116,937 Ford EV's Accounted For On Tax Credit?

Dkaar

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I just pulled the numbers and it shows Ford has sold 116,937 EV cars through 2019. Wouldn't that indicate 83,063 Mach E's would get the tax credit, assuming no other EV models are sold in 2020? I am trying to time the reservation on the GT and am wondering if it is possible to miss out on the full $7,500 with a 2021 delivery date. Thoughts?

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benboy12

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I think you will be fine. Looks like Ford only sold around 7500 last year. First Models won’t deliver until Q4. Let’s say they can get 20k delivered in Q4 plus the 7500 others to match 2019 sales. That still gives you 60k-ish to go for all of 2021.
 

timbop

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Agreed, you'll be fine. They'll sell some more hybrids by the time the Mach E goes on sale (probably in the 130k-150k range), but don't forget a huge chunk of the 50K 2021 Mach E's will be sold overseas so won't count against the US federal threshold. There is also the fact that the full rebate applies until the end of the subsequent quarter in which they hit 200k. Finally, the GT's will be part of that 50K first year Mach E count.
 

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If the bet was O/U Q2 2022 for the full 7,500, I’d go with the over.
 

dbsb3233

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The number I show for Ford for year-end 2019 is 120,795.

https://www.irs.gov/businesses/irc-30d-plug-in-electric-drive-motor-vehicle-credit-quarterly-sales

PHEVs count toward the quota too, and the Escape PHEV is due out this year. And I think they're still selling the Fusion PHEV. However, some reports are there's only about 20,000 of the 50,000 Mach-e's allotted to the US for model year 2021 (which runs roughly to 3Q2021).

And then there's the effect of the virus recession that will put a serious damper on all auto sales this year.

Between all 3 vehicles, I don't expect more than maybe 40,000 between now and 3Q2021. That's still only 160k total. That's roughly when the F-150 EV is due out, and the 2022 Mach-e. And the economy (hopefully) rebounded. Things could start to accelerate then. My guess is that Ford will hit the 200k mark around 1Q2022. And the $7500 phase-out starting 3Q2022. Purely my guess though.
 

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The number I show for Ford for year-end 2019 is 120,795.

https://www.irs.gov/businesses/irc-30d-plug-in-electric-drive-motor-vehicle-credit-quarterly-sales

PHEVs count toward the quota too, and the Escape PHEV is due out this year. And I think they're still selling the Fusion PHEV. However, some reports are there's only about 20,000 of the 50,000 Mach-e's allotted to the US for model year 2021 (which runs roughly to 3Q2021).

And then there's the effect of the virus recession that will put a serious damper on all auto sales this year.

Between all 3 vehicles, I don't expect more than maybe 40,000 between now and 3Q2021. That's still only 160k total. That's roughly when the F-150 EV is due out, and the 2022 Mach-e. And the economy (hopefully) rebounded. Things could start to accelerate then. My guess is that Ford will hit the 200k mark around 1Q2022. And the $7500 phase-out starting 3Q2022. Purely my guess though.
And this is actually very good news for those on the fence for the 2021. Even if you wait for the 2022 model year, the full tax credit may still be available. By that point any early production hiccups would be sorted out and there would be further refinements. It might even be worth it to some to get a more mature product, even at the expense of half of the tax credit. Even then it doesn’t sound like the tax credit is going to be an issue in the near term. Q2’22 is a long way out.
 

dbsb3233

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And this is actually very good news for those on the fence for the 2021. Even if you wait for the 2022 model year, the full tax credit may still be available. By that point any early production hiccups would be sorted out and there would be further refinements. It might even be worth it to some to get a more mature product, even at the expense of half of the tax credit. Even then it doesn’t sound like the tax credit is going to be an issue in the near term. Q2’22 is a long way out.
That's the way I'm leaning now too. Especially since I really don't need a new car right now. I just didn't want to miss out on the $7500.

In my case, I would lose $1500 in state tax credits by waiting though. Ours drops from $4000 in 2020 to $2500 in 2021 and 2022. But I'm not sure I was gonna be able to get a Mach-e in 2020 anyway. My res# in is the 29,000's. And I'm assuming there will be some virus delays pushing things back. So I think I'll just get in the mindset of forgetting about the $4000 state credit. (And honestly, it'll depend on what the economy and stock market does as to whether I buy the vehicle at all now.)
 

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The only issue I foresee with the Q2 2022 number is that the current administration is very much against electric cars or anything considered "green". Assuming post-election congress and the administration are still anti-EV (and I think this highly likely), there is a possibility that all of the green tax incentives could be rescinded as "unaffordable" given the huge debt racked up by the covid19 stimulus.
 

pbojanoski

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The only issue I foresee with the Q2 2022 number is that the current administration is very much against electric cars or anything considered "green". Assuming post-election congress and the administration are still anti-EV (and I think this highly likely), there is a possibility that all of the green tax incentives could be rescinded as "unaffordable" given the huge debt racked up by the covid19 stimulus.
While anything is possible, it is the Federal government we're talking about, I highly doubt that would be the case. Spending and programs don't go away normally in Washington and I would think it is more likely they would increase stimulus (including for EV's) than any possibility of reducing economic incentives for at least a year. Depending on how quickly this economy gets moving, we could be looking at a long road back to normal and a lot of pain economically.

