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

[dbsb3233]

”Yah this leads me to think that money would be better spent on more charging stations and making rooftop solar more affordable. As well as, upgrades to the national grid.”

In my neck of the woods you could have a charging station on every corner but I f the car costs more to begin with, it is a non-starter. Cheap is the name of the game, not forward-thinking or considering consequences a few years down the road. It’s truly a lose-lose proposition. If you use government incentives to spur sales you are being foolish with taxpayers money. If you don’t have the incentives and infrastructure you won’t sell the cars and you will lose out on benefits to the climate and advances in technology and jobs that come with it.

I mostly agree, although that varies greatly across the buyer spectrum. It's not unlike ICE car sales, where some people are only willing to spend $20k, others $40k, others $60k, and others $80k. Different buyers at different price points. When EV sales are just 5% market share, they can be more expensive and still usually find buyers on the higher end. Tesla is a good example of that right now. They've been out of $7500 credits for 3 years and still have waiting lists for their cars at $65k.

But that only goes so far. When we get to 10%, 20%, 30% market share, price competitiveness becomes more and more important. But hopefully battery costs will have come down significantly by then as volume ramps up, and today's $65k model naturally costs $55k or $50k by then.

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[billyba36]

Pro Tip: LET IT GO.

 

[Raymondjram]

As I have posted before, this should not be a tax credit because not many pay over $7,500 in Federal taxes, especially for someone such as myself who does not pay any Federal tax. It should be a point of sale rebate at the dealership for any customer with the funds to buy but not the income for a tax rebate.

Second, it must not be given to any import brand, only to domestics, so Ford, GM, Rivian, Tesla, and other smaller domestic brands can use it to sell. No money for any import brand from Asia or Europe. I know that the average U.S. citizen who does pay Federal taxes will never accept having their money used to support the imports that reduce domestic sales and jobs.

 

[67 Stang Convertible]

Beg my laziness; I did not read this entire thread. But why are they putting an Adjusted Gross Income on this tax credit. Is this true??? $150,000 per individual and $300,000 joint filing. I bet a lot of us/you guys who purchased this $60K care tick up over that income level. #That Sucks

 

[ARK]

As I have posted before, this should not be a tax credit because not many pay over $7,500 in Federal taxes, especially for someone such as myself who does not pay any Federal tax. It should be a point of sale rebate at the dealership for any customer with the funds to buy but not the income for a tax rebate.

Second, it must not be given to any import brand, only to domestics, so Ford, GM, Rivian, Tesla, and other smaller domestic brands can use it to sell. No money for any import brand from Asia or Europe. I know that the average U.S. citizen who does pay Federal taxes will never accept having their money used to support the imports that reduce domestic sales and jobs.

*looks at his last year's tax return*

I still think most people would be very happy if they were in the position of not being able to benefit from the federal tax credit because they lived somewhere where they don't pay any federal income taxes at all, a wonderful problem to have.

 

[Regulus7]

Beg my laziness; I did not read this entire thread. But why are they putting an Adjusted Gross Income on this tax credit. Is this true??? $150,000 per individual and $300,000 joint filing. I bet a lot of us/you guys who purchased this $60K care tick up over that income level. #That Sucks

Its politics. Arguably, the richer states like CA, NY, CT, NJ already have higher EV adoption so I suppose they would want to target more of the 'fly-over' states and there this income limit would be less of a factor. But overall, the content issues on assembly and battery materials likely means most new EVs next year will barely qualify anyhow, so really its more posturing and sound-bite impact for the Dems than anything else... This legislation is not going to be that big an impetus on EV adoption I would wager...

 

[DennisD]

Beg my laziness; I did not read this entire thread. But why are they putting an Adjusted Gross Income on this tax credit. Is this true??? $150,000 per individual and $300,000 joint filing. I bet a lot of us/you guys who purchased this $60K care tick up over that income level. #That Sucks

This is just a guess, but I would guess that they are trying to get more of the "Middle Class" to purchase an EV. I would think that many people that you see driving a Tesla or a car similar are in the upper middle class and beyond. If they really want to get an EV in everyone's garage so to speak, they will need to find more creative ways of finding how the less fortunate people to buy one.

