IRS releases new EV credit rules - effective 4/18/23

[dbsb3233]

I don't think we're there yet. I've been looking for a Bolt for a family member and can't find any in stock at any of the dealerships in the area. Or much of anything else. Occasionally a Mach-E or Lightning on the lot but not too often, and usually just 1 or 2 when there are any.

Never seen 10 of any EV sitting on the lot like I found for these Hyundia's. I suspect this is highly driven by the complete loss of tax credit.

The supply/demand imbalance isn't nearly as severe as it was a year or two ago, but I think it still exists. Just to a lesser degree. Except maybe for the models that recently lost the $7500 tax credit, where that demand shifted to those that still get it.

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[generaltso]

Hyundai could be eating the cost by lowering the price, but it's not my understanding that it actually qualifies for the tax credit because it's not assembled in North America (the first prerequisite). It eventually will as they're building a plant in GA, but that's future.

The North America assembly requirement doesn't apply to leases.

 

[dbsb3233]

the BEV industry should stand on its own two feet without the American taxpayer paying a portion a the car cost

100% agree on this. The tax credit never should have been extended, IMO. The old credit made much more sense (just the first 200,000 units per manufacturer to help them get into the business of building EVs). After that point, they should sink or swim on their own. Taxpayer subsidies should have ended at that point, and shifted over to building infrastructure to support them.

10 more years of subsidizing people's new car purchases is crazy bad policy IMO. Especially in the volume expected in the coming years. Can't believe we're crazy enough to still be handing out $7500 taxpayer subsidies to possibly 10 million car buyers a year at the end of the decade. ?

 

[dbsb3233]

The North America assembly requirement doesn't apply to leases.

So he was only talking about leases then, not purchases?

 

[generaltso]

So he was only talking about leases then, not purchases?

In the post that you quoted, yes.

 

[Guss-E 2021]

This was from a year ago...

https://electrek.co/2022/04/22/tesla-using-cobalt-free-lfp-batteries-in-half-new-cars-produced/

Doesn't say CATL specifically but CATL is the main producer of LFP's. I think by a large margin.

I knew Tesla was using CATL's LFP batteries but I think going in on a joint venture to build a new, US LFP factory is new. I'll try to find the story....

 

[mateo]

Here's the countries the US has free trade agreements with that would qualify for critical materials sourcing: Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, Singapore, and South Korea.

Note that the currently written regulation implies that EV specific free trade agreements could be made with countries that don't otherwise have a global free trade agreement due to how the law was ambiguously written. So theoretically countries not on that list could still be included if in the future some sort of partial free trade agreement were created that covers the battery minerals.

 

[dbsb3233]

I knew Tesla was using CATL's LFP batteries but I think going in on a joint venture to build a new, US LFP factory is new. I'll try to find the story....

Yeah, Ford may be first to actually announce a US plant to use CATL's LFP technology.

 

[Blue highway]

Right, but you're putting the blame on the government. The blame is on the car companies, they could have told us in August. Farley said today that they're getting ready to tell us, buying more time.

kinda surprised the government did not post a list months ago.

 

[21st Century Pony]

There is one other factor. War. It's of course an externality, but...

I was a kid when a French contractor's bulldozer damaged a major Iraqi oil pipeline in some desert part of Syria (I think), putting that pipeline out of commission. That was 1973. From some studies and analysis I read later, I understand that event caused a large part of the 1973 / 74 gasoline shock in the United States, which I absolutely remember watching in person, gas station by gas station, although I wasn't driving yet.

We see the impact of the current European war, at least in the headlines. Our forum members here who live in Europe today have to live with a price of their electricity which has doubled because of the war-related economic moves. One such European Mach E driver told me his DCFC charging cost has doubled within the past year.

In this light, albeit it would be an externality if it were to happen, let's think what a(nother) serious Middle East war in the right spot between the right countries could do to the price of gasoline in the United States... and then all of the above calculations would rebalance to different pain points and probably, these EVs now sitting there, would just fly off the lots.

I'm sure I am far from the only forum member who spent some time somewhere in the Middle East. Let's keep that perpetual powder keg in mind. That is actually why I started buying first hybrid, then plug-in hybrid, and now full EVs, as each EV segment matured to practical usability. And, in my eyes anyway, tax incentives to begin the shift from completely oil-dependent vehicles are exactly what our government should be doing, because markets are terrible at anticipating geopolitical pressures and would only follow reactively.

 

[voxel]

Consumers are very sensitive to tax credits and prices. Back in Nov/Dec Teslas were piling up on lots. Same with Mach-Es for the first time. Hyundai Ioniq 5s were piling up too but now with the lease cap reduction they are selling well again.

Manchin must steaming. Foreign automakers will pass through $7500 on EV leases while American carmakers get screwed unless they do the same.

 

[dbsb3233]

kinda surprised the government did not post a list months ago.

It's probably a mess for manufacturers too. Even if they *were* sourcing their battery cells one way some months ago, they may be in the process of rearranging some of that sourcing to qualify for the credits. But that takes time.

Also makes me wonder how they're going to apply the criteria. What if Ford gets 50% of it's Mach-E battery supply from qualifying sources and the other 50% from non-qualifying? Do they apply that to the entire model line even though one VIN may have a fully-qualifying battery pack but another doesn't? I guess they're going to have to average them all together if they're posting qualifications by model. Or maybe it's model + manufacturer date, since the sourcing could change at some point?

What a mess to sort out.

 

[kennethjk]

Is anyone really surprised that the credit is going to be limited .

that’s what I have been reading for months. The purpose of the bill was to support EV’s but only if production was moved to US (and a few others) or away from China

sucks for people who want the credit or bought based on the credit but once the bill was passed , things might have not been cast in stone but car companies knew what the deal was and so did many people.

wishful thinking on the part of many that their car would still be eligible the credit.

 

[dbsb3233]

Hyundai Ioniq 5s were piling up too but now with the lease cap reduction they are selling well again.

That helps a little, but only about 20% of US consumers lease their vehicles. The majority buy.

 

[voxel]

That helps a little, but only about 20% of US consumers lease their vehicles. The majority buy.

You can lease and buyout - saving $6500 or so. Lease + buy was very common with ID.4 owners in 2021.

I haven't yet because I may sell back to the dealer (to avoid paying sales tax) if Kia offers the same incentive on the EV6 GT.

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