Update on Mach-E launch progress from engineering friends in Mexico

[dbsb3233]

Actually that is not true. Market value means what the average SELLING price is and NOT what you may pay. If the car is listed for $60,000 in the same or nearby zip codes then that is the market value. This is THE why dealerships mark up Raptors. It does not matter what you pay but rather what the car sells for new or used.

Incorrect. Granted, tax credits are an unusual situation that make it hard to find a normal comparison for. But what matters is what a buyer is willing to pay. Just ASKING is meaningless if you don't find buyers willing to pay it.

What most buyers are paying right now is MSRP minus tax credits.

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[macchiaz-o]

I wonder if that statement is accurate. It is my understanding that the federal EV tax credit does NOT reduce the cost of purchasing an EV immediately. The federal tax credit for EVs is a maximum of $7,500, that will/may appear as a credit once one has filed his/her federal taxes. And, that FULL $7,500 will only appear if one has paid at least $7500 in federal taxes.

Source: https://nationaltaxreports.com/tax-credits-for-electric-cars/

I was referring to the sale value of a Mach-E, not it's literal purchase price.

You are correct that the federal tax credit, including how you qualify for it and how you claim it, is between you and the IRS, and not between you and the dealer.

 

[dbsb3233]

I wonder if that statement is accurate. It is my understanding that the federal EV tax credit does NOT reduce the cost of purchasing an EV immediately. The federal tax credit for EVs is a maximum of $7,500, that will/may appear as a credit once one has filed his/her federal taxes. And, that FULL $7,500 will only appear if one has paid at least $7500 in federal taxes.

Source: https://nationaltaxreports.com/tax-credits-for-electric-cars/

That just affects the timing of the cash flow. Even though the tax credit doesn't get realized until you file your taxes, the purchaes decision is still based on the amount adjusted for tax credits.

 

[engnrng]

That just affects the timing of the cash flow. Even though the tax credit doesn't get realized until you file your taxes, the purchaes decision is still based on the amount adjusted for tax credits.

This may sound like a repeated, redundant, restatement of what has already been posted several times. "Even though the tax credit doesn't get realized until you file your taxes" unless you are smart instead! The next quarterly Federal tax estimate payment I make after I put my MME into service, I will reduce the amount by $7500. Realized then, not a year or more later! I mean really - why wait? Do you have withholding from a paycheck instead of paying estimates? Increase Federal exemptions to increase your take home pay to "realize" your tax credit while you are making your first few payments.

 

[eastern refugee]

I wonder if that statement is accurate. It is my understanding that the federal EV tax credit does NOT reduce the cost of purchasing an EV immediately. The federal tax credit for EVs is a maximum of $7,500, that will/may appear as a credit once one has filed his/her federal taxes. And, that FULL $7,500 will only appear if one has paid at least $7500 in federal taxes.

Source: https://nationaltaxreports.com/tax-credits-for-electric-cars/

BINGO!!!! You can ONLY get $7500 tax credit you OWE $7500 in taxes. If you owe $109 then you get $100. The tax credit has ZERO to do with market value.

 

[Woeo]

BINGO!!!! You can ONLY get $7500 tax credit you OWE $7500 in taxes. If you owe $109 then you get $100. The tax credit has ZERO to do with market value.

Some people can be really dense. Take an economics course.

The vast majority of people buying this car intend to claim the full federal credit. They understand their cost to be the nominal price charged by Ford less the tax credit(s) they expect to claim.

There may be some who will buy this car who are not be able to take advantage of the full tax credit. Most of this small set of buyers will have made an error in understanding the tax rules and valued the car expecting to claim the full credit. A few will knowingly value the car at the price paid less the credit claimed despite it not being the full $7500.

Those few transactions will move the average price higher, but the increase will not be significant. More of an impact will be the transactions with xplan discounts driving the market value down.

The fed tax credit is a mechanism to distribute federal funds to each manufacturer that commits to selling electrified vehicles. The scheme is meant to allow the government to avoid meddling in decisions regarding a manufacturer's choice to offer EVs, while tying the funds distribution to the actual sale of EVs. The manufacturer is incentivized to offer EVs they believe consumers will buy to gain access to the funds.

The manufacturer knows the customer will claim the credit, so they offer the car at what they think the market will bear plus the value of the incentive. The customer knows they will get the credit so they are willing to pay a higher nominal price for the car because they expect to get the credit later. The consumer's decision to purchase the car is made bearing in mind that the credit exists.

 

[dbsb3233]

This may sound like a repeated, redundant, restatement of what has already been posted several times. "Even though the tax credit doesn't get realized until you file your taxes" unless you are smart instead! The next quarterly Federal tax estimate payment I make after I put my MME into service, I will reduce the amount by $7500. Realized then, not a year or more later! I mean really - why wait? Do you have withholding from a paycheck instead of paying estimates? Increase Federal exemptions to increase your take home pay to "realize" your tax credit while you are making your first few payments.

