generaltso

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Thanks. Can you translate paragraph 3? I still can’t tell what it’s saying about the per vehicle dollar limit.

Edit: From what I can tell, the section of the old code that paragraph 3 is referring to is describing the manufacturer phase out after hitting 200k units. Could it be that this section of the new bill is saying that the MSRP limit doesn't apply to manufacturers that haven't hit that limit yet?
 
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Travman1974

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Thanks. Can you translate paragraph 3? I still can’t tell what it’s saying about the per vehicle dollar limit.
If I am reading it correctly, this is related to the battery mineral and component requirements. The Secretary of the Treasure will provide guidance to MFG on how to report the battery mineral and components to the IRS. Once the guidance has been provided it will go into effect. There is a requirement that the guidance be provided by 12/31/22.

If guidance is provided early the requirement can go into effect before the end of the year.

I don’t think the MSRP requirement goes into effect until 1/1/2023
 

Shelbeast

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But did you sign a “binding contract?”

Doubtful, because that’s not how people buy cars. You may have a signed purchase price agreement, but it’s non-binding. They can’t force you to buy the car at this point.

But according to the above what you quoted, it only matters if you car isn’t delivered until 2023.
Yes! What I was looking for. The cut off.
 

Shelbeast

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But did you sign a “binding contract?”

Doubtful, because that’s not how people buy cars. You may have a signed purchase price agreement, but it’s non-binding. They can’t force you to buy the car at this point.

But according to the above what you quoted, it only matters if you car isn’t delivered until 2023.
"that’s not how people buy cars.". Then why is it in the bill language if no one does it.
 

mkhuffman

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Mach1E

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"that’s not how people buy cars.". Then why is it in the bill language if no one does it.
That’s a great question.

And just one of many issues of writing 8,000 page bills into law.
 

mkhuffman

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Seems like Lucid has figured it out.

Ford Mustang Mach-E Senate Bill Deal to Expand EV Tax Credits (7/27/2022) Screenshot_20220811-190708_Drive
 

Mach1E

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DRuth086

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I know things are still up in the air, but I thought this snippet of the latest Times article about this was somewhat hopeful:

“Some of the restrictions on eligibility for a tax credit may not be as strict as they appear and may be up for interpretation. For example, Ms. Stabenow said, it appeared that the $7,500 credit would be valid for all manufacturers through next year before content restrictions kicked in.”
 
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generaltso

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I know things are still up in the air, but I thought this snippet of the latest Times article about this was somewhat hopeful:

“Some of the restrictions on eligibility for a tax credit may not be as strict as they appear and may be up for interpretation. For example, Ms. Stabenow said, it appeared that the $7,500 credit would be valid for all manufacturers through next year before content restrictions kicked in.”
I've seen several articles claim that the battery component and mineral requirements won't apply until 2024, but I don't know where they're getting that. The bill says that the percentage requirement will apply after the Secretary issues guidance.

Ford Mustang Mach-E Senate Bill Deal to Expand EV Tax Credits (7/27/2022) 1660308207081


And the referenced paragraph says that the Secretary will issue guidance by December 31, 2022.

Ford Mustang Mach-E Senate Bill Deal to Expand EV Tax Credits (7/27/2022) 1660308433168
 

dbsb3233

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I know things are still up in the air, but I thought this snippet of the latest Times article about this was somewhat hopeful:

“Some of the restrictions on eligibility for a tax credit may not be as strict as they appear and may be up for interpretation. For example, Ms. Stabenow said, it appeared that the $7,500 credit would be valid for all manufacturers through next year before content restrictions kicked in.”
Either she didn't read the bill, or is blowing smoke. The content restrictions are only one piece of it. The North America assembly restriction kicks in immediately. That excludes many popular EVs, like the EV6, Ionic5, Taycan, etron, XC40 Recharge, and others.

And of course the MSRP limits wipe out a number of models too. I think those start 1/1/2023, IIRC. All Lucids, most Rivians, fully-loaded Lightnings, etc.

Unless the IRS just decides to not enforce the restrictions spelled out in the bill, or someone directs them not to with waivers or something.
 
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dbsb3233

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US tax credits are “biased against foreign companies?”

LOL.

So is…….. every tariff ever. Kinda a non-story. Now if it does violate trade agreements, that’s a different story.
I think the issue is more of "how will they retaliate?". Tarriffs and selective taxation and other special treatment to favor domestic products over foreign is a constant juggle. When we disfavor their automobile imports, they may disfavor our corn imports (or something else).
 

Mach1E

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I think the issue is more of "how will they retaliate?". Tarriffs and selective taxation and other special treatment to favor domestic products over foreign is a constant juggle. When we disfavor their automobile imports, they may disfavor our corn imports (or something else).
Maybe? It’s more of a subsidy than a tariff.

They are free to build their cars here too if they want the subsidy. Unfortunately because things just plain cost more here, we have to use taxpayer dollars to convince people to do this.

Or (in simple macroeconomic terms) it’s way better to not try to convince people to use us for things we are less efficient at doing. Buy cheap batteries from China and focus on other industries we actually are better at.
 

dbsb3233

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Maybe? It’s more of a subsidy than a tariff.

They are free to build their cars here too if they want the subsidy. Unfortunately because things just plain cost more here, we have to use taxpayer dollars to convince people to do this.

Or (in simple macroeconomic terms) it’s way better to not try to convince people to use us for things we are less efficient at doing. Buy cheap batteries from China and focus on other industries we actually are better at.
Yeah no matter the method (tariff, subsidy, whatever), it's all kinda the same. The bottom line is helping domestic and hurting imports. Which sounds good unless you're an industry that counts heavily on exports, and they retaliate. Yin and yang.

Agree in the 2nd paragraph. Domestic production is great, but if it costs a lot more, it can be a net negative for us. Lots of "it depends" in the equation.
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