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

[RickMachE]

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.

You cannot buyout a Mach-E or Lightning lease...

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[dj_stang]

I think this is way off base.

All the car companies have known, since the law was passed in August 2022, what their specific models would qualify for under the law. There is no surprise involved, except in the auto companies revealing that information publicly. To maximize sales, none of them wanted to provide advanced notice.

Maybe I’m missing something but why wouldn’t car companies announce immediately if their tax credit was going down. The money doesn’t come from them after all, and it would encourage people on the fence to pull the trigger.

 

[4sallypat]

Maybe I’m missing something but why wouldn’t car companies announce immediately if their tax credit was going down. The money doesn’t come from them after all, and it would encourage people on the fence to pull the trigger.

Agree - if manufacturers wait till after it passes, they have to do damage control (refund, incentives, or reduce pricing).

If they give the heads up, then most people would end up buying now...

 

[EVandSolar]

Where can one get the details on manufacturers battery mineral content sourcing and assembly ?

I'd like to know if I should look for a different EV that qualifies for the full tax credit after 4/18.

Will Tesla or GM qualify ?

Standard range Tesla with LFP batteries will only get half the tax credit. I think it says so right on the Tesla website. LR models will continue to get the full $7500 AFAIK:

The new IRA guidelines are indeed going to absolutely tank sales for Hyundai, Kia, and anyone else who does not get at least 1/2 the tax credit.

 

[RickMachE]

Agree - if manufacturers wait till after it passes, they have to do damage control (refund, incentives, or reduce pricing).

If they give the heads up, then most people would end up buying now...

Buy now and stop in 2 weeks....

Nope, keep quiet for as long as possible.

 

[kennethjk]

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

is 20% the same number for luxury cars? Some EVs might not be considered luxury but approach or are at luxury prices.

I wonder what the % of BMW’s or Mercedes cars are leased.

 

[4sallypat]

is 20% the same number for luxury cars? Some EVs might not be considered luxury but approach or are at luxury prices.

I wonder what the % of BMW’s or Mercedes cars are leased.

Majority of BMW and Mercs are leased due to the poor reliability after the warranty runs out.

Plus the inflated residual values makes it hard to pass up a lease.

 

[kennethjk]

Majority of BMW and Mercs are leased due to the poor reliability after the warranty runs out.

Plus the inflated residual values makes it hard to pass up a lease.

Not necessarily because of poor reliability. I have had numerous BMWs and several way over warranty without an issue.

real reason people lease is because as you say inflated residual which keeps lease price down, kind of like what the $7,500 would do. plus BMW used to reimburse dealer a hefty sum when leasing also making lease prices cheaper.

 

[Triggerhappy007]

The new IRA guidelines are indeed going to absolutely tank sales for Hyundai, Kia, and anyone else who does not get at least 1/2 the tax credit.

Hyundai, Kia, Toyota, Subaru, and anyone else with a vehicle built outside of NA lost the tax credit already last August. Hyundai and Kia EV sales are down, but I wouldn't call it tanked.

https://insideevs.com/news/655332/us-kia-ev6-sales-february2023/

https://www.google.com/amp/s/insideevs.com/news/655311/us-hyundai-ioniq5-sales-february2023/amp/

 

[dbsb3233]

is 20% the same number for luxury cars? Some EVs might not be considered luxury but approach or are at luxury prices.

I wonder what the % of BMW’s or Mercedes cars are leased.

It's the overall number (actually about 18%). It probably is somewhat higher for more expensive cars (including EVs), but still likely only in the 20%'s.

 

[voxel]

Hyundai, Kia, Toyota, Subaru, and anyone else with a vehicle built outside of NA lost the tax credit already last August. Hyundai and Kia EV sales are down, but I wouldn't call it tanked.

https://insideevs.com/news/655332/us-kia-ev6-sales-february2023/

https://www.google.com/amp/s/insideevs.com/news/655311/us-hyundai-ioniq5-sales-february2023/amp/

Hyundai offered the $7500 incentive in mid Feb and sales shot up. Ioniq 5s and Kona Electrics that were sitting on lots started to move. March should be a stellar month for the Ioniq 5. Mach-E had the same sales bump when the $55K SUV limit was raised to $80K.

Subaru is also started offering the incentive on leases. I'd be curious to see how sales for that (underwhelming) EV is in March.

 

[kennethjk]

It's the overall number (actually about 18%). It probably is somewhat higher for more expensive cars (including EVs), but still likely only in the 20%'s.

Assuming this article is correct, it’s 77%

https://cartelligent.com/blog/which-car-brands-are-most-often-leased/

edit: from automotive news-

Edmunds' data shows luxury new-vehicle lease penetration plummeted to 26 percent in the fourth quarter of 2022 vs. 53 percent in the same quarter of 2019, pre-COVID.

 

[dbsb3233]

Assuming this article is correct, it’s 77%

https://cartelligent.com/blog/which-car-brands-are-most-often-leased/

edit: from automotive news-

Edmunds' data shows luxury new-vehicle lease penetration plummeted to 26 percent in the fourth quarter of 2022 vs. 53 percent in the same quarter of 2019, pre-COVID.

Well that's bizarre. This one shows 18% overall now, although it was as high as the 30's a few years ago. Seems like the data is all over the map.

https://www.statista.com/statistics/453122/share-of-new-vehicles-on-lease-usa/

 

[abfoot7818]

Ok let’s recap and tie in the thread where Ford dropped the MSRP in reaction to the Tesla drop.

https://www.macheforum.com/site/thr...-pricing-🔻-and-increasing-production-🔺.25617/

Ultimately the MME Cali route 1 is still less than the total original cost, assuming $3,750 instead of $7,500 tax credit BUT subtracting $5,580 price drop from the MSRP I expected when ordered 10/14/22 (build date 4/20/23)

IF the tax credit is totally gone the total cost will go up $1,920 - and we all know if we home charge we will save more than that certainly within the first 3 years if not the first year depending on what your MPG was on the vehicle your replacing and your annual miles and price per gallon. Saying nothing for the joy on instant torque, smooth near silent motor, and less CO2.

 

[4sallypat]

...
Subaru is also started offering the incentive on leases. I'd be curious to see how sales for that (underwhelming) EV is in March.

Leasing an EV under IRS 45W does not seem to be affected by the upcoming 4/18 rule.

Isn't the 4/18 ruling for the 30D EVs for purchase ??

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