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

[mccdeuce]

But the Mach-E hit the sweet spot. Crossover functionality, popular size, ~300 mile range, reasonable price point, styling, features, US manufacturer already big with US buyers, etc.

About 6-8 years ago there was flood of EVs in my office (with free charging). Probably 20+ Leafs, Fiat 500e, Bolts, Volts, etc. that was all due to the first EV tax credit. All of these EVs are long gone.

The issue is what Americans see as the "Sweet spot" We think all cars need to be larger, be road trip vehicles, and reasonably priced.

My wife's car is a 2019 VW e-Golf with "115 mile" range. Perfect, inexpensive commuter car. We need the Leafs, Fiat, Bolts, Volts and e-Golfs as relatively inexpensive BEVs($25-30k). Or even Tesla Model 3 for $35k. Give those cars a tax credit and get a BEV in more people's garages. The people buying $50-80k cars will buy them regardless of the credit - people are paying $5-10k markups!

Incentives to get more EVs on the road as daily drivers.

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[timbop]

I want all EV tax credits gone but this bill isn't that favorable to Tesla.

Model X and S don't qualify... most Model 3 trims don't qualify either either too expensive (more than $55K or using China-made LFP battery). The only one that gets the credit is the Model Y - assuming Tesla uses battery materials from Australia, Canada, Mexico and not China or Japan.

Subaru will get screwed by this bill. Toyota makes their EVs in Japan with batteries from China.

This bill is very much pushes the big-3 carmakers and others to build in the US/Mexico/Canada with US free trade battery materials.

Let's not forget that government aid (particularly from California) kept Tesla alive for quite a while. Notice how Musk repaid California's investment by thumbing his nose at at them when the state objected to Musk putting his workers in harm's way at the start of the pandemic?

Regardless, Tesla can still qualify for the "made in North America" requirement for the car itself, and the battery portion will work itself out over time since Elon is going to be mining lithium in the southwest "soon".

The key takeaway is that yes, cars and batteries built in the US effectively get subsidized by US tax laws. I'm not sure why that is being purported as a bad thing? Certainly Japan, Korea, and China have much stronger policies that significantly favor their domestic interests.

 

[xaudiblex]

What do you think will happen if:
1) Ford meets the 200k cap in Q3,
2) some orders gets converted over to 2023 models, and
3) the converted orders are delivered in early 2023?

 

[generaltso]

What do you think will happen if:
1) Ford meets the 200k cap in Q3,
2) some orders gets converted over to 2023 models, and
3) the converted orders are delivered in early 2023?

If the new bill passes, the MME will continue to qualify for a $7500 tax credit. But it will no longer require $7500 of tax liability.

 

[RedStallion]

Yep. Frankly, it's a huge waste of taxpayer money, because virtually every EV made not only sells immediately, but often has months-long waiting lists for it. Makes no sense to waste taxpayer money on products that would sell like hotcakes anyway.

That sure helps dealerships to charge exorbitant ADMs, which no doubt will increase if the bill passed. You can't blame them when government offers them free money, who would refuse.

 

[RedStallion]

It’s called the Inflation Reduction Act. It will also need Sinema’s support. I’m not sure that it is a reconciliation bill so may need to get Republican support, too. Will try to confirm. Includes right for Medicare to negotiate drug prices and minimum tax of 15% on corporations with $1B of book profits which could be difficult to vote against.

This huge government spending bill ironically named Inflation Reduction Act will do nothing but keep destroying the economy. Obscene taxing of the core economy will sure lead to less goods and services (PPI already been falling), getting on more debt that Fed will no doubt monetize again in the next round of QE will inflate the money supply (CPI is already insane). It's a great pump they invented that makes rich richer and poor poorer. The difference is only this time the recipients of those riches will be all the green tech scam businesses.

 

[Orangefirefish]

Exactly.

The end result of the tax credits is the government money goes to the auto manufacturers.

They currently are making RECORD profits. They also are all developing and delivering BEVs.

So why do we need the government to give them more money right now?

Kinda reminds me of the last stimulus checks we got. Gave everyone $ when it wasn’t needed as much anymore. The money all went in the bank and now we have record inflation…….

Well, save or spend, money supply increased so that’s where we are now.

 

[Keeperofthe7keys]

Of course. I think there has to be a balance though, and my point is that if the taxpayers are going to foot the bill then it should go to where it’s going to make a lot of impact. In general though I still think these are all band-aid solutions until renewables are the norm. Right now if we don’t change how much we drive, regardless of what we drive, then it’s all a false economy.

Agreed except for the last statement. While better urban design and public transit is necessary in the cities, along with financially solvent strong towns instead of endless suburban housing, every EV that replaces a gas vehicle on the road is an improvement. Even on coal generation they're still better and it's future proofed at that as our grid becomes cleaner.