And while they didn't expand the current tax incentives for EV's last year, the current administration didn't reduce them either. I don't get the sense at all that they are "against electric cars or anything considered green". (Uh oh, did I just light a fuse?) I think they do take into account what the affect on the economy will be, but that doesn't make them anti-green.
 

dbsb3233

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there is a possibility that all of the green tax incentives could be rescinded as "unaffordable" given the huge debt racked up by the covid19 stimulus.
Always possible (in any year). But I'm not expecting it. Fiscal restraint has totally gone out the window for the last decade+ (both administrations). And when we have a split govt, the "tie" usually gets broken by giving BOTH sides the spending/tax breaks that they want. So up and up the debt goes.

Plus, those tax credits automatically sunset at 200k vehicles anyway, so that kinda gives the (few) budget hawks left some cover by saying "well, they're ending soon anyway". And since Ford is the ultimate American manufacturer, if Congress did end the credits, I'd be surprised if they did it before Ford got full credit. Might be a different matter after that when it's nothing but foreign automakers though. That's a little harder to justify (since we all know it's really the manufacturers that benefit most from the tax credits, as they just build them into their pricing).
 

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The only issue I foresee with the Q2 2022 number is that the current administration is very much against electric cars or anything considered "green". Assuming post-election congress and the administration are still anti-EV (and I think this highly likely), there is a possibility that all of the green tax incentives could be rescinded as "unaffordable" given the huge debt racked up by the covid19 stimulus.
I’m happy to take the tax credit if available but the reality is that the manufacturer receives the majority of the benefit. Regardless of the stance on EVs, if EV buyers are just facilitating the transfer of money from taxpayers to the manufacturers, optically that’s not the best public policy in this environment- especially considering EV buying at this point is still more on a “want” vs “need” basis.
If the tax credit gets rescinded, and that’s a big if, guess what happens? Ford (and tax credit eligible manufacturers) will have to drop the price to stay competitive. Look at the Bolt, for starters, selling at prices far less than MSRP.
Does Ford actually think they stand a chance selling the base MME for 44K, if the tax credit didn’t exist? I hope not.

If anything, the after tax credit price is probably a fair market price when comparing against the Model Y.
And to be honest if the tax credit goes away, all else being equal, and without an MME price drop, I would just get a Model Y (and I think many would). The difference between that and the current state is that my fellow Americans aren’t funding my joyrides.

So, tax credit or not, my opinion is that the price of the MME is, and will be basically dictated by the direct competition- primarily the model Y but also the 3. With VW, Volvo, Polestar, etc coming on board as well this year, the competitive pressure will be even higher. Good time to be an EV buyer, in the current state of things- but don’t worry about tomorrow.
 

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That's the way I'm leaning now too. Especially since I really don't need a new car right now. I just didn't want to miss out on the $7500.

In my case, I would lose $1500 in state tax credits by waiting though. Ours drops from $4000 in 2020 to $2500 in 2021 and 2022. But I'm not sure I was gonna be able to get a Mach-e in 2020 anyway. My res# in is the 29,000's. And I'm assuming there will be some virus delays pushing things back. So I think I'll just get in the mindset of forgetting about the $4000 state credit. (And honestly, it'll depend on what the economy and stock market does as to whether I buy the vehicle at all now.)
If you ask me... $1500 is a bargain premium to pay, for production to settle in, bugs to be ironed out, real world range and performance data, and for early adopters to confirm it’s not a lemon (not that it would be). Heck, if the cars aren’t moving as fast as they want, dealers may even be open to negotiating on price at that point.
 

dbsb3233

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I've often wondered what the price of the Mach-e would be if the $7500 credit didn't exist. It's really hard to say whether we'd see a full $7500 price drop. I'm guessing because it's a brand new, exciting, breakthough vehicle, the price wouldn't drop that much. At first, anyway. We are seeing that much discount on the Bolt, but it's been around for a while and doesn't have the "buzz" boost that the Mach-e enjoys.

But by year 2 or 3, they probably won't enjoy that boost anymore. And Ford will probably have to discount the price more like Chevy is now with the Bolt. (Or at least the did in January. I haven't looked since.)
 

dbsb3233

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If you ask me... $1500 is a bargain premium to pay, for production to settle in, bugs to be ironed out, real world range and performance data, and for early adopters to confirm it’s not a lemon (not that it would be). Heck, if the cars aren’t moving as fast as they want, dealers may even be open to negotiating on price at that point.
I had that thought too. Plus there will be other new BEVs from other manufacturers to compete head-to-head against in a few years. That competition could drive the price down. (Hopefully that doesn't mean any scrimping with what Ford puts into the vehicle though.)
 

timbop

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Absolutely the tax credits are a way to subsidize manufacturers' development of EV's as an incentive to do so. One could argue their implementation versus a direct incentive, but the fact of the matter is that it incentivizes manufacturers not just to spend on R&D for EVs but to ultimately SELL them. If what they build is crap cars that no one buys, the manufacturers are left holding the R&D bag. It's an imperfect solution, but far better than the government deciding whose designs are "best" - the market still decides who gets reimbursed and who doesn't. Companies can't just take a bunch of free money, produce nothing, and declare bankruptcy (Solindra anyone).

Nonetheless, that's not the point I am addressing: the fact is that if I buy a Mach E in January 2021 I will put $7500 out of my pocket that I am hoping to get back as a tax refund in 2022. I am essentially paying Ford the incentive with the expectation of being reimbursed by Uncle Sam. If in the interim the incentives are changed, I can neither do anything about it nor "undo" my purchase without significant penalty. That is the only point I intended to make. And without getting too political, if you pay attention it is clear that there is a bias toward the status quo regarding legacy fossil fuels.
 
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