New bill to remove limit for $7.5k electric vehicle federal tax credit

Discussion in 'General' started by jvmoore1, Jul 2, 2018.

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  1. jvmoore1

    jvmoore1 New Member

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  3. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    To summarize: A Democratic party congresscritter is gonna introduce a pro-"green" bill to a congressional committee, in the hope that it will be approved and actually get to the floor of the chamber and get voted on... in a highly polarized Congress which is partly if not mostly dominated by far-right anti-"green" GOP members.

    (I don't intend that as a partisan political comment; it's just an observation of the reality.)

    I will be very, very surprised if that bill goes anywhere. In fact, unless the committee has a majority of Democrats, I think it's very unlikely it will ever make it out of committee.

    And really, it isn't my intent to start a political fight here. If anyone is offended by my remarks, then I sincerely apologize.

  4. altfuelcarguy

    altfuelcarguy Member

    I think the fact that GM and Tesla are the two companies most likely to be harmed, and that they produce their evs in the US, will carry significant weight with otherwise anti-green Republicans. The tax credit will end without legislation. It makes more sense to try to pass it than to give up due to fear of failure.

    Sent from my SM-N910V using Inside EVs mobile app
  5. No committee has a majority of Democrats on it that I'm aware of. It's set up that way on purpose.
  6. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Battery prices, the original justification, are going down so the incentives should go down too. I would be perfectly happy if the Tesla tax credit ramp down became universal for the whole program.

    The early EV adopters 'kick started' battery manufacturing improvements so let the laggards face the music.

    Bob Wilson
    WalksOnDirt likes this.
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  8. ekutter

    ekutter Member

    Does anybody know how it got tied to number of vehicles for each manufacturer in the first place? It would have made much more sense to have a limit for all manufacturers combined, to incentivize early development. The way it is now, it will effectively reward companies that have waited for the tech to mature and come down in cost.
  9. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Then there ought to be a Republican to sponsor such a bill. Either a Republican or bipartisan sponsorship (the latter does still occasionally happen, thank goodness!) would give it a much better chance of actually becoming law, at least until the mid-term elections (probably) shift the majority to the Democrats.

  10. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Politics isn't the art of getting things done in a way that is straightforward, logical, and sensible. It's the art of compromise, and compromise often means getting things done in a way that seems strange or overly complex or perverse... or even absurd.

    I think that very nearly every EV supporter wishes the law was written differently, but we're stuck with what we have. In a less partisan political climate, Dems and GOP members could work together to change the law into something that works better. Sadly, the chances of that happening this year or next appear to be slim or none. :(

    I just don't see the GOP hard-liners supporting a measure that would promote "green" tech by extending the EV tax credit, even if that would improve sales for both General Motors and Tesla Inc. And I don't see such a bill passing with neither bipartisan support nor broad support from nearly all the GOP, including the hard-liners.

    I would be very, very happy to be proven wrong on this subject!
    Last edited: Jul 3, 2018
  11. interestedinEV

    interestedinEV Well-Known Member

    Let us realistic about how this is going to play out among the people who really need to support it. The current administration's (and Republican Leadership) position is
    1) That doing something about global warming is not a priority (or that it is even needed)
    2) Fuel Efficiency standards, should be weakened as they are restrictive, onerous and not likely to meet the objectives
    3) That such tax credits are give away's to corporations and to the elite (people who many not vote for them anyway). If a person does not have $7,500 in taxes then they get no or little benefit. (A family with an income of $50,000 or less is not likely to have so much taxes that will give them a benefit. If they have a home mortgage, the income number goes up so slightly, so this credit really benefits those with higher incomes). Also what are the chances that a family with an income of $50,000 in income will buy a new car costing $35,000 plus?
    4) That one of their key base for supporters and constituents come from those who have connections to the oil industry and that the administration needs to be sympathetic to their needs

    So why support such a measure when it violates their positions on what they believe is good for the USA? There is not going to be much support for this among those who matter unless Elon Musk has enough political capital to make this happen, as the person that is most benefited by this is Elon Musk/Tesla. If Ford does not have a competitive offering, why would they want to support something that could take away their business for example?

    On the other hand, I do believe subsidies (and this is subsidy, make no mistake about it) have only a limited role and is not sustainable on the long run from a fiscal perspective to continue this indefinitely. When the internet took off, internet retailers paid no sales tax. Initially it did not make a difference and did spur innovation, today brick and mortar retailer are struggling and now internet retailers have to compete with brick and mortar based on equal grounds, i.e. taxes being levied. Subsidies initially spur innovation but later on stifle innovation. It is time that the industry grew up and weaned themselves off the tax credits. That said, I do not know if 200,000 cars is a good number, should be 300,000 or whatever?. Or instead should it be based on calendar year ($7500 until 2019, $4000 in 2020... or some such number.)? The issue is that there has to be a sunset clause. I am not a policy wonk to determine what makes sense but we need competition to drive down costs, not subsidies. My 1-c-
    Pushmi-Pullyu likes this.
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  13. Jack

    Jack Administrator Staff Member

    I don't think this has anything to do with being pro-green or anti-green. It has everything to do with the free market. As a strong supporter of capitalism, I abhor these tax credits, especially since Elon did not need them to be successful. I am very happy that the credit is limited per manufacturer, because had it not, the government would have assisted Tesla even more. I find the idea of government supported disruption of industry to be absurd. The credit did what it was supposed to do, the EV market is thriving. It's definitely time for Tesla to stop receiving such benefits. It's simply unfair to use tax payer money to benefit one company over another (e.g. bailouts/credits). I agree this bill will die, as it should.
    Ken7 likes this.
  14. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Obviously this is an issue with no clear-cut right or wrong; it's going to be a matter of opinion. My opinion is that the rebate should continue until such time as EVs are truly competitive with gasmobiles, on the basis of being profitable for the auto maker. Clearly we have not reached that point yet. There are a lot of plans for auto makers to start making EVs starting in 2020; I think the subsidy should continue until at least that date, at which time the situation should be re-assessed.