I am not saying I agree with this but rather speculate that this is what they are striving to do. This would be a "progressive tax credit" structure in knowing that Bezos or Buffett and the like don't need this credit to get into an EV. While I fully realize that many on this forum don't reside in that caliber, they had to start somewhere. I am not fully abreast of the proposed Bill, but it would be nice to see a natural phase down rather than an absolute cut off. If you were only $1 off the cut off, one would be much better off to not go to work one day of the year. You would essentially be saving thousands in that scenario.

Just my 2 cents.

 

[Mach1E]

This is just a guess, but I would guess that they are trying to get more of the "Middle Class" to purchase an EV. I would think that many people that you see driving a Tesla or a car similar are in the upper middle class and beyond. If they really want to get an EV in everyone's garage so to speak, they will need to find more creative ways of finding how the less fortunate people to buy one.

I am not saying I agree with this but rather speculate that this is what they are striving to do. This would be a "progressive tax credit" structure in knowing that Bezos or Buffett and the like don't need this credit to get into an EV. While I fully realize that many on this forum don't reside in that caliber, they had to start somewhere. I am not fully abreast of the proposed Bill, but it would be nice to see a natural phase down rather than an absolute cut off. If you were only $1 off the cut off, one would be much better off to not go to work one day of the year. You would essentially be saving thousands in that scenario.

Just my 2 cents.

Yeah a phase out would make more sense.

This is an example of a “tax torpedo.” Where an extra $1 in income could cost you $7500.

It still begs the question, if it’s a point of sale credit, which year’s income do they use? Last year, current year?

If current- do you give the credit back if you end up making $150,001?

If last year, what if it’s January through April and you haven’t filed taxes yet?

Just more stupidity by the government. Hopefully they’ll iron it out.

Side note- $150k is well below the “we won’t raise taxes on anyone below $400k.” Go figure…..

And yes, I know it’s technically not a “tax raise.” But what’s the difference between the government taking $7500 from you or “not giving you” $7500. May not be called a “tax” but the end result is the same.

 

[TGIF]

I mostly agree, although that varies greatly across the buyer spectrum. It's not unlike ICE car sales, where some people are only willing to spend $20k, others $40k, others $60k, and others $80k. Different buyers at different price points. When EV sales are just 5% market share, they can be more expensive and still usually find buyers on the higher end. Tesla is a good example of that right now. They've been out of $7500 credits for 3 years and still have waiting lists for their cars at $65k.

But that only goes so far. When we get to 10%, 20%, 30% market share, price competitiveness becomes more and more important. But hopefully battery costs will have come down significantly by then as volume ramps up, and today's $65k model naturally costs $55k or $50k by then.

Yes. There is a price to be an early adopter. Look at TV or computer technology. You get much more for your money now than 10-20 years ago. When the technology of EVs matures, chances are it will be much less expensive.

I realize buying an EV isn’t priced for the majority of the American public yet. It will likely get there and tax incentives are here to help it mature and happen faster.

 

[hollisms]

If they did a point of sale rebate then congress would have to figure out how to fund it. Done via a tax deduction they tax the tax filer less and sidestep the the funding issue and “centralize” the administration to the IRS.

(Not to mention if you aren’t paying federal income tax your aren’t paying the congressperson’s salary…. But… you do vote…. right?!?!? )

Just some thoughts on why I think it is the way it is…

 

[DennisD]

Yes. There is a price to be an early adopter. Look at TV or computer technology. You get much more for your money now than 10-20 years ago. When the technology of EVs matures, chances are it will be much less expensive.

I realize buying an EV isn’t priced for the majority of the American public yet. It will likely get there and tax incentives are here to help it mature and happen faster.

Very well said. Once again, while I don't think this Bill is perfect it would be hard to imagine that any Bill would have the magic bullet so to speak. The main thrust is to get as many people over the finish line to purchase an EV and I think this is a continuation of that progress.

I for one, would not have purchased an MME had it not been for the tax credit. Say what you want, but I am sure there a few more of me out there in my shoes.

