Can you write off a Cybercab?

Almost every robotaxi income model we see stops at revenue minus fees. Then someone asks the question that actually moves the number: what does the IRS do with this?

The rules already exist — robotaxis are new, but taxis are not, and neither are business vehicles. What is new is a fact pattern where you own the car, a depot operates it, and a network dispatches it. That structure is where the interesting questions live.

The short version

• A business vehicle's cost is recovered through depreciation; its operating costs are generally deductible. That part isn't exotic.
• Ordinary cars hit the luxury-auto cap — $20,300 of first-year depreciation in 2026. A Cybercab falls under that rule by weight.
• But the cap carves out vehicles used directly in the business of transporting persons for hire — the taxi exception. Whether a depot-operated robotaxi qualifies is the whole ballgame, and it's unsettled.
• 100% bonus depreciation is permanent again — but only for property actually placed in service. A deposit deducts nothing.
• The EV credits are gone for vehicles acquired after Sept 30, 2025.
• Depreciation is a timing benefit, not a gift. It returns as recapture when you sell.

The luxury-auto cap, and why it probably targets you

Internal Revenue Code § 280F limits annual depreciation on a "passenger automobile," which it defines as any four-wheeled vehicle manufactured primarily for use on public roads and "rated at 6,000 pounds unloaded gross vehicle weight or less." The Cybercab's curb weight in its June 2026 EPA filing is 3,113 lbs — see our spec breakdown. It is not a heavy truck. On weight alone, it is squarely inside the definition.

Here is what the cap costs you. Rev. Proc. 2026-15 sets the 2026 limits (summarized by the Journal of Accountancy, March 2026):

Read that against the target price. Musk has repeatedly described the Cybercab as a sub-$30,000 vehicle — a target, not a published price, and one still unaccompanied by an order book. At roughly that cost you would recover most of the car inside three or four years even with the cap applied. It is a speed limit here, not a wall — it bites far harder on a $90,000 SUV than on a purpose-built two-seater.

The carve-out taxis have used for decades

Now the interesting part. That same definition in § 280F(d)(5)(B) says the term passenger automobile "shall not include any vehicle used by the taxpayer directly in the trade or business of transporting persons or property for compensation or hire."

That is why a cab company does not depreciate its fleet $20,300 at a time. A vehicle inside the carve-out is not a "passenger automobile" for these purposes at all, so the annual caps simply do not apply and cost recovery runs under the ordinary rules.

Here is the tension, and we would rather state it than sell past it. The carve-out was written for the taxpayer who runs the transportation business. In a depot model, the owner buys the car and receives ride revenue while an operator does the physical work and a network dispatches. Is that owner directly in the trade or business of transporting persons for hire — or renting a machine to someone who is?

We are aware of no IRS guidance or case law resolving that for an autonomous vehicle on a third-party network, and you should treat anyone who calls it settled with suspicion. What a CPA will likely weigh: whether you hold the car in a real operating entity, whether your revenue is a share of fares rather than fixed rent, whether you carry the commercial insurance and the operational risk, and whether your records look like a business's. Under our structure the owner keeps title, contracts with the network, receives ride revenue directly, and pays the depot separately — facts about how DockDuty is built, not a conclusion about how your return should read.

Bonus depreciation and § 179 in 2026

Two accelerators exist, and they are not the same thing.

Bonus depreciation (§ 168(k)). The One Big Beautiful Bill Act, signed July 4, 2025, permanently restored 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025 — up from the 40% otherwise scheduled. The IRS implemented it in Notice 2026-11. Bonus isn't limited by your business income, so it can create a loss.

Section 179 expensing. For tax years beginning in 2026 the ceiling is $2,560,000, phasing out once total qualifying property placed in service exceeds $4,090,000, per Rev. Proc. 2025-32 (reference summary). Unlike bonus, § 179 cannot push you below zero — it is capped at business taxable income.

Critically, neither accelerator escapes the § 280F cap. If the vehicle is a passenger automobile, the first-year ceiling is $20,300 regardless of which accelerator you elect. The caps are the outer wall; bonus and § 179 only matter inside it. Which is precisely why the carve-out question above is worth more than any election you make.

What else is deductible in a depot model

Ordinary and necessary business expenses are deductible when the activity is a genuine trade or business. The line items a robotaxi owner would actually see:

Net business income may also qualify for the 20% qualified business income deduction under § 199A, which the OBBBA made permanent rather than letting it expire after 2025. Whether your activity qualifies depends on facts we cannot see from here.

"Passive income" is a marketing phrase, not a tax status

We use the phrase ourselves — we have a whole post ranking robotaxis against other passive-income ideas. It means "you don't do the daily work." The Code means something else, and the difference matters.

