Senate Bill Deal to Expand EV Tax Credits (7/27/2022)

[Caulk-E]

After 2023, yes.. zero EVs will eligible because of the "foreign entity of concern" (aka China, Russian) rule (for battery minerals) but 2023 will have multiple EVs eligible.

That's what the article is focusing on IMO. I still think you should read the bill's text

Pages 381 onward:

https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_of_2022.pdf

Have you read this bill? It appears there might be a misunderstanding in your interpretation. This bill, if passed, will go into effect in January of 2023. The bill requires 40% of the minerals in the batteries to be mined or processed in North America or a free trade country *in 2023, not 2024.* Please refer to page 387, line 4 in the link you provided. In 2024, the minerals percentage increases to 50% page 387, line 9. I have no idea why you think the minerals requirement don’t take place until after 2023.

My point is in 2023, when this bill, if passed, takes effect, no vehicles will be eligible because of the 40% minerals requirement.

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[DennisD]

Have you read this bill? It appears there might be a misunderstanding in your interpretation. This bill, if passed, will go into effect in January of 2023. The bill requires 40% of the minerals in the batteries to be mined or processed in North America or a free trade country *in 2023, not 2024.* Please refer to page 387, line 4 in the link you provided. In 2024, the minerals percentage increases to 50% page 387, line 9. I have no idea why you think the minerals requirement don’t take place until after 2023.

My point is in 2023, when this bill, if passed, takes effect, no vehicles will be eligible because of the 40% minerals requirement.

For one, the ink has not dried and can be changed.

Two, if that is the case it will be "tweaked". I am quite confident that people outside of this Forum have realized this "fact" and are making waves now i.e. Toyota and the like.

You are most likely correct and the Bill as written (like most Bills I might add) need rewording to fit their intent so to speak. Most Bills are rushed when they know they are going against a clock and most Congressmen don't really read the entire Bill. It is insane but that is how the process has gone on for years. Both sides of the aisle do this when ever they are in control.

If it is truly impossible, they will many times "save face" and the rewording will go under the radar (via amendments) and they will claim that nothing has been modified when it actually has.

I would be willing to wager that the Bill in current form will be changed either now or shortly thereafter and some (not all) will qualify.

 

[TGIF]

The issue is to find a way to encourage domestic production of cars and components while trying to promote adoption of EVs. It will take some finesse. Not an easy task.

 

[Regulus7]

The EV portion of this bill is all smoke and mirrors. Unless they give the industry waivers there is likely to be no cash incentive for any EV buyers and they will be punishing all those brands who never got to 200k. Typical political cluelessness… or even worse directed sabotage by Manchin.

It seems to me that they should have kept the original 200k limit by brand and allowed that to run off and added a $7500 rebate for people who cannot use the tax credits. I get the intent to re-shore industry. I get it but the best way to do that is to give companies accelerated depreciation if they invest in battery tech and or minerals in the USA or free trade country.

 

[TGIF]

The EV portion of this bill is all smoke and mirrors. Unless they give the industry waivers there is likely to be no cash incentive for any EV buyers and they will be punishing all those brands who never got to 200k. Typical political cluelessness… or even worse directed sabotage by Manchin.

It seems to me that they should have kept the original 200k limit by brand and allowed that to run off and added a $7500 rebate for people who cannot use the tax credits. I get the intent to re-shore industry. I get it but the best way to do that is to give companies accelerated depreciation if they invest in battery tech and or minerals in the USA or free trade country.

I agree with you. There are always winners and losers with new legislation. Keeping the old rules for a number of years could have been a win-win.

 

[DennisD]

The EV portion of this bill is all smoke and mirrors. Unless they give the industry waivers there is likely to be no cash incentive for any EV buyers and they will be punishing all those brands who never got to 200k. Typical political cluelessness… or even worse directed sabotage by Manchin.

It seems to me that they should have kept the original 200k limit by brand and allowed that to run off and added a $7500 rebate for people who cannot use the tax credits. I get the intent to re-shore industry. I get it but the best way to do that is to give companies accelerated depreciation if they invest in battery tech and or minerals in the USA or free trade country.

You have nailed it on the head.

This is exactly why when one votes, choose the candidate that will do the most good for everybody and the good of the Country going forward.

Even though Manchin at many times is a roadblock, he is in a very Red State and we are somewhat fortunate to come out with a Senate vote that is quasi progressive if you will with the 50 Senate threshold.

The bottom line is this. If you truly want change, you will need to change the landscape that currently exists. Until that happens, this is the Bill that is most representative of what we currently have. Full Stop

People can complain all they want, but these are the cards that were dealt back in 2020 and the hand showing is not that good but it is better than folding and doing nothing to address many of the problems that exists in this topic.

