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

[DennisD]

Tesla Slashes Prices by $2,000 in Lieu of Max EV Tax Credit

“Tesla sold its 200,000th vehicle in 2018, which means the federal government is starting to phase out its EV tax credits. To soften the blow for customers, Tesla is dropping prices on its vehicles by $2,000.”

GM Continues Large 'Cash On The Hood' Incentive Of $8,500 On Bolt EV

“To make matters worse, in 2019 GM reached the 200,000 EVs-sold mark and the federal tax credit that GM customers got for leasing or purchasing an EV has ended. Losing the federal tax credit really hurt Bolt EV sales, and in order to keep the Bolt EV competitive, GM has been offering "cash on the hood", factory to dealer incentives to make the Bolt more attractive.

The amount of the incentive has fluctuated month to month, and currently, at least through the end of May, GM is offering $8,500 off a cash purchase of any 2020 Bolt EV. If the customer wants to finance the vehicle, they will get 0% financing for 72 months with a $4,700 cash allowance.”

You had me at "To soften the blow for customers".

Car manufacturers have been doing this for years without tax incentives. When gas went up a few years back, I could have purchased a large SUV for thousands under what it was bringing before said price increase. They need to move inventory.

That doesn't mean that their cost to make it went down, it simply means that they are cutting their losses and cleaning shop so to speak.

The incentives help move inventory and thus, making for a cleaner environment.

Did you ever wonder why Tesla raised their prices back up? It was the cost of manufacturing for said product. It had nothing to do with a proposed tax incentive bill.

Who knows, the Senator from Arizona is not on board with a statement yet of approving it and this may not happen anyway.

Sponsored

 

[MrSensei]

There is no income limit for the current federal tax credit. You just have to have at least $7500 of federal tax liability to get the full credit. You'll file for it when you do your taxes next year.

Thanks for clarifying that for me

 

[dbsb3233]

I'm actually not. I look up historical prices of nearly everything I buy on slickdeals, etc...Call me poor/cheap, etc. I am not well off enough to not spend the time to research practically everything I buy that's a fairly substantial amount.

I suppose at the end of the day, it boils down to the individual. There are never ADM people here, etc.

Oh I'm always looking for a good deal too. I just meant tax credits. We're not getting those for a TV, or a couch.

 

[Caulk-E]

Not quite sure why a lot of people are concerned about Ford raising prices in anticipation of the EV tax credit. If this bill passes, the Mach-E will probably only qualify for $3,750 tax credit.

The climate deal struck yesterday by Senate Majority Leader Chuck Schumer and Sen. Joe Manchin would significantly expand consumer tax credits for electric vehicles by offering a $7,500 tax credit to people buying an EV made with a certain percentage of minerals mined or processed in nations with U.S. free trade agreements, or recycled in North America.
But there’s a catch: The EV supply chain required for the tax credit doesn’t exist.

Minerals required to make market-ready EV batteries — lithium, cobalt, graphite and nickel — are primarily mined, refined and processed in China and Russia or in less adversarial nations like the Democratic Republic of Congo and Indonesia that aren’t parties to U.S. free trade agreements

“These things aren’t in place, and might not be for more than a decade,” said Morgan Bazilian, director of the Payne Institute at the Colorado School of Mines.
The requirement, he added, “may limit the amount of tax credits that get the full amount.”

Manchin was firmly against incentivizing EV sales when manufacturers are selling every car they produce and now all of a sudden he’s on board with EV tax incentives? The reason he’s on board now is because most EVs, if not all, won’t even qualify for the full $7,500 tax credit. This bill is just a ruse to force manufacturers to build cars and mine minerals in America.

 

[ARK]

You had me at "To soften the blow for customers".

Car manufacturers have been doing this for years without tax incentives. When gas went up a few years back, I could have purchased a large SUV for thousands under what it was bringing before said price increase. They need to move inventory.