    Again, just my opinion.

  15. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    Not to argue that two wrongs make right, but isn't it even more unfair that trillions of dollars in U.S. taxpayer money goes to support using the U.S. military to fight foreign wars in the Mideast, protect our overseas oil supply lines from that region, and to prop up despotic regimes which oppress their own people and keep all the oil income for the aristocracy in those Arabian countries, all for the benefit of Big Oil and to keep the gasoline price at American filling stations artificially low?

    The amount of tax money spent on the EV subsidy is minuscule by comparison. If there wasn't a massive indirect subsidy for Big Oil, there there absolutely would be no need for any EV subsidy, small or large, and most of us would have been driving EVs decades ago.

  16. interestedinEV

    interestedinEV Well-Known Member

    That position that EV need help to reach mass market levels is true. That position the rebates help is true. However, the rebates cannot be infinite as you have pointed out and that there are others ways to force manufacturers to go emphasize EV's. Fuel standards for example. The US may not do it, but other countries are and this is might force innovation. I am for extending it but it has to have a sunset clause. Manufacturers have to learn to reduce cost to compete.
  17. bwilson4web

    bwilson4web Well-Known Member Subscriber

    Now if we could just get some of those fuel cell subsidies redirected to BEV production.

    Bob Wilson
  18. Ken7

    Ken7 Active Member

    Uh huh. I can't tell you how many people on the Tesla forums said the same thing about the continuation of the tax credit when it was up for renewal after Trump had won. All I heard were the endless 'Oh, the Reps will kill it, they hate the environment, clean water, clean air...bla bla bla, all the left wing talking points. So what happened? It passed.

    I don't mean that as a partisan political comment either, just a rehash of history. ;)
  19. Ken7

    Ken7 Active Member

    Here here! Some common sense and much appreciated. Although I was glad to take the $15,000 total handout (and we're not even talking about state giveaways) when I bought my Tesla & Clarity, it was and is unfair. It's funny that some on the left that argue for this tax credit, don't see that it's actually the wealthy who benefit from it. If you can afford a Tesla, do you 'really' need a $7,500 handout? Yet I'd be a fool for not taking it if the Government is giving it to me.

    It really has less to do with 'green' and more to do with 'fair'.
    Jack likes this.
  20. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    • crossing line, no politics especially in response
    Huh? It was not "up for renewal" and nothing new was passed. The GOP tried to kill the existing law in the omnibus budget bill, but the Dems negotiated that away.

    Let us stick to the facts, please.

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  21. Jack

    Jack Administrator Staff Member

    Careful, guys
  22. Pushmi-Pullyu

    Pushmi-Pullyu Well-Known Member

    It never ceases to amaze me when EV advocates argue that Tesla cars should not benefit from the EV tax credit. Just what would be the state of the art of EVs today if Tesla wasn't around? It was Tesla who inspired GM to make the Volt, and inspired Nissan to make the Leaf.

    Without Tesla, I think it's safe to say that mass produced EVs would not have been seen for about another five years, and even after that, things would have progressed very slowly. It was Tesla that made EVs "cool", sexy and desirable. Without Tesla, the image of an EV would still be a car which "only tree-huggers could love" like the Prius!

    Without Tesla, what would the EV market look like today? It would be the i-MiEV and perhaps a few similar cars, and a few compliance cars from several auto makers. That's all. No Chevy Bolt EV, no Jaguar I-Pace. Perhaps Nissan would eventually have put the Leaf into production, maybe five years later than it did. So the Leaf would perhaps have debuted in 2015 and we'd be up to the equivalent of the 2013 model year by now.

    Now, how in the world can any EV advocate claim this would benefit those who are not rich?

    And here's another reason that argument is totally wrong-headed: Those in the lower income classes never buy new cars; they only buy used cars. So those expensive new EVs need to have been on the market for at least a few years before they start appearing on the used car market... which is when those who could never afford a Tesla car might be able to start looking at used EVs. Furthermore, the fact that the more expensive EVs get that same tax credit means that their resale value is lower... which again benefits the less wealthy who only buy used cars.

    Please, EV lovers, please! We need to put our thinking caps on here, and apply some critical thinking before we start complaining about "rich" people benefiting from the EV tax credit.

    The purpose of the tax credit wasn't to benefit the poor or the middle class over the rich. The purpose was to give an incentive to auto makers to start mass producing EVs. The fact that the incentive was set up to use taxpayers as the middleman for "priming the pump" of EV production should not distract us from the actual purpose of that tax credit.

    Tesla Motors aka Tesla Inc. is exactly the company which should benefit the most from the tax credit, not benefit the least!

  23. Jack

    Jack Administrator Staff Member

    Just for the record I don't think any company should benefit from the credit- I don't think it should exist- but since companies do benefit, I'm glad theirs a fair limit for the incentive across all companies. I still believe Tesla would have made EVs cool without tax benefits. Natural growth is often slower, but it's naturally fair.
    Ken7 likes this.

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