In this Scenario, Manchin was holding the cards.

 

[Caulk-E]

For one, the ink has not dried and can be changed.

Two, if that is the case it will be "tweaked". I am quite confident that people outside of this Forum have realized this "fact" and are making waves now i.e. Toyota and the like.

You are most likely correct and the Bill as written (like most Bills I might add) need rewording to fit their intent so to speak. Most Bills are rushed when they know they are going against a clock and most Congressmen don't really read the entire Bill. It is insane but that is how the process has gone on for years. Both sides of the aisle do this when ever they are in control.

If it is truly impossible, they will many times "save face" and the rewording will go under the radar (via amendments) and they will claim that nothing has been modified when it actually has.

I would be willing to wager that the Bill in current form will be changed either now or shortly thereafter and some (not all) will qualify.

I checked this morning, and the ink is drying. The bill will pass as is without any amendments to the EV Credit.

If history is any guide, the current EV Tax Credit bill was never “tweaked” nor reworded via amendments.

I do think that *some* EVs will qualify, but not because the bill was amended. It will be because manufacturers have modified their supply chain to take advantage of the EV credit. But this will be years out.

Lastly, let’s not forget the Republicans are projected to win the House and possibly the Senate in the fall. And if they made one thing clear, it’s they are not supportive of any EV incentive.

 

[DennisD]

I checked this morning, and the ink is drying. The bill will pass as is without any amendments to the EV Credit.

If history is any guide, the current EV Tax Credit bill was never “tweaked” nor reworded via amendments.

I do think that *some* EVs will qualify, but not because the bill was amended. It will be because manufacturers have modified their supply chain to take advantage of the EV credit. But this will be years out.

Lastly, let’s not forget the Republicans are projected to win the House and possibly the Senate in the fall. And if they made one thing clear, it’s they are not supportive of any EV incentive.

The House will need to pass it and it will be signed by Biden. The ink isn't quite dry but almost there.

Once again, Manchin was holding the cards and there may be many moving parts in the coming year or years after the dust settles.

Also, the Big 3 have immense influence on the Republican Party as well. If Ford, Chrysler etc. want the language "tweaked", I will once again be willing to wager that it will be done and it will go unnoticed by the vast majority (except of course on this forum).

Now if you as an individual voter wanted it done..............................Good Luck

Deep pockets usually win out in the end and this will be no different.

 

[All Hat No Cattle]

The bill requires 40% of the minerals in the batteries to be mined or processed in North America or a free trade country *in 2023, not 2024.* Please refer to page 387, line 4 in the link you provided. In 2024, the minerals percentage increases to 50% page 387, line 9. I have no idea why you think the minerals requirement don’t take place until after 2023.

OK, this is getting complicated. It appears that, on the surface, China has the lithium market cornered. It does not.

Where is the largest lithium deposit in the world?

Chile

Where is lithium available from? With 8 million tons, Chile has the world's largest known lithium reserves. This puts the South American country ahead of Australia (2.7 million tons), Argentina (2 million tons) and China (1 million tons).

Is Chile a free trade partner? Not yet. Is Australia a free trade partner? Definitely.

Is Chile part of Nafta?

Chile would become the fourth member of this integration scheme and the first nation invited to join NAFTA following its negotiation and implementation by the three original members.

Does Australia have a free trade agreement with America?


The United States-Australia Free Trade Agreement (FTA) entered into force on January 1, 2005. As a result of the FTA, tariffs that averaged 4.3 percent were eliminated on more than 99% of the tariff lines for qualifying U.S. manufactured goods exported to Australia.

Is the Federal Government aware of these facts? I believe so.

And to top it off, because I live in Nevada, I get to see stories like this regularly.

Lithium rush in Nevada could usher new era of mining in the West

Where is the lithium mine in Nevada?

Lithium Nevada says it will start mining at Thacker Pass in 2022, initially producing about 30,000 metric tons of lithium carbonate. It will begin production on its second phase in 2025, doubling that number. Officials say it will provide 25% of the world's lithium and will have a mine life of at least 46 years.Apr 6, 2022

Nevada Mine Could Produce 25% of World's Lithium - KTVN
https://www.2news.com › nevada-mine-could-produce-25...

Now I understand that some of the 15+ lithium mining applications in this state are pie-in-the-sky operations, but not all of them.

Google it.

 

[Regulus7]

BEVs are being bought by wealthier people who primarily live in the bigger cities. These people will continue to buy EVs but… the growth rate in EV sales will slow and there is no way we are going to get to forecast numbers of EV penetration by 2030 of 50% or more apart from some of the States like California which will mandate this. Europe EV adoption will be much faster and they will likely get to 50% by 2030 in new sales. High end cars will still be made as EVs because the European manufacturers are all moving in this direction.

