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

[mjs020294]

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.

They needed to include a minimum range provision for PHEVs. If the masses move to PHEVs that are capable of 50 miles on a charge it will eliminate over 90% of private vehicle gas usage (*made that number up but the percentage will be high).

We ordered an Escape PHEV to go along with our Mach E on order. My wife loves the Mach E but would feel more comfortable with a PHEV. We will buy both and keep the one she prefers.

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[Regulus7]

They needed to include a minimum range provision for PHEVs. If the masses move to PHEVs that are capable of 50 miles on a charge it will eliminate over 90% of private vehicle gas usage (*made that number up but the percentage will be high).

We ordered an Escape PHEV to go along with our Mach E on order. My wife loves the Mach E but would feel more comfortable with a PHEV. We will buy both and keep the one she prefers.

I agree. We really wanted a PHEV to complement our BEVs but my wife just did not like any of them on the market today!! So we just ended up getting a Macan…. The BEV are just for daily driving and commuting. And the ICE is for road-trips. We just can’t deal with the charge times and the inconvenience of finding a charging location on the major hiways

 

[kennethjk]

I agree. We really wanted a PHEV to complement our BEVs but my wife just did not like any of them on the market today!! So we just ended up getting a Macan…. The BEV are just for daily driving and commuting. And the ICE is for road-trips. We just can’t deal with the charge times and the inconvenience of finding a charging location on the major hiways

I hear you. We just took MME on a 240 mile trip to cape cod And then home. Fast charging is terrible on the cape. cant imaging my wife charging up on the way, which we could have avoided but then charging on the cape was 14 miles away from where we were staying. Lost 28 miles just to charge up. Had to charge up about 35 minutes going home, instead of normal 10. No big deal but it was extremely hot.

being retired I don’t mind the extra time to plan and charge but it’s not for everyone. A friend has a Tesla S and his wife refuses to let him take it on a long trip.

hybrids can relieve a lot of anxiety for sure.

 

[Flowell]

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.

The way the bill reads according to Jesse Jenkins at Princeton is the value added at each step determines the % content. So if a ton of lithium mined in Australia is bought for 1000 dollars and then goes through China and is bought by SK in refined form for 1100 dollars, 1000 dollars of value is determined to be Australian and 100 dollars from China. I do not think my numbers are in any way right, but this is the math the lawyers will have to do. It is all about the value added at each step.

 

[mateo]

I've got a GT on order - one of the last ones. If it gets built as a '22 I'm sure it would be in October.

Looks like I've got three good scenarios (and additional bad ones where I get no rebate):
- Arrives in Q4 for full $7500 rebate
- Arrives in Q1 for grandfathered $7500 rebate
- Arrives in Q1 for $7500 rebate if the Mach-E qualifies as 50% clean, etc.

The grandfathered option is the most curious one since per the Act, I could treat it as being placed the day before "enactment." That would be a pretend Q3/Q4 date which is better than I'd have gotten without this Act (as a 50% rebate in '23).

My understanding is "day of enactment" of bills is generally meant to be understood as the day the President signs it into law. Therefore, I'd actually need to have a binding contract prior to it being signed into law per the text of the Act.

I would not consider my pre-order as a binding purchase agreement. Do any dealers actually permit me to sign a binding purchase agreement prior to the car being built? I expect that would mean they would have to specify a price in the contract.

If I could get a binding contract signed this week then I should be guaranteed the $7500. Otherwise, it's left up to chance...

 

[kennethjk]

I've got a GT on order - one of the last ones. If it gets built as a '22 I'm sure it would be in October.

Looks like I've got three good scenarios (and additional bad ones where I get no rebate):
- Arrives in Q4 for full $7500 rebate
- Arrives in Q1 for grandfathered $7500 rebate
- Arrives in Q1 for $7500 rebate if the Mach-E qualifies as 50% clean, etc.

The grandfathered option is the most curious one since per the Act, I could treat it as being placed the day before "enactment." That would be a pretend Q3/Q4 date which is better than I'd have gotten without this Act (as a 50% rebate in '23).