The Senate Parliamentarian still has to approve the bill, in its current form, to be allowed to be voted on in the Senate through reconciliation. And this is something she has rejected in the past

That's not true, the parliamentarian is an advisory role that does not have that official power. Harris could decide to proceed but choose not to. There are limitations on what's valid in reconciliation, but the parliamentarian does not decide those rules.

 

[MrSensei]

Hi All,

I have finally get my Mustang Mach-E California Route 1 after close to 9 months of waiting.
I read few topics here about the Feb Tax Credit but still didn't fully understand it.
What's the requirement for getting the full $7,500 Feb Tax Credit? (is there an income limit?)
Do I need to finish any paperwork now or just wait until the tax season comes?
And Finally is there any other credit we might qualify for in California (other then the $750)?

Thank you all for your help

 

[generaltso]

Hi All,

I have finally get my Mustang Mach-E California Route 1 after close to 9 months of waiting.
I read few topics here about the Feb Tax Credit but still didn't fully understand it.
What's the requirement for getting the full $7,500 Feb Tax Credit? (is there an income limit?)
Do I need to finish any paperwork now or just wait until the tax season comes?
And Finally is there any other credit we might qualify for in California (other then the $750)?

Thank you all for your help

There is no income limit for the current federal tax credit. You just have to have at least $7500 of federal tax liability to get the full credit. You'll file for it when you do your taxes next year.

 

[s7davis]

If this passes, it will be really bad for Rivian. They would have had several years of credits left, but now all their vehicles over $80k won’t qualify at all. The same is true for the higher trims of the F-150 Lightning, but Ford was going to run out of credits after next year anyway.

Most people who can afford the 80k and up cars are already in higher tax bracket so may not qualify on grounds of Income. However, all companies will have to do is software limit the vehicles to meet the MSRP cap and then sell the range increase, horsepower, and other add on as an aftermarket upgrade so it doesn't affect MSRP. Remember EVs are just computers on wheel and everything except hardware can be upgraded thru updates.

This is exactly what tesla did in Canada for their incentives.

 

[EdD323]

A few thoughts from an old math teacher on the bill.
1. The name is silly. Most bills have silly names. Get over it. There is 300B in it to reduce the deficit and that is what Manchin wants, so that is what he gets. We should spend that on charging infrastructure, and that was in BBB but Manchinema killed it, so that’s that.
2. The funding mechanism is from an AMT minimum tax on giant corporations. The money is not coming from your pocket. If it goes from one corporation to another, I’d rather it go to one making EV’s. Quit complaining about “My tax money.” It ain’t your money.
3. Republicans might win the House this fall, but they won’t win the Senate. R’s are going to lose a couple seats. 2024 is a better map for them.
4. EV incentives are a good thing. They are why I bought one in 2022 and didn’t wait. They are why I bought a Ford instead of a Tesla.
5 Tax rebates only work if you have a large enough income. I do not because my pension isn’t big enough, but I am moving money out of an IRA and making it tax free with the $7500. Be creative, and legal.
6. It is a good thing that 2023 mme’s will have a tax credit. What the factory does to prices is out of our control.

 

[s7davis]

Remember if this bill passes both houses and signed o to law their technically is no credit it is a POS rebate that will be annotated on the purchase contract that the 7500 has been removed from cost of vehicle.

Do not forget their is 4k cap on used EVs that are at least 2 years old and max price of 25k

 

[Keeperofthe7keys]

If the new bill passes, the MME will continue to qualify for a $7500 tax credit. But it will no longer require $7500 of tax liability.

I missed the provision turning it into a fully refundable credit? If so that's great despite the limited cars it applies to being not so great news.

 

[devmach-e]

True. But...

It's about the longterm. You know this of course. In reality, turns out among the American people demand for EVs is insanely low, right now like 90% would NEVER EVER consider buying one, just currently the supply of EVs for that insanely low demand is temporarily far far lower. The bill seeks longterm adoption from the majority of Americans in the coming decades. Let's see currently 2%(?) of the cars on the road in the USA are EVs and that may reach 3%(?) next year. If every person in the USA bought only EVs this year and every year after, it would take greater than 20 years for the majority of cars on the road to no longer need gasoline.

I put it at 30 years or more. Average age of a car in the US fleet is 11.5 years. There’s some 268M light-duty passenger vehicles on the road. Between 16M and 17M are sold each year. So at current sales rates it would take between 16 and 17 years to replace every car, if, as you say, we bought nothing but EVs starting tomorrow. It’s gonna take a while before we can get to the point where we have enough diversity of models and price points, not to mention manufacturing capacity, to replace all passenger vehicles with EVs. I hope that in 30 years I’m still around to see that happen.

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