The end of the federal EV tax credit?

[shutterbug]

Except the price at the gasoline pump would sky rocket and that would make electric vehicles a much better deal.

Define "sky rocket"
https://usa.oceana.org/oil-gas-subsidies-myth-vs-fact/

MYTH: Eliminating subsidies to the oil and gas industry will raise gas prices.​

​

FACT: Variations in gas prices are driven by the world market, and are not dependent on U.S. government policies. This includes the existing subsidies for the oil and gas industry according to multiple studies that have found that repealing oil and gas subsidies would have only a marginal impact on gas prices. Assistant Secretary of the Treasury Alan Krueger estimated in 2009 that “eliminating [oil and gas subsidies] would have an insignificant effect on world oil prices.”1 Analysis by the think tank Resources for the Future arrived at a similar conclusion, finding that eliminating oil and gas tax preferences would increase the world oil price by just 10 cents per barrel in 2030.2 This minimal increase in cost would translate to an extra expenditure of $2.17 per year on petroleum products for the average U.S. consumer.3 At the same time, the U.S. government – by eliminating unnecessary subsidies for oil and gas – would be saving on the order of $10 billion per year4 that could be invested in other national priorities like defense, transportation, or alternative energy. A Congressional Research Service report corroborates these findings.5 Gilbert Metcalf, Deputy Assistant Secretary for Environment and Energy at the U.S. Department of Treasury, also has said that removing U.S. tax subsidies for oil and companies will have an “imperceptible” effect on world oil supply.6​

Sponsored

 

[shelnian]

I wonder, what would happen if all the give away$ to “Big Oil” were ended?

The price of oil is based on the world price, government incentives to big oil just adds to their profits.

 

[phil]

Not sure why this time would be any different.

Because last time it was ONLY Tesla that lost the credit - the market in which they competed was unchanged. Tesla had to reduce their prices to remain competitive in their market. That was the obvious market response, and Tesla did indeed cut prices, just as you say.

This time would be very different. The ENTIRE EV segment would lose the $7,500 tax credit. A falling tide lowers all boats.

It is true that there are details that would impact the amount and timing of the EV segment price increases - EVs do still compete against ICE cars as part of the same market, some manufacturers (in the short term) are not qualifying for the full amount of federal subsidy, some consumers are ineligible for the subsidy, etc. But the big picture impact of ending the federal tax credit will clearly be a substantial price increase for all EVs, and likely a significant slowdown of EV market penetration and consumer adoption. Neither Tesla nor Ford nor anyone else is going to eat a new financial loss of $7,500 per vehicle and pass the loss on to stockholders. That just can not happen. EV prices must go up.

 

[Phil_Gtown]

Canada still has the federal rebate. Topped by some provinces. The rebate program from the latter is reducing however. It is a matter of time.

Yes but the clock is ticking on that one as well. I decided to move forward as I saved at last 13K (CAN) in Federal and Provincial rebates.
As someone said, EV incentives will or should be balanced eventually at the Manufacturer level. Price can only come down with increase demand.

 

[Art]

A bunch of automakers and battery companies invested into factories based on the $7500 Made in America EV requirements.

Would be a damned shame if all those states that won the factories lost those jobs because the tax incentives got killed.

Well, it's a certainty it will be lost. Trump doesn't like EVs and thinks climate change is a hoax. Elon Musk, after years of getting help from the government would like it gone, since he can now make a car cheaper than any other car maker.

 

[Sikkun]

Well, it's a certainty it will be lost. Trump doesn't like EVs and thinks climate change is a hoax. Elon Musk, after years of getting help from the government would like it gone, since he can now make a car cheaper than any other car maker.

You’re underselling it. Don’t be shocked when there is a new program that magically only benefits Tesla.

He still loves his handouts.

