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

[jaklou]

Yeah I wonder how that $4000 used car subsidy works? Seems like a really bad idea. People will figure out quickly if they can just keep selling their EV back and forth between their spouse and suck down $4000 each time.

Maybe it's limited to only dealer sales? But that would be grossly unfair to private sellers.

"Grossly unfair" looks like a common theme in this turkey.

It says in the bill that the credit is derived from point of sale, so I’d imagine it would have to be from the dealer in a used car transaction or there is some type of clawback from the original buyer of the original credit.

I like that they have reinstituted the tax credit with the caveat of the cars being assembled in the US. Creates jobs. Don’t see how this is unfair. Helps American workers, manufacturers who lost the credit, and incentivizes more ev sales

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[SWO]

Yeah, I've stated here before that I'm not a fan of changing the EV tax game and giving Tesla/GM more "help" since Tesla at least, has a big headstart which they clearly don't need.

I agree with all the other posters that new EVs never had a problem of buyers, just low supply and everything is pretty much sold already. No incentives didn't make Tesla's less desirable since a LOT of people still bought them and are buying them.

This hurts other manufacturers like Rivian, Lucid, Porsche, Audi, Subaru, etc...with less compelling products vs. the competition (looking at you Subaru).

I agree that used EVs should have a tax credit though since the tax needed to get it was not fair for folks of lower means.

I think the flippers are going to move to the used market with this legislation.

Yeah I wonder how that $4000 used car subsidy works? Seems like a really bad idea. People will figure out quickly if they can just keep selling their EV back and forth between their spouse and suck down $4000 each time.

Maybe it's limited to only dealer sales? But that would be grossly unfair to private sellers.

"Grossly unfair" looks like a common theme in this turkey.

I had the exact same thought and was afraid to even mention it. You won't even have to tie up your capital in an expensive car - just pass around some clapped out Leafs.

 

[generaltso]

The new bill has to make Hyundai unhappy with the rollout of the Ioniq 6, which is clearly a sedan

Not only that, but I don't think any of Hyundai's (or their cousins') EVs are made in North America, so they also won't qualify for the full credit regardless of how they're classified.

Yeah I wonder how that $4000 used car subsidy works? Seems like a really bad idea. People will figure out quickly if they can just keep selling their EV back and forth between their spouse and suck down $4000 each time.

Maybe it's limited to only dealer sales? But that would be grossly unfair to private sellers.

"Grossly unfair" looks like a common theme in this turkey.

Yes, the used car has to be purchased from a dealer to qualify for the credit. It also has to cost less than $25k and is subject to income limits of $75k for single or $150k for joint filers. I believe I also read that there's a limit of one used car credit every 3 years.

 

[voxel]

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.

One of my Mach-E orders had a dealer ask me to sign a detailed buyer's order back in Oct/Nov 2021. I thought that was weird because we all agreed the MSRP price could increase but I guess it was to prove to Ford I was serious (not a fake order) and some protection on my side (this dealer honored MSRP, price protection, rebates at delivery).

But yes... the online $500 deposit on Ford.com would not be anything close to binding.

 

[voxel]

I skimmed the EV section of the bill but this is a great summary (note Australia, Korea are US free trade partners so Korean EVs might be eligible for partial credit)

 

[Mach1E]

Not only that, but I don't think any of Hyundai's (or their cousins') EVs are made in North America, so they also won't qualify for the full credit regardless of how they're classified.



Yes, the used car has to be purchased from a dealer to qualify for the credit. It also has to cost less than $25k and is subject to income limits of $75k for single or $150k for joint filers. I believe I also read that there's a limit of one used car credit every 3 years.

Wow, that’s a horrible idea.

The only people this helps are the dealers (who are in their 3rd year of record profits).

So the dealer gets to raise the price of used EVs by $4k and the consumer pays the same price.

How does this help the environment?

 

[astronut325]

Any incentives for getting solar and home battery?

 

[voxel]

Yeah, I've stated here before that I'm not a fan of changing the EV tax game and giving Tesla/GM more "help" since Tesla at least, has a big headstart which they clearly don't need.

I agree with all the other posters that new EVs never had a problem of buyers, just low supply and everything is pretty much sold already. No incentives didn't make Tesla's less desirable since a LOT of people still bought them and are buying them.

This hurts other manufacturers like Rivian, Lucid, Porsche, Audi, Subaru, etc...with less compelling products vs. the competition (looking at you Subaru).

I agree that used EVs should have a tax credit though since the tax needed to get it was not fair for folks of lower means.

