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

[ARK]

Even if Ford hits 200K this quarter they are allowed one more quarter at 100% then the phase out begins (50% for two quarters then 25% for two more).

The complication is "enactment of this Act" - there is some debate on whether it is signing or Jan 1, 2023.

I think it is from when the president signs and law is published (i.e., probably in the next week or so). The House has a frequently asked questions page on how the United States Code works and here is where they address this issue of effective date versus enactment date:

Q: How can I tell when a law becomes effective?

A: Unless otherwise provided by law, an act is effective on its date of enactment. When a Code section or an amendment to a Code section is effective on a date other than its date of enactment, the Code will almost always include an effective date note under the section. See the Detailed Guide to the Code.

Source: https://uscode.house.gov/faq.xhtml#.xhtml

EDIT: If I am correct, the House of Representatives is set to vote on the bill this Friday at a special summer session, according to Reuters. I'd bet Biden would sign it over the weekend.

So it seems people have this week to get a firm purchase agreement and order in for an EV to take advantage of the current rules, if they think the new law will take the Mach-E's (or other EVs they are interested in) tax credit away due to the battery sourcing rules being discussed in this thread.

Sponsored

 

[MachKet]

The battery composition stuff doesn't start until 2024. So the Mach-e will be eligible next year for the full 7500 if you fit the income restriction

 

[metroplex]

Quite a bit of Lithium and battery minerals are sourced from Chile (a nation that has a free-trade agreement with the US) but are processed in countries like China. This includes the LG Chem batteries used for Tesla as well as the Panasonic batteries used for Tesla.

Dealers can't take the credit off the purchase immediately until 2024.

A lot of the batteries for the American-branded vehicles are assembled in the US (Tesla, GM, etc...) so this isn't *too* bad at the moment, but it'd be interesting to see what ends up happening.

 

[Pioneer74]

PHEVs are great. How many are assembled in the US with NA-source batteries? Probably zero. Assembled? Sorrento PHEV is made in Korea... also not RAV4 Prime, not Prius Prime, not Lexus PHEV, not X5 PHEV, etc. So probably zero again

Escape PHEV is assembled in Louisville KY.

 

[dbsb3233]

The battery composition stuff doesn't start until 2024. So the Mach-e will be eligible next year for the full 7500 if you fit the income restriction

As I understand it, the 40% requirement for critical materials and 50% for non-critical materials still applies to battery composition in 2023.

The China exclusion doesn't start until 2024 (non-critical materials) and 2025 (critical) though.

So in 2023, it can still have China materials, but it still must meet the 40% critical/50% non-critical thresholds. Thus many current batteries would be excluded (70% by industry sources).

https://www.reuters.com/business/au...proposal-would-make-70-ineligible-2022-08-05/

 

[dbsb3233]

Escape PHEV is assembled in Louisville KY.

Yep. It meets the manufacturing requirement for the first $3750, but pretty strong chance it fails the remaining $3750 for the battery.

 

[MachKet]

As I understand it, the 40% requirement for critical materials and 50% for non-critical materials still applies to battery composition in 2023.

The China exclusion doesn't start until 2024 (non-critical materials) and 2025 (critical) though.

So in 2023, it can still have China materials, but it still must meet the 40% critical/50% non-critical thresholds. Thus many current batteries would be excluded (70% by industry sources).

https://www.reuters.com/business/au...proposal-would-make-70-ineligible-2022-08-05/

This article lays it out well
https://electrek.co/2022/08/07/senate-improves-ev-tax-credit-in-largest-climate-bill-ever/

mineral and material guidelines don’t go into effect until 2024

 

[TGIF]

Does this go into effect when passed and signed by the President or in tax year 2023? I am days (a week?) away from getting my MME and wonder if I need to get additional documentation asap.

 

[dbsb3233]

This article lays it out well
https://electrek.co/2022/08/07/senate-improves-ev-tax-credit-in-largest-climate-bill-ever/

mineral and material guidelines don’t go into effect until 2024

That's what Electrek said but I'm not sure it's right. The details start on page 386...

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

 

[dbsb3233]

Does this go into effect when passed and signed by the President or in tax year 2023? I am days (a week?) away from getting my MME and wonder if I need to get additional documentation asap.

Goes into effect for 1/1/2023. If you take delivery this year, you still get the old $7500 credit.

The exception tied to the signing date is just for people that have a purchase agreement now (before it gets signed) but can't end up taking delivery until 2023. It means they can still get the old credit.

 

[MachKet]

Goes into effect for 1/1/2023. If you take delivery this year, you still get the old $7500 credit.

The exception tied to the signing date is just for people that have a purchase agreement now (before it gets signed) but can't end up taking delivery until 2023. It means they can still get the old credit.

you could actually be correct, it is vague.

 

[dbsb3233]

you could actually be correct, it is vague.

Vague, and a mess. Even the "experts" are gonna have their work cut out for them determining what actually qualifies and what doesn't. And as someone else posted over the weekend, it may prove to be such a mess that they'll figure out a way to waive the restrictions initially.

Lots to be figured out on this thing.

 

[phil]

Because our politicians are idiots.

You give politicians way too much credit.

They are corrupt, misanthropic, amoral idiots.

 

[moparguy]

Does having an order qualify?
I have this but didn't sign anything with me dealer, they are great and do MSRP and I bought multiple cars from them at MSRP so never signed anything.

 

[TGIF]

Does having an order qualify?
I have this but didn't sign anything with me dealer, they are great and do MSRP and I bought multiple cars from them at MSRP so never signed anything.

Inquiring minds want to know. That’s what I have and no problems with dealer honoring price. They sent it to me but unsigned.