 

[johnnycombo]

Define "sky rocket"
https://usa.oceana.org/oil-gas-subsidies-myth-vs-fact/

MYTH: Eliminating subsidies to the oil and gas industry will raise gas prices.​

​

FACT: Variations in gas prices are driven by the world market, and are not dependent on U.S. government policies. This includes the existing subsidies for the oil and gas industry according to multiple studies that have found that repealing oil and gas subsidies would have only a marginal impact on gas prices. Assistant Secretary of the Treasury Alan Krueger estimated in 2009 that “eliminating [oil and gas subsidies] would have an insignificant effect on world oil prices.”1 Analysis by the think tank Resources for the Future arrived at a similar conclusion, finding that eliminating oil and gas tax preferences would increase the world oil price by just 10 cents per barrel in 2030.2 This minimal increase in cost would translate to an extra expenditure of $2.17 per year on petroleum products for the average U.S. consumer.3 At the same time, the U.S. government – by eliminating unnecessary subsidies for oil and gas – would be saving on the order of $10 billion per year4 that could be invested in other national priorities like defense, transportation, or alternative energy. A Congressional Research Service report corroborates these findings.5 Gilbert Metcalf, Deputy Assistant Secretary for Environment and Energy at the U.S. Department of Treasury, also has said that removing U.S. tax subsidies for oil and companies will have an “imperceptible” effect on world oil supply.6​

I call(poker term) your fifteen year old report, and raise with one that’s two hours old!

https://www.reuters.com/sustainability/trillion-dollar-question-fossil-fuel-subsidies-2024-11-15/

https://en.wikipedia.org/wiki/List_of_countries_by_oil_production

 

[phil]

Elon Musk...can now make a car cheaper than any other car maker.

Nissan makes the Versa for a total cost of about $16k. Elon can't touch that.

Now, if you're talking about electric cars only, then I think you're right!

Except for China...

 

[AZBill]

Because last time it was ONLY Tesla that lost the credit - the market in which they competed was unchanged. Tesla had to reduce their prices to remain competitive in their market. That was the obvious market response, and Tesla did indeed cut prices, just as you say.

This time would be very different. The ENTIRE EV segment would lose the $7,500 tax credit. A falling tide lowers all boats.

It is true that there are details that would impact the amount and timing of the EV segment price increases - EVs do still compete against ICE cars as part of the same market, some manufacturers (in the short term) are not qualifying for the full amount of federal subsidy, some consumers are ineligible for the subsidy, etc. But the big picture impact of ending the federal tax credit will clearly be a substantial price increase for all EVs, and likely a significant slowdown of EV market penetration and consumer adoption. Neither Tesla nor Ford nor anyone else is going to eat a new financial loss of $7,500 per vehicle and pass the loss on to stockholders. That just can not happen. EV prices must go up.

GM lost the credit also, not just Tesla.

 

[zvez]

Nissan makes the Versa for a total cost of about $16k. Elon can't touch that.

Now, if you're talking about electric cars only, then I think you're right!

Except for China...

I can guarantee you that the 100% china tariffs on evs will stay in place and probably increase. I think the regime coming on board over the next four years will be very detrimental to EVs in general with a big carve out for elmo.

 

[moog]

China/Asia is the biggest car market.
China is making AND selling EV's in droves.
China is making them cheaper.

US is behind in the EV game .

GM is pretty much absent in Europe.
Ford not far behind.
Cannot compete in the EV game in China.

If the EV tax credit is eliminated, and EV sales in the US crater, that will signal a pivot to ICE for US automakers.....thus sealing their fate and making them a domestic ONLY automaker, while the rest of the world moves on and continues EV advancement.

Killing automotive and technology advancement (EV) in the US in favor of Big Oil while the rest of the world leads in this area (along with renewable energy) is a fools errand that only benefits fossil fuel lobby.


Clowns are selling this as US energy independence "Merica freedum and power"
Meanwhile China leads in renewable energy, and EV's.
US will continue its slow downward slide.

 

[phil]

GM lost the credit also, not just Tesla.

So did Toyota, eventually. But Tesla was first, and they were alone for the first part of the phase-out of the tax credit, and so Tesla had to adjust their pricing accordingly.

 

[Space_Pony]

Except the price at the gasoline pump would sky rocket and that would make electric vehicles a much better deal.

I don't think people trying to get by on lower incomes would consider that a better deal. When they need new transportation they would need to buy an older clunker to be able to afford to make it to work.
A lower priced EV without all the bells and whistles might be the answer.

 

[johnnycombo]

I think loss of the federal credit is not a game changer for electric vehicles in the US, like the rest of the world, many US states have planned bans on internal combustion engines.

https://www.cnet.com/home/electric-vehicles/states-banning-new-gas-powered-cars/

 

[leeman]

Well, these types of credits are great in some situations but we all end up paying that money back at some point and they've discounted the prices on the vehicles so maybe it's a moot point

Sponsored