Senate Bill Deal to Expand EV Tax Credits (7/27/2022)

[Socalsp3]

But here’s the thing, if you didn’t buy yours, someone else would have snapped it up. The tax credit is baloney when it comes to consumers. It will benefit the manufacturers and in turn the shareholders.

It's to help GM and ford produce more EV instead of ice vehicles. EVs don't make as much profit as ice right now if any. Tesla does not need it though.

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[Bayviews88]

Yeah, but they’ve got some work to do to make sure the MME is classified as an SUV by next year.

I doubt that's happening. But what could happen is stripping our some features on the Premiums to get them just under $55,000. That's the kind of unintended consequences you get when placing arbitrary price limits in legislation like this. $7500 difference just because it goes $500 over. Horrible design (but par for the course for government manipulation).

Ford has already worked this out. The EPA and U.S. Department of Energy have determined that the 2022 MachE is a SUV for energy fuel economy, CAFE standards and IRS 30(D) aka EV Tax Credit purposes. Therefore the $80,000 cap will apply to the 2022 and 2023 MachE.

 

[AZBill]

It's to help GM and ford produce more EV instead of ice vehicles. EVs don't make as much profit as ice right now if any. Tesla does not need it though.

GM is doing that, even without this. The first new battery factory in Lordstown starts operations in August, and they have two other battery factories being built.

 

[Bayviews88]

Interesting clause/loophole.

"(l) TRANSITION RULE.—Solely for purposes of the
application of section 30D of the Internal Revenue Code
of 1986, in the case of a taxpayer that—
(1) after December 31, 2021, and before the
date of enactment of this Act, purchased, or entered
into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue
Code of 1986, as in effect on the day before the date
of enactment of this Act), and
(2) placed such vehicle in service on or after the
date of enactment of this Act"

This is huge! If I am reading section (1) correctly, we don’t have to worry about a cap this year affecting MachE and other EV purchases.

Now, does this also mean the tax credit cap is retroactively removed for any EV purchases made in 2022 from a manufacturer that already hit the cap? (e.g. GM, Tesla, Toyota?)

 

[voxel]

This is huge! If I am reading section (1) correctly, we don’t have to worry about a cap this year affecting MachE and other EV purchases.

Now, does this also mean the tax credit cap is retroactively removed for any EV purchases made in 2022 from a manufacturer that already hit the cap? (e.g. GM, Tesla, Toyota?)

It's for EVs ordered in 2022 that might be delivered in 2023 so they get grandfathered.

"placed such vehicle in service on or after the
date of enactment of this Act "

I was going to joke about folks here buying a Lucid or Taycan now because they won't get the credit in 2023. There's some US-based rules that also might make Hyundai + Kia ineligible for full tax credits. VW will be making ID.4s in the US so those will qualify.

 

[Bayviews88]

It's for EVs ordered in 2022 that might be delivered in 2023 so they get grandfathered.

"placed such vehicle in service on or after the
date of enactment of this Act "

I was going to joke about folks here buying a Lucid or Taycan now because they won't get the credit in 2023. There's some US-based rules that also might make Hyundai + Kia ineligible for full tax credits. VW will be making ID.4s in the US so those will qualify.

Thank you for the clarification about 2022 orders! In my excitement I missed that key detail!

I’m sure the Korean and other non-U.S. automakers are going to have a cow about the North American materials, battery and final assembly requirements for an EV to qualify for a tax credit so this may change again before a vote.

 

[bp99]

If the tax credits are so critical to EV adoption, why is it that every single EV built gets sold right away or they are all on back order? That includes all the Tesla and GM EVs. The problem is not a lack of customers, it is a lack of capacity to build them.

And a big part of the capacity to build them is the raw materials for batteries. They don't need to further subsidize EV purchases (or battery factories with "loans"). They need to overhaul red tape and regulations around mineral extraction. It wouldn't even need much federal funding. The market demand is there. It needs the government to get out of the way, not get more involved. Spurring demand of a product that is already supply constrained just leads to higher prices.

This is just more government money entering the market which is exactly what led to current inflation. It's what led to sky rocketing college tuition when the government took over student loans. Why do politicians never learn from their mistakes and just double, triple down on spending that buys them votes today, but creates bigger problems for everyone tomorrow?