This bill could have been so much more impactful but instead Its actually going to be a step backwards for EV adoption in the USA. We bought 2 EVs in the past 12 months and will buy another EV probably in 3-5 years depending on how the technology develops and we will regardless of any EV rebate or tax gimmick.

But it is important to stress here that our EV purchases this last 12 months was 100% driven by the tax credit. If there had not been a tax credit I can guarantee you that we would NOT have bought a Mach E, rather we probably would have gotten just 1 EV and it would have been a model S. So having the tax credit 100% influenced our decision to buy an ID4 and a Mach E. So my prediction is because of the many failures in this bill US auto manufacturers of EVs will not have the sales numbers they wish they could and Tesla will continue to dominate.

 

[dbsb3233]

BEVs are being bought by wealthier people who primarily live in the bigger cities. These people will continue to buy EVs but… the growth rate in EV sales will slow and there is no way we are going to get to forecast numbers of EV penetration by 2030 of 50% or more apart from some of the States like California which will mandate this. Europe EV adoption will be much faster and they will likely get to 50% by 2030 in new sales. High end cars will still be made as EVs because the European manufacturers are all moving in this direction.

This bill could have been so much more impactful but instead Its actually going to be a step backwards for EV adoption in the USA. We bought 2 EVs in the past 12 months and will buy another EV probably in 3-5 years depending on how the technology develops and we will regardless of any EV rebate or tax gimmick.

But it is important to stress here that our EV purchases this last 12 months was 100% driven by the tax credit. If there had not been a tax credit I can guarantee you that we would NOT have bought a Mach E, rather we probably would have gotten just 1 EV and it would have been a model S. So having the tax credit 100% influenced our decision to buy an ID4 and a Mach E. So my prediction is because of the many failures in this bill US auto manufacturers of EVs will not have the sales numbers they wish they could and Tesla will continue to dominate.

It's hard to say for sure where the battery manufacturing future will lie, but I agree that at minimum there will be a "donut hole" in the next few years at least where few BEVs will be covered (unless the government just decides to ignore the rules in the bill).

The real boon could be for PHEVs, which appear to be treated exactly the same as BEVs now. At least it sounds that way. Has anyone seen otherwise?

If a 10 kWh PHEV battery pack gets the same $7500 taxpayer subsidy as a 100 kWh BEV battery pack, you can bet manufacturers will be allocating the limited # of qualifying battery cells to PHEVs instead of BEVs to take advantage of $75,000 worth of subsidy rather than just $7500 for the same amount of battery cells. That could mean, for example, the Mach-E and Lightning getting squat, while the Escape PHEV gets the full $7500.

If that's the case, manufacturers may slow their BEV plans and jump headlong into PHEVs.

 

[Caulk-E]

OK, this is getting complicated. It appears that, on the surface, China has the lithium market cornered. It does not.



Is Chile a free trade partner? Not yet. Is Australia a free trade partner? Definitely.





Is the Federal Government aware of these facts? I believe so.

And to top it off, because I live in Nevada, I get to see stories like this regularly.





Now I understand that some of the 15+ lithium mining applications in this state are pie-in-the-sky operations, but not all of them.

Google it.

But the bill is not just looking at where the minerals are mined. The issue is where the minerals are processed. The majority of processing for major battery minerals, including lithium, nickel and cobalt, is done in China.

 

[DennisD]

Oddly enough, the janitor would be more than likely to be Republican now than 10-20 years ago. There are exceptions though i.e. the Pillow Nut. The sands have definitely shifted so to speak. We agree on that one. Not sure why the Democrats have shifted to a more white collar (more educated) demographic but it has in the recent past decade or so. Complete 180 on that one.

Below is a link that should provide proof that many top corporations donate to both parties though.

https://www.marketwatch.com/story/c...-to-election-objector-republicans-11624898975

In many instances, the voter doesn't have influence but rather the big ticket donor. They usually contribute to both parties for a reason thanks to Citizens United. They get their bread buttered on both sides.

Unfortunately, the "common man" has failed to realize this for many decades. Again, on both sides of the aisle. It is frustrating.

But I do know if it hurts the Big 3, both parties will cave and "tweak" as needed. Trust me.

 

[dbsb3233]

The old scheme (capped at 200k units per manufacturer) ended up costing taxpayers about $10B thru 2022. Roughly 1.4 million vehicles with $7500 credits.

10 years of this new scheme (if they get the battery sources and manufacturing locations shifted around in a few years so most quality) could end up costing taxpayers a quarter of a trillion dollars. That would be roughly an average of 20% market share for qualifying BEVs + PHEVs over the next decade. And that may be conservative. By the 10th year we could be at 70% BEV+PHEV market share (although not all qualifying, of course).

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