I want all EV tax credits gone but this bill isn't that favorable to Tesla.

Model X and S don't qualify... most Model 3 trims don't qualify either either too expensive (more than $55K or using China-made LFP battery). The only one that gets the credit is the Model Y - assuming Tesla uses battery materials from Australia, Canada, Mexico and not China or Japan.

Subaru will get screwed by this bill. Toyota makes their EVs in Japan with batteries from China.

This bill is very much pushes the big-3 carmakers and others to build in the US/Mexico/Canada with US free trade battery materials.

 

[Mach1E]

I skimmed the EV section of the bill but this is a great summary (note Australia, Korea are US free trade partners so Korean EVs might be eligible for partial credit)

Interesting fine print. Where the battery is made and where the materials are sourced from determines the credit?

Also the 1x per used vehicle credit will be interesting.

How will anyone know if the credit was used on a used vehicle.

Literally ZERO system in place to know if the first person to buy it used…… the price they paid (less than $25k?) and what their taxable income was (more than $150k??)

Seriously….. should be a LAW that the people writing tax laws actually understand tax laws.

 

[SWO]

Any incentives for getting solar and home battery?

Not unless you buy a Lightning.

 

[jaklou]

I skimmed the EV section of the bill but this is a great summary (note Australia, Korea are US free trade partners so Korean EVs might be eligible for partial credit)

Great find…that clarifies a lot

 

[generaltso]

I skimmed the EV section of the bill but this is a great summary (note Australia, Korea are US free trade partners so Korean EVs might be eligible for partial credit)

I'm not sure that lines 6 and 7 of this summary are entirely correct. There's a lot of legalese in the text of the bill, but from what I can tell, it looks like the first $3750 of the credit requires that the vehicle's final assembly happen in North America. Then the other $3750 has all kinds of battery and mineral source rules that change in percentage every year.

 

[luckie]

Yep. Frankly, it's a huge waste of taxpayer money, because virtually every EV made not only sells immediately, but often has months-long waiting lists for it. Makes no sense to waste taxpayer money on products that would sell like hotcakes anyway.

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.

I couldn't agree more, seems like a big waste of taxpayer money, but easy for me to say having already received a tax credit for the Mach-E.

That being said, it is unfortunate that this news broke before ordering opened up for the 2023 Mach-E. Ford will now likely price the 2023 Mach-E higher than they otherwise would have knowing some form of the tax credit is likely to continue indefinitely.

True. But...

It's about the longterm. You know this of course. In reality, turns out among the American people demand for EVs is insanely low, right now like 90% would NEVER EVER consider buying one, just currently the supply of EVs for that insanely low demand is temporarily far far lower. The bill seeks longterm adoption from the majority of Americans in the coming decades. Let's see currently 2%(?) of the cars on the road in the USA are EVs and that may reach 3%(?) next year. If every person in the USA bought only EVs this year and every year after, it would take greater than 20 years for the majority of cars on the road to no longer need gasoline.

 

[Keeperofthe7keys]

Exactly. This is just a wealth transfer from the taxpayers to auto manufacturers who have already benefited from the 200K cap. It spurred them on at the beginning, which was the intention, and they’ve gained a foothold in the market which is a large advantage for the future. Job done. Leave the rest to capitalism. The last thing we need is incentivizing more people to sell like new, perfectly good, fuel efficient ICEs just to get an EV. This is where I feel a clunkers trade in incentive makes the most sense. Retire a dirty vehicle at the end of its service life, next vehicle can be an EV. That way manufacturers don’t jack up the price to capture the credit, and that way we responsibly transition people to EVs at a sustainable pace.

I'd like to point out the irony of complaining about an upwards wealth transfer (the goal of capitalism) and complaining about not leaving it up to capitalism only to go on to advocate for a very socialist solution. For the record I agree with you that would be the most efficient and direct way to make an impact. But the round about way of those more efficient ICE cars being sold used at lower price to replace old guzzlers while an EV indirectly replaced it in the hands of the first car's former owner works too.

 

[dbsb3233]

Inflation reduction act???

That’s hilarious! ?

I’d love to hear the explanation how spending money and raising taxes reduces inflation.

Might as well call it the “tax reduction act” or “spending reduction act.” Both would be equally true.

I'd be embarrassed to put that name on it. It would be more accurate to call it the Cancer Cure Act. At least that would just have no impact at all on it, rather than the opposite effect like this does. More taxation and spending just adds upward inflation pressure, not downward. And more directly, we all know the $7500 tax credit usually just allows manufacturers to jack the MSRP higher, not lower.

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