That doesn't mean that their cost to make it went down, it simply means that they are cutting their losses and cleaning shop so to speak.

The incentives help move inventory and thus, making for a cleaner environment.

Did you ever wonder why Tesla raised their prices back up? It was the cost of manufacturing for said product. It had nothing to do with a proposed tax incentive bill.

Who knows, the Senator from Arizona is not on board with a statement yet of approving it and this may not happen anyway.

You asked for the proof but are just brushing it aside.

It’s not that the cost magically goes down when the tax credits expire but rather, the manufacturer gets to make additional profit, courtesy of public money, while the tax credit is in effect.

Just because the tax credit says you get $7,500 back at tax time doesn’t mean the manufacturer didn’t capture a big part of that by charging more than they otherwise would have for the vehicle.

Tesla and GM adjusted their pricing once they started to lose the tax credit. GM more so because unlike Tesla, no one was in a multi-month line to buy a Bolt when their tax credit eligibility expired.

 

[SWO]

https://www.caranddriver.com/news/a30234650/tesla-price-increase/

Please show me your evidence? The article above proves my point.

MSRP and rebates are two different animals. Both drive car sales but I am not finding your assertion that Tesla cut their prices?

The same quarter that GM's tax credit dropped from $7500 to $3750, GM added $5500 in incentives to the Bolt. The car manufacturers are getting subsidized, not the buyers.

It’s worth noting that the complete federal electric vehicle tax credits ran out on April 1st, making EVs like the Bolt less attractive to the customer. So, in what is perhaps an effort to maintain this current upward trajectory, a new Chevrolet discount reduces the price of select Bolt EV by $5,500 in July 2019.​

​

https://gmauthority.com/blog/2019/07/chevrolet-discounts-bolt-ev-by-5500-in-july-2019/​

 

[NJ_MachE]

You asked for the proof but are just brushing it aside.

It’s not that the cost magically goes down when the tax credits expire but rather, the manufacturer gets to make additional profit, courtesy of public money, while the tax credit is in effect.

Just because the tax credit says you get $7,500 back at tax time doesn’t mean the manufacturer didn’t capture a big part of that by charging more than they otherwise would have for the vehicle.

Tesla and GM adjusted their pricing once they started to lose the tax credit. GM more so because unlike Tesla, no one was in a multi-month line to buy a Bolt when their tax credit eligibility expired.

Why do we keep going back and forth on this. It's been obvious for quite a while in this conversation that incentives help both the manufacturer and the buyer. benefits get captured by both, not just one or the other. That's their point.

 

[Sneezy]

Why do we keep going back and forth on this. It's been obvious for quite a while in this conversation that incentives help both the manufacturer and the buyer. benefits get captured by both, not just one or the other. That's their point.

The dirty truth of tax credits is that everyone else pays for it. The Government needs a certain amount of money to run. When they give out tax credits, they have to raise some form of tax or borrow with interest. So everyone pays.

You (can't) shouldn't favor just 1 industry but they do that. Big oil, big pharma. My business? HA. Nothing. Favoritism needs to stop.
I bought an EV because I wanted to not because there was an incentive. The tax incentive was a bonus but I would have bought it either way.

 

[NJ_MachE]

The dirty truth of tax credits is that everyone else pays for it. The Government needs a certain amount of money to run. When they give out tax credits, they have to raise some form of tax or borrow with interest. So everyone pays.

You (can't) shouldn't favor just 1 industry but they do that. Big oil, big pharma. My business? HA. Nothing. Favoritism needs to stop.
I bought an EV because I wanted to not because there was an incentive. The tax incentive was a bonus but I would have bought it either way.

I appreciate your Small Government 101 lecture but my post is in regards to the benefits of the tax incentives, not the costs. The benefits help both the buyers of EVs and the manufacturers of EVs, not just one or the other. They also help society by getting more EVs on the road. And half of this thread has gotten a little hung up on this, to say the least.