I would guess exactly like you suggested that as technology is improved, the cost comparison ratio to ICE vehicles will surely be a moot point.

 

[Southern92]

Back in 2016 I had been watching the available EV space for a bit, but the tax credit (& BMW blowing out their 2016 i3) is what got me off the fence & into an EV. Now it is the cost ($/mile electric vs $/mile gasoline) that keeps me here.
But truth be told, even though I will not be able to use the entire tax credit, I would not have purchased a Mach-e without it!

 

[67 Stang Convertible]

This is just a guess, but I would guess that they are trying to get more of the "Middle Class" to purchase an EV. I would think that many people that you see driving a Tesla or a car similar are in the upper middle class and beyond. If they really want to get an EV in everyone's garage so to speak, they will need to find more creative ways of finding how the less fortunate people to buy one.

I am not saying I agree with this but rather speculate that this is what they are striving to do. This would be a "progressive tax credit" structure in knowing that Bezos or Buffett and the like don't need this credit to get into an EV. While I fully realize that many on this forum don't reside in that caliber, they had to start somewhere. I am not fully abreast of the proposed Bill, but it would be nice to see a natural phase down rather than an absolute cut off. If you were only $1 off the cut off, one would be much better off to not go to work one day of the year. You would essentially be saving thousands in that scenario.

Just my 2 cents.

Not sure I follow. If the Tax Credit is available to the EVERYONE why would that limit the Middle Class or Lower Middle Class from purchasing theirs?

Example: So I buy a MME and the guy that picks up my trash or works on a factory floor buys the Chevy Bolt. Everyone is happy and we progress further to the more sustainable future. However, in the scenario as currently constructed with this bill, the Upper Middle Class guy may choose a Non EV (mercedes, lexus or Lincoln) as he/she may not be passionate about EVs or care about sustainability or like many of us just wants a good deal when car shopping.

Just my 2 cents.

 

[DennisD]

Not sure I follow. If the Tax Credit is available to the EVERYONE why would that limit the Middle Class or Lower Middle Class from purchasing theirs?

Example: So I buy a MME and the guy that picks up my trash or works on a factory floor buys the Chevy Bolt. Everyone is happy and we progress further to the more sustainable future. However, in the scenario as currently constructed with this bill, the Upper Middle Class guy may choose a Non EV (mercedes, lexus or Lincoln) as he/she may not be passionate about EVs or care about sustainability or like many of us just wants a good deal when car shopping.

Just my 2 cents.

The tax credit is not available to everyone as it is currently proposed. Not sure why you think it is available to EVERYONE? If Warren Buffet wanted to purchase an EV, he can but w/o the tax credit. If a "Middle Class" person wanted to, they may be priced out of purchasing one if the tax credit is not available.

Now you could make it (as it currently stands) available to anyone that pays Federal Taxes including Warren Buffet. If they were to go that route, it would make this Bill much more costlier and it most likely wouldn't pay for itself in its current structure.

Choose your poison.

 

[sotek2345]

The tax credit is not available to everyone as it is currently proposed. Not sure why you think it is available to EVERYONE? If Warren Buffet wanted to purchase an EV, he can but w/o the tax credit. If a "Middle Class" person wanted to, they may be priced out of purchasing one if the tax credit is not available.

Now you could make it (as it currently stands) available to anyone that pays Federal Taxes including Warren Buffet. If they were to go that route, it would make this Bill much more costlier and it most likely wouldn't pay for itself in its current structure.

Choose your poison.

I am not sure it would really make it costlier. The limits as written only exclude something like the top ~7-8% (give or take a bit). However, because their are limits, some type of investigation and enforcement mechanism need to be put into place. That costs money. I don't have any figures on it, but I wouldn't be surprised if enforcing the income limit costs more than the money saved. The same thing is true for many other government benefits (i.e. welfare, food stamps, SSI, etc.), where the cost of enforcement exceeds the benefits recovered. Note: The enforcement costs are likely shifted elsewhere (like the IRS budget), so they don't show up in the bill to make it score better.

The limit is purely a political move - it isn't intended to reduce the actual cost of the program at all.

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