Ford Hits 188,596 EV Sales Through End of Q2; $7,500 Tax Credit Will Remain Until December 31, 2022

[ARK]

Looks like the IRS recently updated their website and Ford has sold 188,596 EVs and plug-in hybrids in the US through the end of Q2 2022 (June 30, 2022). See IRS EV tax credit page.

This means Ford will definitely keep the $7,500 tax credit through December 31, 2022, as was expected but not certain.

And then of course the new law kicks in January 1, 2023. The only portion of the new law applicable to the Mach-E in 2022 is the requirement that an eligible vehicle be manufactured in North America, as all Mach-Es for sale in the USA are, being built in Mexico.

Interestingly, Ford also apparently sold 19,004 EVs and plug-in hybrids in Q2 in the US, the most yet for them by a significant amount.

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[TalkToErik]

Awesome news! Come on early November delivery!

 

[available_username2]

I think the new law applies unless you had a binding order contract or whatever the language was, before the law was signed. So the income limits now apply.

 

[Maquis]

I think the new law applies unless you had a binding order contract or whatever the language was, before the law was signed. So the income limits now apply.

That’s not true for 2022 deliveries.

 

[Anvina72]

I think the new law applies unless you had a binding order contract or whatever the language was, before the law was signed. So the income limits now apply.

No income limits until Jan 1st 2023.. IRS did provide clarification.. Only thing that changed effective 16th Aug is car has to be built in North America for it to be eligible for Tax Credit.

 

[quitzmme]

Thanks for sharing this. But according to the IRS, If Ford reaches 200k total ev sales in Q3, does it not start phasing out in Q4?

```The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. ```


Toyota reached 200k total EV sales in July and they start phasing out on Oct. 1. If Ford reaches 200k EV sales in September, from what I read it should start phasing out in q4 as well. Ford only needs 12k more sales to reach the 200k target and they sold 19k in the past quarter. It's possible that Ford will reach 200k sales in September and then the credit becomes $3750 for q4.

 

[Maquis]

Thanks for sharing this. But according to the IRS, If Ford reaches 200k total ev sales in Q3, does it not start phasing out in Q4?

```The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. ```


Toyota reached 200k total EV sales in July and they start phasing out on Oct. 1. If Ford reaches 200k EV sales in September, from what I read it should start phasing out in q4 as well. Ford only needs 12k more sales to reach the 200k target and they sold 19k in the past quarter. It's possible that Ford will reach 200k sales in September and then the credit becomes $3750 for q4.

The phase out period begins the second quarter after the 200K threshold is reached. Re-read the first sentence you quoted carefully.

 

[quitzmme]

The phase out period begins the second quarter after the 200K threshold is reached. Re-read the first sentence you quoted carefully.

ah so if ford reaches 200k sales in September, q3 is not considered as the first quarter after the 200k threshold is reached, q4 is.

Just googled the Toyota sales and they reached 200k sales in Q2, not Q3. And people who bought a Toyota q3 still qualify for the full $7500 credit.

That makes sense, thanks for the clarification.

 

[ARK]

ah so if ford reaches 200k sales in September, q3 is not considered as the first quarter after the 200k threshold is reached, q4 is.

Just googled the Toyota sales and they reached 200k sales in Q2, not Q3. And people who bought a Toyota q3 still qualify for the full $7500 credit.

That makes sense, thanks for the clarification.

Exactly, which is why assuming Ford hits 200,000 EV sales today, the full $7,500 is in effect for the remainder of this quarter (Q3), and all of next quarter (Q4).

 

[bcaceres]

The new law went into effect when Biden signed it. The old law is only applicable if you have a signed binding contract for purchase dated previous to Biden signing the law.

The new law immediately disqualified Kia EV's from the tax credit as well as the upcoming Nissan Ariya (built in Japan). Ford vehicles are built in North America so they get the tax credit subject to income limits and price limits. The battery component and mineral sourcing requirements for the new law do not apply until January 1, 2023 because the manufacturers have until later this year to report their battery component and mineral sourcing to the US government.

A *better* way to have implemented the new law would have made it take affect *AFTER* the first 200K electric vehicles had been sold, but such is Congress -- they don't always do the smart thing.

 

[ARK]

The new law went into effect when Biden signed it. The old law is only applicable if you have a signed binding contract for purchase dated previous to Biden signing the law.

The new law immediately disqualified Kia EV's from the tax credit as well as the upcoming Nissan Ariya (built in Japan). Ford vehicles are built in North America so they get the tax credit subject to income limits and price limits. The battery component and mineral sourcing requirements for the new law do not apply until January 1, 2023 because the manufacturers have until later this year to report their battery component and mineral sourcing to the US government.

A *better* way to have implemented the new law would have made it take affect *AFTER* the first 200K electric vehicles had been sold, but such is Congress -- they don't always do the smart thing.

Agreed Congress really made the role out of the new law as complicated as possible.

However, for the Mach-E, the new law is functionally kicking in after the 200,000 units are sold. It's the new EV startups that really got hosed by the change, putting new requirements next year that they will be unable to meet when they are still far away from 200,000 EV sales.

 

[bcaceres]

Agreed Congress really made the role out of the new law as complicated as possible.

However, for the Mach-E, the new law is functionally kicking in after the 200,000 units are sold. It's the new EV startups that really got hosed by the change, putting new requirements next year that they will be unable to meet when they are still far away from 200,000 EV sales.

Unless of course you are single and make more than $150K per year or married and make more than $300K per year.

Best info I have found is in the big red block on this page:

https://www.fueleconomy.gov/feg/taxevb.shtml

 

[ARK]

Unless of course you are single and make more than $150K per year or married and make more than $300K per year.

Best info I have found is in the big red block on this page:

https://www.fueleconomy.gov/feg/taxevb.shtml

My understanding is the income limits don't kick in until 2023, is that incorrect?

 

[Maquis]

The new law went into effect when Biden signed it. The old law is only applicable if you have a signed binding contract for purchase dated previous to Biden signing the law.

The new law immediately disqualified Kia EV's from the tax credit as well as the upcoming Nissan Ariya (built in Japan). Ford vehicles are built in North America so they get the tax credit subject to income limits and price limits. The battery component and mineral sourcing requirements for the new law do not apply until January 1, 2023 because the manufacturers have until later this year to report their battery component and mineral sourcing to the US government.

A *better* way to have implemented the new law would have made it take affect *AFTER* the first 200K electric vehicles had been sold, but such is Congress -- they don't always do the smart thing.

Absolutely NOTHING in the new bill, other than North American final assembly, applies before January 1, 2023.

The “binding contract” provision only applies if your car isn’t delivered until next year.

 

[bcaceres]

Absolutely NOTHING in the new bill, other than North American final assembly, applies before January 1, 2023.

The “binding contract” provision only applies if your car isn’t delivered until next year.

That is interesting -- I think there has been some misreporting on it then. I tried reading the actual text of the law, but only 50% was possible to follow -- most of it required trying to cross-reference the existing law and figure out what a paragraph said by striking a word or set of words from it or adding a word somewhere since the new law is more a less a "diff" that is applied to the old law.

I just read that the 200K limit does matter this year for the North American built cars to still get a tax credit and the lifting of the 200K limit does not happen until January 1st. That is going to have an even more chilling effect on EV sales if that is the case since it is not adding any possible vehicles to the tax credit from Chevy and Tesla while eliminating a ton of them.

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