Under Treas. Reg. § 1.469-1T(e)(3)(ii)(A), an activity is not a rental activity if the average period of customer use is seven days or less — a threshold written with short-term use of tangible property like automobiles specifically in mind. A robotaxi ride lasts minutes. So the reflex answer, "I'm renting out a car, that's passive," probably fails on its own terms. You land instead in the general rules, where passive versus non-passive turns on material participation.

That cuts both ways. Non-passive can be good — early-year losses may offset other income instead of being suspended. It can also be expensive: net income from a trade or business you conduct can carry self-employment tax, which a genuinely passive investment would not. This is the single most common place we see robotaxi spreadsheets quietly assume the flattering answer to both questions at once.

The EV credits are gone — delete them from your model

The OBBBA terminated the § 30D clean vehicle credit and the § 45W qualified commercial clean vehicle credit for vehicles acquired after September 30, 2025, per the IRS FAQ on the law. Both had been scheduled to run through 2032. A Cybercab delivered in 2027 gets neither.

If you find a robotaxi ownership calculator still knocking $7,500 off the purchase price, it was built before July 2025 and has not been updated. Ours does not — run the numbers here, projections labeled as projections.

The bill that arrives later: recapture

Depreciation is a timing benefit. It lowers your basis in the car, and when you sell, gain up to the depreciation you claimed is generally recaptured as ordinary income under § 1245 — not at capital-gains rates.

That is sharper than usual here, because nobody knows the residual value of a purpose-built autonomous vehicle: no used market, no auction history, no three-year-old comparables. Expense the car aggressively in year one and it holds value better than expected, and a chunk comes back as ordinary income later. "I wrote the whole thing off" is a statement about when, not whether.

You live in one state; the car earns in another

Remote ownership is the norm in our model — the owner can live anywhere while the car works at the depot, and we cover the mechanics separately. The tax side adds wrinkles worth naming before you buy, not after.

• Your home state generally taxes your income wherever earned. Florida having no personal income tax doesn't help if you live in California or New York.
• Earning inside a state can create a filing obligation there, depending on the state and the entity.
• Title and registration stay in your home state under our structure — a registration fact, not a tax conclusion.
• Sales and use tax on the purchase is a separate state-level question.

The checklist for the year you actually buy

• Get a CPA before the purchase, not before the filing. Entity choice and titling are hard to unwind afterward.
• Ask the § 280F question by name: "Does the transporting-persons-for-hire carve-out apply to a vehicle I own that a depot operates on a third-party network?" A good advisor will say it's unsettled, then help you build the stronger set of facts.
• Keep gross, not net. Record gross fares, platform fees, and depot fees as separate lines — reconstructing them from net deposits later weakens your position.
• Document the placed-in-service date. It sets the whole depreciation schedule.
• Model the after-tax number, recapture included — see the honest P&L.
• Don't let the tax tail wag the dog. A deduction returns a fraction of a dollar. If the underlying business doesn't work, the write-off doesn't save it — the argument we make in the bear case.

Frequently asked questions

Can you write off a Cybercab on your taxes?

A vehicle genuinely used in a trade or business is recovered through depreciation, and its operating costs are generally deductible. The live question is how much lands in year one. Ordinary passenger autos are capped by § 280F at $20,300 for 2026 with bonus depreciation (Rev. Proc. 2026-15). But § 280F(d)(5)(B)(i) excludes vehicles "used by the taxpayer directly in the trade or business of transporting persons or property for compensation or hire" — the taxi carve-out. Whether a depot-operated, network-dispatched robotaxi puts you directly in that business is the question to put to a CPA before you buy. Not tax advice.

Does 100% bonus depreciation apply to a robotaxi in 2026?

The bonus regime is available — the OBBBA (July 4, 2025) permanently restored 100% bonus depreciation for property acquired and placed in service after January 19, 2025, with IRS interim guidance in Notice 2026-11. Two gates remain: the property must be placed in service, and if it is a § 280F passenger automobile the first-year deduction is capped at $20,300 for 2026 no matter what. A deposit or a stall reservation is not a placed-in-service event.

Is robotaxi income passive income for tax purposes?

Probably not in the way the phrase suggests. Under Treas. Reg. § 1.469-1T(e)(3)(ii)(A), an activity is not a rental activity when the average period of customer use is seven days or less — and robotaxi rides last minutes. That pushes you into the general rules, where material participation decides passive versus non-passive. Net income from a trade or business you conduct can also carry self-employment tax. Fact-specific; ask your own CPA.

Is there still an EV tax credit for a Cybercab?

No. The OBBBA terminated both the § 30D clean vehicle credit and the § 45W commercial clean vehicle credit for vehicles acquired after September 30, 2025, per the IRS FAQ. Any Cybercab bought in 2026 or later gets neither.