Ford's tax credit availability

[supertramp]

According to this link:

https://evadoption.com/ev-sales/federal-ev-tax-credit-phase-out-tracker-by-automaker/

Ford still eligible for 75K+ of federal tax credits. Do I understand correctly that means all the Mach E(s) produced/sold this year and the next year will get the credit guaranteed? I believe Ford doesn't sell any other EVs at the moment? Except maybe upcoming Bronco?

What do you guys know/think?

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[RyZt]

Do I understand correctly that means all the Mach E(s) produced/sold this year and the next year will get the credit guaranteed?

I'm 99.9% certain that any Mach E purchased next year will be eligible for the full credit. I wouldn't consider it "guaranteed" though. For example, laws could change.

I don't think Ford will hit 200K any time next year. Even if Ford does, the credit phases out "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"

I believe Ford doesn't sell any other EVs at the moment?

Ford sells Fusion PHEV, Escape PHEV, Aviator PHEV. https://www.fueleconomy.gov/feg/taxevb.shtml

Except maybe upcoming Bronco?

Bronco is neither PHEV nor BEV.

 

[supertramp]

Sorry, I meant upcoming (when?) F-150

https://www.ford.com/buy-site-wide-content/overlays/all-electric-f-150-video/

Interesting, I am so off of this field that I didn't know PHEVs are eligible for tax credit.

 

[SnBGC]

Don't forget about the Transit van. They had a 2021 expected delivery but maybe those were pushed back as well? I will need to check. I believe there are a lot of fleet owners lined up to buy those things so demand is certainly there for it. Ford could hit that 200k number quicker than expected if those start shipping soon...

 

[s7davis]

Do not forget the number of vehicle sold only count if sold in USA so doesn’t matter how many are sold in Canada, Europe, or even in Mexico

 

[ChasingCoral]

Don't forget about the Transit van. They had a 2021 expected delivery but maybe those were pushed back as well? I will need to check. I believe there are a lot of fleet owners lined up to buy those things so demand is certainly there for it. Ford could hit that 200k number quicker than expected if those start shipping soon...

I expect 2021 is safe. 2022 will be another matter.

 

[SnBGC]

I expect 2021 is safe. 2022 will be another matter.

For sure. The best scenario is for Ford to suddenly begin hemorrhaging Mach E & Transit EVs along with the Excape PHEV. The rebate isn't limited to 200k vehicles.....that just triggers the phase down process. If Ford was able to time it so the 200,001th US vehicle would deliver on the first day of the quarter then that would be ideal. Ford could then deliver as many qualifying vehicles as they can produce for the remainder of that quarter and they all would still be eligible for the full tax credit amount.

 

[timbop]

For sure. The best scenario is for Ford to suddenly begin hemorrhaging Mach E & Transit EVs along with the Excape PHEV. The rebate isn't limited to 200k vehicles.....that just triggers the phase down process. If Ford was able to time it so the 200,001th US vehicle would deliver on the first day of the quarter then that would be ideal. Ford could then deliver as many qualifying vehicles as they can produce for the remainder of that quarter and they all would still be eligible for the full tax credit amount.

Actually, there is a grace period. So if Ford hit the 200,000 car on Jan 1, the full $7500 would apply until the end of the quarter after the quarter where they hit it. So, in the Jan 1 scenario, all cars sold before July 1st would be eligible for $7500, between July 1st and Dec 31st would get $3750, and Jan 1 to June 30 THE FOLLOWING year would get $1875

 

[Blinkin]

Actually, there is a grace period. So if Ford hit the 200,000 car on Jan 1, the full $7500 would apply until the end of the quarter after the quarter where they hit it. So, in the Jan 1 scenario, all cars sold before July 1st would be eligible for $7500, between July 1st and Dec 31st would get $3750, and Jan 1 to June 30 THE FOLLOWING year would get $1875

I've often thought that was the plan behind Ford having a relatively unappealing and low volume EV (Focus BEV, with apologies to those of you who have one) for so long, but then announcing and launching 3 high really good EVs in high volume segments close to each other. If you time it right you can get a huge number of units sold with tax credits, because it's technically unlimited during that window after you hit 200k. They might be able to make a really big splash in EV market share if the timing all works out.

 

[SnBGC]

Actually, there is a grace period. So if Ford hit the 200,000 car on Jan 1, the full $7500 would apply until the end of the quarter after the quarter where they hit it. So, in the Jan 1 scenario, all cars sold before July 1st would be eligible for $7500, between July 1st and Dec 31st would get $3750, and Jan 1 to June 30 THE FOLLOWING year would get $1875

The IRS updated their website in April of 2020. That phase out schedule may have changed. Not sure because I don't remember what it might have been before then.

If I am reading this correctly, then your scenario above would play out as Q1 (Jan-March at 100%). Q2 (April-June) and Q3 (July-Sept) would both be at 50%. Q4 (Oct-Dec) and Q1 the following year would be 25%. Q2 the following year would be zero.

Here is the info from the IRS website.

Qualified Plug-In Electric Drive Motor Vehicle Credit (IRC 30D) Phase Out
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. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period.

 

[RyZt]

The IRS updated their website in April of 2020. That phase out schedule may have changed. Not sure because I don't remember what it might have been before then.

If I am reading this correctly, then your scenario above would play out as Q1 (Jan-March at 100%). Q2 (April-June) and Q3 (July-Sept) would both be at 50%. Q4 (Oct-Dec) and Q1 the following year would be 25%. Q2 the following year would be zero.

Here is the info from the IRS website.

Qualified Plug-In Electric Drive Motor Vehicle Credit (IRC 30D) Phase Out
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. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period.

I think @timbop's example matches the IRS text you quoted. Your example doesn't. Emphasize on "second". The phaseout doesn't begin the quarter after quota is reached. It begins the second quarter after.

> 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

 

[SnBGC]

I think @timbop's example matches the IRS text you quoted. Your example doesn't. Emphasize on "second". The phaseout doesn't begin the quarter after quota is reached. It begins the second quarter after.

> 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

Oh okay. I see what you guys are saying.
Thanks

 

[Regularmache]

Just for the record, when filing for the BEV Tax Credit, it's when the vehicle is serviceable as to when you Credit is triggered. So if it's built the last day of the Qtr, you can apply the credit in place at that time. The ruling uses this example as to defining in service.
" Regs. Sec. 1.167(a)-(11)(e)(1)(i) provides that property is considered to be placed in service when it is “first placed in a condition or state of readiness and availability for a specifically assigned function” (emphasis added). Functionality is confirmed and deemed ready for use at the factory after it's checkout prior to staging.

 

[Badger_Prof]

Just for the record, when filing for the BEV Tax Credit, it's when the vehicle is serviceable as to when you Credit is triggered. So if it's built the last day of the Qtr, you can apply the credit in place at that time. The ruling uses this example as to defining in service.
" Regs. Sec. 1.167(a)-(11)(e)(1)(i) provides that property is considered to be placed in service when it is “first placed in a condition or state of readiness and availability for a specifically assigned function” (emphasis added). Functionality is confirmed and deemed ready for use at the factory after it's checkout prior to staging.

But it would not be available for the "specifically assigned function" (i.e., for use by the impending owner).

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