's assurances. Armed with knowledge from Lawrence's previous educational videos, he challenged the dealership. "I just saw a video referring to your video saying that was used to be a gray area, but it was just cleared up where the total purchase price, excluding taxes and registration, has to be below $25,000," the customer told dealership staff. The finance manager was brought in to handle the situation, but continued to insist their method was legitimate. When the customer showed them Lawrence's TikTok explaining the regulations, the finance manager allegedly "tried to brush it off," saying "no, man, that's totally fine. We've done this a bunch of times. It's all good." Lawrence was tickled by this turn of events. "Are you serious? You showed the finance manager a video of me?" he asked, adding "That's awesome." Pressure Tactics Escalate When the customer requested written guarantees that the dealership would cover the $4,000 if the tax credit was denied, the finance manager refused. According to the caller, the dealership then attempted an even more questionable approach. "Ultimately, he says, 'listen, man, we're going to sell you this right now. Tax, title, out the door, 24.5 [thousand]. And then tomorrow you have to come in and pay us $2,000 for TIPS,'" the customer recounted. Lawrence immediately recognized the legal implications. "He wanted to do a separate transaction. Two grand. Dude, that is so illegal," he responded. Had the customer gone through with this, it would likely have constituted tax fraud. The IRS has clear authority to pursue such arrangements as abusive tax avoidance transactions, which include "sham arrangements having no economic significance or business purpose other than the avoidance or evasion of tax." Gallery: Tesla Model 3 Hearse Understanding the Tax Credit Requirements The federal used EV tax credit, which was officially known as the previously owned clean vehicle credit, had specific eligibility requirements designed to help lower-income buyers access electric vehicles. To qualify, the vehicle needed to: Be purchased from a licensed dealer Cost no more than $25,000 Be at least two years old Meet income requirements for the buyer The IRS had been clear that the $25,000 limit applied to the total purchase price excluding only taxes, title, and registration fees. IRS documentation specified that the sale price "includes all dealer-imposed costs or fees not required by law" and explicitly included "dealer documentation fees, which are part of the cost of purchasing a vehicle and are not required by federal or state law." Mandatory dealer add-ons, accessories, and extended warranties also needed to be included in the purchase price calculation. The EV incentive was ended after the One Big Beautiful Bill Act, passed on July 4, eliminated it. Community Response and Industry Recognition The video sparked hundreds of comments from viewers, with many sharing similar experiences at dealerships across the country. Several commenters specifically mentioned dealership groups by name, suggesting the practice may be more widespread than initially apparent. User Dylan Ericksen commented that a local dealership group was "doing what they do best 10/10 don't recommend.” Another commenter, asell87, shared their own experience with what appeared to be the same dealership group: "I left a 1 star review after my experience. They called and sent me a check for $100 to remove the review. They are sleezy." When Lawrence asked for more information, asell87 elaborated, "They called me after I left the review and said how about we send you $100 for the problems with the tire and have you remove that review. I received the $100 for the tire, but kept the review up because they definitely deserve it and want to warn others." Motor1 reached out to the alleged dealership via email for comment. We'll update this if it responds. Customer Buys Their EV Elsewhere Despite the frustrating experience, the story had a happy conclusion. Lawrence offered the customer "$1,000 off any car I have" for "being such a good dude and doing the right thing." The customer took him up on the offer, with Lawrence confirming in the comments that he "came right in and bought" a vehicle from EV Auto Alex. The video also served an educational purpose, with several industry professionals commenting that they had learned from Lawrence's content. User brianatbutler wrote, "I just got my dealership on board with this because of your videos! My managers had no idea about this. So thank you!!" Dealership Workers Weigh In The video attracted attention from dealership employees who wanted to ensure their own stores weren't engaging in similar practices. Halye commented, "I work for a big dealership in Northern Utah and listen to these videos to get clues to make sure it's not any of ours. I have not come across any [dealerships] doing this so far!" Lawrence responded that he wasn't "aware of anyone in Davis county and north doing this," suggesting the practice might be concentrated in specific areas or dealer groups. The Broader Implications Lawrence's video highlights the importance of consumer education in navigating complex federal incentive programs. His approach—combining entertainment with practical advice—has clearly resonated with EV buyers who need reliable information in a rapidly evolving market. The incident also demonstrates how social media can serve as a check on questionable business practices. The customer's decision to show Lawrence's educational content to the dealership staff shows how informed consumers can push back against potentially fraudulent schemes. Lawrence indicated in the comments that he was aware of "three" dealerships engaging in similar practices and was "trying to reach their owners direct man to man first" before taking further action, suggesting he's taking a measured approach to addressing the issue. Motor1 reached out to EV Auto Alex via email for additional comment. We'll be sure to update this if they respond. We want your opinion! What would you like to see on Motor1.com? Take our 3 minute survey. - The Motor1.com Team
Liked by Nicole Tremblay, Morgan Moreau
Liked by Nicole Tremblay, Morgan Moreau
Liked by Nicole Tremblay, Morgan Moreau