Anyone Else Place Last-Minute EV Orders to Lock In $7,500 Tax Credit?

[luckie]

The intent of the original tax credit was to promote early adoption of EVs.

Sure seems like the intent of the new tax credit has shifted to promoting EVs made in America...

I'm all for "on-shoring" manufacturing but qualifying for the new tax credits seems uncertain at best, even if you're not eliminated by the income caps...

I do think the late pandemic near collapse(?) of the world supply chain, then the Ukraine war providing another impactful example, e.g. WTF all wiring harnesses for cars are from there?, has temporarily made more people (even politicians) interested in having critical things made closer to home, and see that as a national security issue as well as economic and climate security.

Yep, feels like "on-shoring" is the big part and particularly aimed at bringing future battery production as close to North America as much as possible.

I believe the income caps still do not impact 95% of US citizens, since salary of $150k and a couple making $300k rises perhaps even above the top 5% wealthy of USA, heck likely above top 1% income level in the world.

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[ridgebackpilot]

I believe the income caps still do not impact 95% of US citizens, since salary of $150k and a couple making $300k rises perhaps even above the top 5% wealthy of USA, heck likely above top 1% income level in the world.

Perhaps you're right, but among MME buyers (and buyers of other EVs) I'd guess income levels are higher than the overall population.

If the goal is to persuade ordinary people with average income to buy EVs, it seems like the best way to do that would be to bring the prices down. The vehicle price caps to qualify for the new tax credits should help. And over time, EV prices surely will come down. New technology is always more expensive at first!

 

[machefan22]

Schaumburg Ford in Northeast Illinois says they won't do a binding purchase agreement. Has anyone else come across a dealer that won't? They referenced a Shelby GT500 that crashed off a transport before delivery and the buyer had all the paperwork and purchase completed, ever since that, they said they wouldn't do anything until the vehicle arrives at their lot.

The same dealer said they won't accept X-plan pricing on the Mach-E either. Says Ford has set the pricing on MME and Lightning online orders. Can dealers not honor X-plan pricing?

 

[ridgebackpilot]

Schaumburg Ford in Northeast Illinois says they won't do a binding purchase agreement. Has anyone else come across a dealer that won't? They referenced a Shelby GT500 that crashed off a transport before delivery and the buyer had all the paperwork and purchase completed, ever since that, they said they wouldn't do anything until the vehicle arrives at their lot.

The same dealer said they won't accept X-plan pricing on the Mach-E either. Says Ford has set the pricing on MME and Lightning online orders. Can dealers not honor X-plan pricing?

Sounds like a traditional, conservative dealer that just doesn't want to help out their customers. If a new car headed to their dealership is wrecked, they're going to be in the same boat whether a customer has signed a purchase agreement or not! Their insurance (or the shipping company's) will cover the cost of the wrecked new car and they'll get another from Ford.

Dealers have the right to accept discounted pricing or not. X-Plan pricing is printed right on the dealer invoice, so it's no mystery. The dealer from whom I bought my GTPE at first didn't want to offer it but eventually came around. I'd suggest either finding a new dealer or escalating your request to their General Manager.

 

[Nemy]

I believe the income caps still do not impact 95% of US citizens, since salary of $150k and a couple making $300k rises perhaps even above the top 5% wealthy of USA, heck likely above top 1% income level in the world.

I was curious so I googled it and US income disparity is always greater than anyone realizes. $150k isn't even top 10%. Though I agree that MME buyers probably have more disposable income than most... At least I would hope so for someone buying a 50k car...

https://www.investopedia.com/personal-finance/how-much-income-puts-you-top-1-5-10/

 

[MrTact]

Schaumburg Ford in Northeast Illinois says they won't do a binding purchase agreement. Has anyone else come across a dealer that won't? They referenced a Shelby GT500 that crashed off a transport before delivery and the buyer had all the paperwork and purchase completed, ever since that, they said they wouldn't do anything until the vehicle arrives at their lot.

The same dealer said they won't accept X-plan pricing on the Mach-E either. Says Ford has set the pricing on MME and Lightning online orders. Can dealers not honor X-plan pricing?

Was just informed by my dealership that they will not go to contract until the vehicle is delivered

Don't have a build date as yet, so I feel like there's a good chance my car won't get delivered this year, meaning I will more than likely get screwed out of the federal tax credit entirely

 

[NJ_MachE]

I was curious so I googled it and US income disparity is always greater than anyone realizes. $150k isn't even top 10%. Though I agree that MME buyers probably have more disposable income than most... At least I would hope so for someone buying a 50k car...

https://www.investopedia.com/personal-finance/how-much-income-puts-you-top-1-5-10/

If you look at household income, which for EV tax credit eligibility is probably a better income measurement to use compared to solely looking at wage income, the 300k limit for married filing jointly puts you in the top 4%

And that's before deductions that often significantly reduce taxable income. So it seems that at most, 4% of Americans become completely ineligible for the new EV credit.