Yes, I just didn't want to make it any more wordy than it needed to be. Realized "when you file your taxes -or- throughout the year if you adjust your withholding".

For me it's the former as I'm retired. I always project my quarterly estimated tax payments accordingly, of course.

 

[dbsb3233]

Some people can be really dense. Take an economics course.

The vast majority of people buying this car intend to claim the full federal credit. They understand their cost to be the nominal price charged by Ford less the tax credit(s) they expect to claim.

There may be some who will buy this car who are not be able to take advantage of the full tax credit. Most of this small set of buyers will have made an error in understanding the tax rules and valued the car expecting to claim the full credit. A few will knowingly value the car at the price paid less the credit claimed despite it not being the full $7500.

Those few transactions will move the average price higher, but the increase will not be significant. More of an impact will be the transactions with xplan discounts driving the market value down.

The fed tax credit is a mechanism to distribute federal funds to each manufacturer that commits to selling electrified vehicles. The scheme is meant to allow the government to avoid meddling in decisions regarding a manufacturer's choice to offer EVs, while tying the funds distribution to the actual sale of EVs. The manufacturer is incentivized to offer EVs they believe consumers will buy to gain access to the funds.

The manufacturer knows the customer will claim the credit, so they offer the car at what they think the market will bear plus the value of the incentive. The customer knows they will get the credit so they are willing to pay a higher nominal price for the car because they expect to get the credit later. The consumer's decision to purchase the car is made bearing in mind that the credit exists.

Well said. I'd just add a couple of words to this sentence:

"The scheme is meant to look like the government is avoiding meddling in decisions regarding a manufacturer's choice to offer EVs"

When of course, meddling in those decisions is exactly what the government is doing. Just not as obviously as the even more heavy-handed CAFE, and the outright ICE bans.

 

[malba2366]

Tax credits have ZERO impact on market value. If you buy a car and put down $7500 in cash does that mean that the value drops by $7500??

In this case the tax credits will (indirectly) affect resale because Ford will have to drop the price to remain competitive once the tax credits are gone.

 

[dbsb3233]

In this case the tax credits will (indirectly) affect resale because Ford will have to drop the price to remain competitive once the tax credits are gone.

Yep. Just look at the Bolt. Once GM ran out of credits, Bolts almost immediately started getting a "special discount" of right around $7500 in the US.

 

[ajmartineau]

Some of us don't live in a state with credits for the Mach-E. Also, some of us have income structured so that we will not get the $7500 federal tax credit either. So yes, there are some people paying full price for the car.

I would have gotten the full $7500 credit this year, but I won't even get half of the $7500 Federal Credit next year.

 

[Louv]

Some people can be really dense. Take an economics course.

The vast majority of people buying this car intend to claim the full federal credit. They understand their cost to be the nominal price charged by Ford less the tax credit(s) they expect to claim.

There may be some who will buy this car who are not be able to take advantage of the full tax credit. Most of this small set of buyers will have made an error in understanding the tax rules and valued the car expecting to claim the full credit. A few will knowingly value the car at the price paid less the credit claimed despite it not being the full $7500.

...

Jumping in to add a real world example to the discussion:

In 2020 I bought a Mini Cooper SE. It has a $7500 Fed Tax Credit available to most buyers. I'm not one of those. I didn't have enough income in 2020, and I didn't pay $7500 in Federal income taxes. (I pay plenty of other taxes, just no Federal income tax for the first time in my adult life)

So now, I want to turn around and sell that car (to buy a Mach-E... that's why I'm here). The used market value of my Mini is reduced by $7500 because of the existence of that tax credit.

Same thing will happen to me again with the Mach-E, I will probably not have $7500 in Federal income taxes in 2021, so I can't claim the tax credit. But, as soon as I drive it off the lot, my Mach-E will lose $7500 in value (plus the normal "drive off the lot" depreciation).

I still think the tax incentive is a great idea. Get more people to more quickly adopt a new better technology that people might not otherwise jump into... because in some ways Electric Cars are... Difficult.

#FirstWorldProblems

 

[zhackwyatt]

It is also planned for fixed wireless broadband in more rural areas where dsl/satellite/fm radio are the only options.
Also....wireless broadband in non-rural areas controlled by a different incumbent carrier (i.e. AT&T could use this to provide broadband service in Century Link territory without laying copper/fiber the whole way).

I would think both of those cases are still using low-band 5g. Not the high-band, Gbit/sec speeds of the high-band I was discussing earlier.

 

[Maquis]

Our 62' pickup has been in the family since 67'. Aberation, yes, but one never knows, a first gen EV Mustang may have heirloom appeal.

Wow... what a coincidence! My '53 Chevy 3100 has been in my wife's family since '67. Old iron is really cool!

As far as a daily driver is concerned, I'd still be driving my '00 F150 Lariat if some idiot kid hadn't been driving 60+ on a gravel road and hit me on a blind curve.

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