 

[OrchidMania]

Well there are some people who claim to be billionaires that have very creative tax attorneys to lower their tax iabilities The rest of us just pay our taxes.... Glad to see that it isnt retroactive, but I could have justified not getting the $7500 tax credit, with the HUGE increase I got for my used car when I got SALL-E

Also don't understand the references to cars built out of the US.(or is North America materials required in the bill.. So we qualify for Mexico......as part of NA

 

[Regulus7]

This hits EV buyers in NY and CA who will likely exceed the income caps. So I wonder if there will be a surge of buying whatever is available over the next 5 months, already at my office there are three people I have spoken with early this morning that are going to accelerate their EV purchase to this year given they will not qualify next year. Now of course the challenge is to find something in stock!

 

[NJ_MachE]

This hits EV buyers in NY and CA who will likely exceed the income caps. So I wonder if there will be a surge of buying whatever is available over the next 5 months, already at my office there are three people I have spoken with early this morning that are going to accelerate their EV purchase to this year given they will not qualify next year. Now of course the challenge is to find something in stock!

Not sure we need to shed a tear for the the 4% of Americans who make more than 300k. I think they'll be fine.

 

[Z-one]

Interesting clause/loophole.

"(l) TRANSITION RULE.—Solely for purposes of the
application of section 30D of the Internal Revenue Code
of 1986, in the case of a taxpayer that—
(1) after December 31, 2021, and before the
date of enactment of this Act, purchased, or entered
into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue
Code of 1986, as in effect on the day before the date
of enactment of this Act), and
(2) placed such vehicle in service on or after the
date of enactment of this Act"

I wouldn’t think placing an order online would be a written binding contract. Unless Ford changes it’s approach we have seen over and over again dealers not even honoring the deposit.

 

[Mach1E]

Don't get excited, Sinema will still sink it.



The biggest issue with the current credits is they're non-refundable, so you have to have a higher income to get the full benefit. This is a bigger issue than income or price limits. Though yeah obviously Someone making 200k doesn't need help buying their Taycan. The middle class family might need help buying their Rivan to fit the kids in, though. Granted that example might just be that a high end vehicle is the only full size SUV atm.

This will be a great time to figure out if the people writing tax laws understand how taxes work.

If it’s still a a nonrefundable tax credit and it’s only for lower income individuals….. maybe no one will get the full credit. ?

A few recent examples of blunders-

2020- 0-16 yr olds parents got a COVID check in the mail. 18+ got their own checks. 17 year olds? Apparently the government hates them and they get nothing.

ACA- in many states* there are a large group of people who are “too rich for Medicaid” but “too poor for ACA subsidies.” No healthcare for you!

*Technically all states. Medicaid is income AND asset based. ACA is income based only. The two were never designed to work together properly.

 

[SWO]

I wouldn’t think placing an order online would be a written binding contract. Unless Ford changes it’s approach we have seen over and over again dealers not even honoring the deposit.

This is a good segue to the other part of the bill: funding the IRS to hire more compliance agents for audits.

 

[shelnian]

If they're gonna throw our money around like that, they should make apartment and hotel EVSE installations the target. That's the lagging area that needs a push. The EVs themselves are already rolling. So is DCFC network expansion. Lots of federal, state, and private investment already happening there. What's lagging is Level 2 rollout plans, especially for apartments.

The already past infrastructure bill does this. Tesla is using some of this money to add CCS connectors to it's existing and to be installed supercharger stations. Tesla will take government handouts whenever they can. All the big EV chargers will be adding DCFCs with this government handout. Will be good for us EV owners.

 

[TGIF]

True. I'm a bit confused to about something too and hoping someone can clear this up for me. having Manchin approve of this is being made out to be a big deal. And it is. But is this being passed through reconciliation or will they still need Republicans to get on board for it to beat a filibuster?

It’s called the Inflation Reduction Act. It will also need Sinema’s support. I’m not sure that it is a reconciliation bill so may need to get Republican support, too. Will try to confirm. Includes right for Medicare to negotiate drug prices and minimum tax of 15% on corporations with $1B of book profits which could be difficult to vote against.

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