 

[Mach1E]

I appreciate your Small Government 101 lecture but my post is in regards to the benefits of the tax incentives, not the costs. The benefits help both the buyers of EVs and the manufacturers of EVs, not just one or the other. They also help society by getting more EVs on the road. And half of this thread has gotten a little hung up on this, to say the least.

That’s probably closer to the truth than either argument being made.

It’s not necessarily one vs the other.

But that still doesn’t say we NEED another DECADE of incentives.

Car manufacturers are making record profits right now.

Consumer demand outstrips supply by a significant margin, even at full price.

And the result? High inflation.

This bill is literally the opposite of what we need right now to combat inflation. Which makes the name of the bill so hilarious.

If BEV manufacturing costs were too high for those who already used the 200k credits AND consumers weren’t buying every BEV built…….. maybe we would need some government help.

But instead the opposite is the case. This is a total money waste. Spend the $$ on environmental issues and industries that actually NEED help right now.

 

[Mach1E]

This would be the equivalent of giving home buyers $10,000 for buying a new energy efficient home right now………. Then expecting new home prices to decrease.

It’s like the people writing the laws don’t know how math nor money works…..

 

[Sneezy]

I appreciate your Small Government 101 lecture but my post is in regards to the benefits of the tax incentives, not the costs. The benefits help both the buyers of EVs and the manufacturers of EVs, not just one or the other. They also help society by getting more EVs on the road. And half of this thread has gotten a little hung up on this, to say the least.

At this price point, do the people need help? People keep buying EV's regardless.
Even if the $7500 came off the sticker price.... If you NEED that to buy an EV at this cost, you shouldn't.
So no, I don't agree with the bennies for either side. The manufacturers are already rich.

 

[dbsb3233]

Not quite sure why a lot of people are concerned about Ford raising prices in anticipation of the EV tax credit. If this bill passes, the Mach-E will probably only qualify for $3,750 tax credit.

The climate deal struck yesterday by Senate Majority Leader Chuck Schumer and Sen. Joe Manchin would significantly expand consumer tax credits for electric vehicles by offering a $7,500 tax credit to people buying an EV made with a certain percentage of minerals mined or processed in nations with U.S. free trade agreements, or recycled in North America.
But there’s a catch: The EV supply chain required for the tax credit doesn’t exist.

Minerals required to make market-ready EV batteries — lithium, cobalt, graphite and nickel — are primarily mined, refined and processed in China and Russia or in less adversarial nations like the Democratic Republic of Congo and Indonesia that aren’t parties to U.S. free trade agreements

“These things aren’t in place, and might not be for more than a decade,” said Morgan Bazilian, director of the Payne Institute at the Colorado School of Mines.
The requirement, he added, “may limit the amount of tax credits that get the full amount.”

Manchin was firmly against incentivizing EV sales when manufacturers are selling every car they produce and now all of a sudden he’s on board with EV tax incentives? The reason he’s on board now is because most EVs, if not all, won’t even qualify for the full $7,500 tax credit. This bill is just a ruse to force manufacturers to build cars and mine minerals in America.

Interesting. If accurate, might end up being sort of a silver lining as I don't think we should be throwing taxpayer money at an already-hot market anyway. This might actually result in fewer subsidies handed out in total.

But I never underestimate the ability of people to find ways around govt policy manipulations to get "free" money from the other taxpayers. And govt trying to micromanage source materials for a complex product like batteries seems like it would be ripe for playing a shell game with.

Guess we'll see. If the bill even gets that far.

 

[rcechinel]

Even if the $7500 came off the sticker price.... If you NEED that to buy an EV at this cost, you shouldn't.

 

[rcechinel]

Because, for me, it only made financial sense with the rebate. Which it doesn't mean I didn't have the means to pay more. I'm pragmatic and diligent with money, and things need to fit their cost into the value I attribute to them, not the other way around. The exception is cape cod potato chips, I'd pay anything for that.