Depreciation and Section 179 for a Commercial Robotaxi Fleet: MACRS, the For-Hire Exception and Placed in Service
General information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
Business cars, including taxis, are generally depreciated under MACRS based on business-use percentage (IRS Pub 946). Section 179 and the special depreciation allowance need more than 50% business use, and depreciation starts only when the car is placed in service. Individuals can't buy or operate a Cybercab as of October 2026.
Where things stand (October 2026): individuals can't buy or operate a Cybercab. Tesla's Cybercab FAQ lists only a form for commercial purchase inquiries, and Cybercab rides run on Tesla's own Robotaxi service in limited areas of Austin, Texas. This article is for people planning ahead.
Depreciation is usually the largest tax question for anyone thinking about buying cars for a commercial fleet. This article summarizes what IRS publications say, without predicting any result for a specific buyer.
MACRS is the default
IRS Topic 510 says MACRS is generally the only depreciation method for cars placed in service after 1986. IRS Publication 946 explains the recovery periods and conventions. If you use the standard mileage rate in a car's first year and switch to actual expenses later, Topic 510 says you use straight-line depreciation over the car's remaining estimated useful life.
The 50% business-use test
Cars are listed property. Under Pub 946, listed property must be used more than 50% for qualified business use to claim the Section 179 deduction or the special depreciation allowance. At 50% or less, the alternative depreciation system applies. If business use later drops to 50% or less, part of the earlier depreciation may have to be recaptured. Mileage records are what show the business-use percentage.
Placed in service, not ordered
Pub 946 says depreciation begins when property is placed in service, meaning ready and available for its specific use. A purchase inquiry, a deposit or a signed order is not the same thing. For a car that isn't yet sold to individuals, this matters for anyone planning which tax year a purchase might fall in.
Passenger-automobile limits and the for-hire exception
IRS Publication 463 and Pub 946 describe yearly caps on depreciation for passenger automobiles. They also describe exceptions for vehicles used directly in the trade or business of transporting persons or property for compensation or hire, such as taxis. Whether a car dispatched through someone else's network puts the owner directly in that business is a fact-specific question. Treat it as unsettled for network-dispatched driverless cars and ask a preparer.
Section 179 for heavy vehicles
For tax years beginning in 2026, the Section 179 deduction for a sport utility vehicle (generally one rated at not more than 14,000 pounds gross vehicle weight that isn't subject to the passenger-automobile limits) is capped at $32,000 (IRS Rev. Proc. 2025-32; Pub 946). Separately, the special depreciation allowance is 100% for qualified property acquired after January 19, 2025 (IRS Notice 2026-11). Whether a given vehicle counts as an SUV, a passenger automobile or a for-hire vehicle depends on its classification and use, which is a question for your preparer.
Questions to bring to a tax preparer
- Would my use qualify for the for-hire exception to the passenger-automobile limits?
- Will business use stay above 50% every year of the recovery period?
- In which tax year would the car actually be placed in service?
- What happens to depreciation if I sell the car or business use changes?
For the cars you drive for work today, CyberDeduct builds a mileage log around IRS Pub 463 from your Tesla's own trip and odometer data (Model S, 3, X, Y and Cybertruck). See how the log is built or see plans.
Frequently asked questions
Does a deposit or purchase inquiry start depreciation?
No. Depreciation begins when the car is placed in service, meaning ready and available for its business use (IRS Pub 946).
Can I take Section 179 on a car used 50% or less for business?
No. Listed property must be used more than 50% for qualified business use to claim Section 179 (IRS Pub 946).
Are taxis subject to the passenger-automobile depreciation caps?
Pub 463 and Pub 946 describe exceptions for vehicles used directly in transporting persons for hire, such as taxis. Whether a network-dispatched car qualifies is fact-specific.
Can individuals buy a Cybercab?
Not as of October 2026. Tesla lists only a commercial purchase inquiry form (Tesla Cybercab FAQ).
This article is general information, not tax or legal advice. Talk to your tax preparer or attorney about your situation.
CyberDeduct is an independent product of LIKE LLC and is not affiliated with or endorsed by Tesla, Inc. Tesla is a trademark of Tesla, Inc.