My understanding is "day of enactment" of bills is generally meant to be understood as the day the President signs it into law. Therefore, I'd actually need to have a binding contract prior to it being signed into law per the text of the Act.

I would not consider my pre-order as a binding purchase agreement. Do any dealers actually permit me to sign a binding purchase agreement prior to the car being built? I expect that would mean they would have to specify a price in the contract.

If I could get a binding contract signed this week then I should be guaranteed the $7500. Otherwise, it's left up to chance...

I did Get a signed contract from the dealer when I ordered the car, I never ordered on line, I just ordered from dealer directly. . I am sure you can do so also. Just include all discounts you are entitled to, x plan, option plan etc etc

 

[GreaseMonkey]

I've got a GT on order - one of the last ones. If it gets built as a '22 I'm sure it would be in October.

Looks like I've got three good scenarios (and additional bad ones where I get no rebate):
- Arrives in Q4 for full $7500 rebate
- Arrives in Q1 for grandfathered $7500 rebate
- Arrives in Q1 for $7500 rebate if the Mach-E qualifies as 50% clean, etc.

The grandfathered option is the most curious one since per the Act, I could treat it as being placed the day before "enactment." That would be a pretend Q3/Q4 date which is better than I'd have gotten without this Act (as a 50% rebate in '23).

My understanding is "day of enactment" of bills is generally meant to be understood as the day the President signs it into law. Therefore, I'd actually need to have a binding contract prior to it being signed into law per the text of the Act.

I would not consider my pre-order as a binding purchase agreement. Do any dealers actually permit me to sign a binding purchase agreement prior to the car being built? I expect that would mean they would have to specify a price in the contract.

If I could get a binding contract signed this week then I should be guaranteed the $7500. Otherwise, it's left up to chance...

Yes. Ask your dealer for a New Vehicle Buyer’s Order that provides out the door price (including discounts, taxes, plates, etc) and serves as a binding contract. They should also provide you with an order summary that spells out your vehicle specs, MSRP, invoice and A/Z, D and X plan pricing.

 

[kennethjk]

I've got a GT on order - one of the last ones. If it gets built as a '22 I'm sure it would be in October.

Looks like I've got three good scenarios (and additional bad ones where I get no rebate):
- Arrives in Q4 for full $7500 rebate
- Arrives in Q1 for grandfathered $7500 rebate
- Arrives in Q1 for $7500 rebate if the Mach-E qualifies as 50% clean, etc.

The grandfathered option is the most curious one since per the Act, I could treat it as being placed the day before "enactment." That would be a pretend Q3/Q4 date which is better than I'd have gotten without this Act (as a 50% rebate in '23).

My understanding is "day of enactment" of bills is generally meant to be understood as the day the President signs it into law. Therefore, I'd actually need to have a binding contract prior to it being signed into law per the text of the Act.

I would not consider my pre-order as a binding purchase agreement. Do any dealers actually permit me to sign a binding purchase agreement prior to the car being built? I expect that would mean they would have to specify a price in the contract.

If I could get a binding contract signed this week then I should be guaranteed the $7500. Otherwise, it's left up to chance...

Also makes sure VIN is on the contract, as I am sure it will be . You shouldn’t have a problem with all the proper info on it.

 

[mateo]

Also makes sure VIN is on the contract, as I am sure it will be . You shouldn’t have a problem with all the proper info on it.

Thanks for the info everybody. Regarding the VIN - I wouldn't get that until it's been scheduled for production, right? I'm hoping for an October date but haven't gotten one yet.

I really, really want to avoid having to do the '23 tax credit terms (if Mach-E even qualifies) since it means I'd have to file my taxes separately from my spouse to get around the $300k joint limit.

 

[kennethjk]

Thanks for the info everybody. Regarding the VIN - I wouldn't get that until it's been scheduled for production, right? I'm hoping for an October date but haven't gotten one yet.

I really, really want to avoid having to do the '23 tax credit terms (if Mach-E even qualifies) since it means I'd have to file my taxes separately from my spouse to get around the $300k joint limit.

Yes the Vin comes later. My original contract did not have the VIn . I had it updated when I got it. As long as you have your order on a contract with dealer you should be ok

 

[voxel]

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.

