Inflation Reduction Act drastically cuts EV, plug-in hybrid models eligible for federal tax credit

[jason330i]

https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d

posted in another thread, but posting here as well.

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[s7davis]

In the bill their is a stipulation for transition period. Which like mentioned grandfathers you into the old tax credit eligibility. Which is why a lot of EV companies were creating these purchase agreements. Hell Vinfast took a step further and said if IRS does not give the credit to you they will give you a 7500 rebate on cost of vehicle lol

Ps you will have to show them it was not because of your liability or snything.

 

[generaltso]

I just posted in the other tax incentive thread, but I spoke with my dealer this afternoon. They've been advised by their attorneys and the California New Car Dealers Association that cars sold today through the end of 2022 are not eligible - the current tax incentive is discontinued immediately with Biden's signature.

Your dealer and whoever is advising them is dead wrong. This is directly from the IRS:

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022

If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold).

 

[daemonic3]

The transition language in the bill grandfathers transactions or binding purchase contracts entered into before today into the "old" incentive program.

I hear ya, David, but looks like we're both over the income cap and I'm looking for explicit language on if "old" incentive program refers to just the $7500 with no sourcing requirements, or also includes no income requirements.

BTW was it Future Roseville that you were talking to about the rebate guidance?

 

[Spectre]

I just posted in the other tax incentive thread, but I spoke with my dealer this afternoon. They've been advised by their attorneys and the California New Car Dealers Association that cars sold today through the end of 2022 are not eligible - the current tax incentive is discontinued immediately with Biden's signature.

They do not have a workaround in the form of a "binding contract to purchase" because they cannot sell a car they don't have in stock. (Maybe Rivian, Fisker, etc have a workaround being a direct seller) - but you will have needed to have that in place by yesterday.

So for those of us who ordered but have not completed the purchase, we've apparently had the rug pulled out from under us.

Maybe there will be some other interpretation or clarification from the IRS in the coming weeks or months, but not in time to inform my decision to go through with my purchase. I'm not willing to just risk it, so if I decide to purchase it will be assuming no tax credit, and hoping for some kind of miracle.

If true, this sucks for a lot of people. I had asked my dealer earlier this week for a binding contract but they said it was not something they could do based on the reason you mentioned. They said they aren’t even sure what was happening yet though and were just waiting for guidance from Ford. Maybe I’ll check with them again to validate what you found. Others can chime in too if they’ve heard the same from their dealers.

 

[awiseman5]

You've been putting in WORK good sir. Where is it confirmed that the income cap won't hit until next year though? Is that basically wrapped up in "the rules in effect before" piece?

 

[dmastro]

Your dealer and whoever is advising them is dead wrong. This is directly from the IRS:

Vehicles Purchased and Delivered between August 16, 2022 and December 31, 2022

If you purchase and take possession of a qualifying electric vehicle after August 16, 2022 and before January 1, 2023, aside from the final assembly requirement, the rules in effect before the enactment of the Inflation Reduction Act for the EV credit apply (including those involving the manufacturing caps on vehicles sold).

I just posted that in the other thread. And as I read it, I agree with you. This is what happens when information is emerging quickly.

My interpretation is that cars sold between today and the end of the year still qualify for the "old" incentive program EXCEPT that the new final assembly requirement applies.... your interpretation as well?

 

[generaltso]

- Specific requirements for battery minerals and battery assembly content start on 1/1/24

What's not clear (at least to me):
- How mineral and battery assembly content will be handled in 2023. It seems like this is subject to SoT guidance which will be issued by 1/1/23?

The specific requirements for battery minerals and battery components go into effect 1/1/2023, but the percentage goes up in 2024 (and subsequent years). It's the complete prohibition of any components from an "entity of concern" (like China) that doesn't go into effect until 1/1/2024.

 

[dmastro]

I hear ya, David, but looks like we're both over the income cap and I'm looking for explicit language on if "old" incentive program refers to just the $7500 with no sourcing requirements, or also includes no income requirements.

BTW was it Future Roseville that you were talking to about the rebate guidance?

I'm working with Folsom Lake. The income cap is part of the new program that is effective 1/1/23 - it's in the bill but I can't remember the section and don't have the will to look it up again.

 

[generaltso]

You've been putting in WORK good sir. Where is it confirmed that the income cap won't hit until next year though? Is that basically wrapped up in "the rules in effect before" piece?

Yes.

My interpretation is that cars sold between today and the end of the year still qualify for the "old" incentive program EXCEPT that the new final assembly requirement applies.... your interpretation as well?

Yes.

 

[Anvina72]

I just posted that in the other thread. And as I read it, I agree with you. This is what happens when information is emerging quickly.

My interpretation is that cars sold between today and the end of the year still qualify for the "old" incentive program EXCEPT that the new final assembly requirement applies.... your interpretation as well?

Looks like folks who will their Mach E before Dec 2022 will get full $7500. this is my interpretation from what is posted in IRS site.

 

[Spectre]

I just posted that in the other thread. And as I read it, I agree with you. This is what happens when information is emerging quickly.

My interpretation is that cars sold between today and the end of the year still qualify for the "old" incentive program EXCEPT that the new final assembly requirement applies.... your interpretation as well?

Yeah that’s how I’m interpreting it. I’m glad to see this directly on the IRS website so it’s indisputable!

 

[daemonic3]

I'm working with Folsom Lake. The income cap is part of the new program that is effective 1/1/23 - it's in the bill but I can't remember the section and don't have the will to look it up again.

Ah, I got mine from Folsom Lake a month ago. At that time, neither sales guy knew that the $2k california incentive is income capped until I explained that I don't qualify. I'm glad they are more up to speed (to the minute!) now, it's a lot of fast-changing information to process!

 

[MW1515]

Please don't get to excited, this bill will do zip for climate change! China is opening a Coal Fired power plant every month! If China and India continue, nothing we do will change anything. Sorry my friend. And Scotland just cut down 14 million trees to build wind turbines!

As Ghandi said, "Be the change you wish to see in the world." It can be, and is, simultaneously true that those countries are still building coal plants but are also investing heavily in renewables and EVs as well. They are doing everything they can to catch up to our average standard of living. We should set the example, not shrug our shoulders and give up.

 

[TGIF]

That article in the OP's post suggests otherwise though...
I'm still digesting the bill for myself....

I have seen both interpretations—that qualifications change immediately and that guidance is needed before some changes occur for ‘22 and beyond. More digging is necessary before you despair of your situation.

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