Edit: woops, forgot to provide link to household income percentile calculator-- https://dqydj.com/household-income-percentile-calculator/

 

[WSoxFan22]

Also converted my Fisker Ocean to binding.

You guys should really stop doing that. Fisker is not eligible for a 2021 tax credit.

 

[ridgebackpilot]

You guys should really stop doing that. Fisker is not eligible for a 2021 tax credit.

Who said anything about a 2021 tax credit?

Anyone with “written binding contact to purchase” a Fisker Ocean signed before today should be eligible for a $7,500 tax credit under the “old” rules. How those are implemented going forward remains to be seen.

 

[WSoxFan22]

Who said anything about a 2021 tax credit?

Anyone with “written binding contact to purchase” a Fisker Ocean signed before today should be eligible for a $7,500 tax credit under the “old” rules. How those are implemented going forward remains to be seen.

Sorry I meant 2022.

The $100 deposit isn't a "binding contract" based on how binding contract has been determined/defined by the IRS in the past.

I don't believe the government/IRS is going to change that interpretation for cars, but time will tell.

 

[Nemy]

If you look at household income, which for EV tax credit eligibility is probably a better income measurement to use compared to solely looking at wage income, the 300k limit for married filing jointly puts you in the top 4%

And that's before deductions that often significantly reduce taxable income. So it seems that at most, 4% of Americans become completely ineligible for the new EV credit.

Edit: woops, forgot to provide link to household income percentile calculator-- https://dqydj.com/household-income-percentile-calculator/

True. I guess it did win Top Gear's best family car award.

The way it's worded too allows a workaround if one partner makes less than 150k. You'd probably have to take a hit filing separately but it might be worth it for $7500.

 

[ridgebackpilot]

Sorry I meant 2022.

The $100 deposit isn't a "binding contract" based on how binding contract has been determined/defined by the IRS in the past.

I don't believe the government/IRS is going to change that interpretation for cars, but time will tell.

I suppose time will tell just how "firm" this order is and whether Fisker's written contact satisfies the statutory requirement for a "written binding contract to purchase" an EV...

 

[dmastro]

I just got off a long call with my dealer. They're been working closely with their lawyers and the California New Car Dealers Association for the last few weeks.

They've confirmed what we all know - effective today (with Biden's signature about 30 minutes ago while I was on the phone with them) the existing tax credit is terminated.

They have been advised they cannot issue a binding purchase agreement for a car that they don't have in stock. Perhaps it's because they're dealership franchise... maybe direct sellers like Rivian have better ability to navigate the purchase conundrum.

So now that I'm down to the last few weeks of waiting for a car I ordered nearly a year ago, the rug has been pulled out from me. The federal tax credit was a major factor in my decision to purchase, so I need to decide if I'm going to go through with it or walk away and buy something else.

I can't put in a 2023 order because I won't qualify under the income restrictions... so damned if I do, damned if I don't...

 

[ridgebackpilot]

I just got off a long call with my dealer. They're been working closely with their lawyers and the California New Car Dealers Association for the last few weeks.

They've confirmed what we all know - effective today (with Biden's signature about 30 minutes ago while I was on the phone with them) the existing tax credit is terminated.

They have been advised they cannot issue a binding purchase agreement for a car that they don't have in stock. Perhaps it's because they're dealership franchise... maybe direct sellers like Rivian have better ability to navigate the purchase conundrum.

So now that I'm down to the last few weeks of waiting for a car I ordered nearly a year ago, the rug has been pulled out from me. The federal tax credit was a major factor in my decision to purchase, so I need to decide if I'm going to go through with it or walk away and buy something else.

I can't put in a 2023 order because I won't qualify under the income restrictions... so damned if I do, damned if I don't...

You are NOT damned! If you take delivery of your MME prior to year's end, you will get the $7,500 Federal tax credit!

The existing tax credit is NOT "terminated" by the new law just signed by the President. The new rule for final assembly in North America takes effect today, but MME's pass that test since they're assembled in Mexico.

The other new rules to obtain the tax credit don't enter into effect until later, either Jan. 1, 2023 or whenever the government publishes implementing regulations.

If you ordered your MME in 2021, you'll likely take delivery before the end of 2022, so you should have no problem claiming the $7,500 tax under the "old" rules.

 

[dmastro]

You are NOT damned! If you take delivery of your MME prior to year's end, you will get the $7,500 Federal tax credit!

The existing tax credit is NOT "terminated" by the new law just signed by the President. The new rule for final assembly in North America takes effect today, but MME's pass that test since they're assembled in Mexico.

The other new rules to obtain the tax credit don't enter into effect until later, either Jan. 1, 2023 or whenever the government publishes implementing regulations.

If you ordered your MME in 2021, you'll likely take delivery before the end of 2022, so you should receive the $7,500 tax credit.

Do you have an authoritative source for this? Everything I've read, along with the guidance from my dealer's attorney and the California New Car Dealer's Association says that effective today, the tax credit no longer applies for the remainder of 2022 without a binding purchase agreement (which Ford does not have). Beginning January 1, 2023 the new program will be available.

I hope you're right, but I need proof.

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