You missed a MAJOR portion of the bill which says in 2024... no battery minerals are allowed to come from "foreign entities of concern" after 2023. So anything from China gets auto-disqualified.

As for 40% "value" in 2023 (which I read)... I think there will be EVs eligible because Nickel is mainly from Canada and Australia which are both free trade countries and that's the bulk of the cost a battery (811 cells - i.e 80% nickel, 10% manganese, 10% cobalt with lithium being the liquid electrolyte).

 

[voxel]

I agree. We really wanted a PHEV to complement our BEVs but my wife just did not like any of them on the market today!! So we just ended up getting a Macan…. The BEV are just for daily driving and commuting. And the ICE is for road-trips. We just can’t deal with the charge times and the inconvenience of finding a charging location on the major hiways

What about an X5 PHEV?

I had a RAV4 Prime but it's a little small and has a spartan interior (it's a Toyota after all). I heard the Lexus variant is nice and uses the newer Toyota infotainment system.

I personally don't care for BEV road trips. They aren't even that quiet. I have dB meter proof that the Mach-E is generally pretty noisy on the highways because my Telluride is literally quiet in comparison. Folks don't complain about EV noise because it's often not objectionable noise like an engine revving.

 

[Caulk-E]

You missed a MAJOR portion of the bill which says in 2024... no battery minerals are allowed to come from "foreign entities of concern" after 2023. So anything from China gets auto-disqualified.

As for 40% "value" in 2023 (which I read)... I think there will be EVs eligible because Nickel is mainly from Canada and Australia which are both free trade countries and that's the bulk of the cost a battery (811 cells - i.e 80% nickel, 10% manganese, 10% cobalt with lithium being the liquid electrolyte).

I think everyone has agreed that the mining location isn’t the issue. The issue is all those minerals are processed in China. So although it may be mined in Canada and Australia, both of those countries are unable to process the minerals for it to be put into batteries. Basically it’s mined in various countries and then sent to China for processing. See below…

 

[voxel]

I think everyone has agreed that the mining location isn’t the issue. The issue is all those minerals are processed in China. So although it may be mined in Canada and Australia, both of those countries are unable to process the minerals for it to be put into batteries. Basically it’s mined in various countries and then sent to China for processing. See below…

As mentioned in another post and specifically in the bill.. the term used is "value"

It can be processed in China/Russia/Iran in 2023 (not 2024 though) with the value being the core determining factor. Anode and cathode processing probably adds significant value and those are most definitely overseas. Korea is a free trade country so if anode/cathode manufacturing was performed there for the Bolt batteries using Australian nickel... that could easily meet the 40% value metric.

Again, I think this is all moot because IRS etc will provide material waivers in 2023. There will be plenty of EVs in 2023 that will get full credit. 2024 onwards.. not so sure.

 

[AKgrampy]

I've got a GT on order - one of the last ones. If it gets built as a '22 I'm sure it would be in October.

Looks like I've got three good scenarios (and additional bad ones where I get no rebate):
- Arrives in Q4 for full $7500 rebate
- Arrives in Q1 for grandfathered $7500 rebate
- Arrives in Q1 for $7500 rebate if the Mach-E qualifies as 50% clean, etc.

The grandfathered option is the most curious one since per the Act, I could treat it as being placed the day before "enactment." That would be a pretend Q3/Q4 date which is better than I'd have gotten without this Act (as a 50% rebate in '23).

My understanding is "day of enactment" of bills is generally meant to be understood as the day the President signs it into law. Therefore, I'd actually need to have a binding contract prior to it being signed into law per the text of the Act.

I would not consider my pre-order as a binding purchase agreement. Do any dealers actually permit me to sign a binding purchase agreement prior to the car being built? I expect that would mean they would have to specify a price in the contract.

If I could get a binding contract signed this week then I should be guaranteed the $7500. Otherwise, it's left up to chance...

You need to check the IRS requirements. I am pretty sure from what I have read that you have to take possession of and place the vehicle into operation and not just have a purchase agreement. This was discussed elsewhere on the forum. I could be wrong though. One of the discussions was someone trying to use a purchase in December to get credit for 2021 tax year but would not take possession until 2022.

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