So is the US federal tax credit for EVs going away?

Discussion in 'General' started by cometguy, Aug 4, 2022.

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  1. cometguy

    cometguy New Member

    USA
    Tony S likes this.
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  3. marshall

    marshall Well-Known Member

    I've only read a small amount of the Inflation Reduction Act so far, but the $4,000 or 30% credit on the purchase price of a used EV was there. That's new money for those buying a used EV.

    In addition, the battery restriction appears to be in two $3,750 parts, battery materials and manufacturing of the battery. Materials that come from countries that have a free trade agreement with us count.

    I've seen other web sites suggest that GM, Tesla and a few others would qualify for at least $3,750.

    Note the money is a big incentive. So even if it takes three or four years to get battery material production up and running, it's still worth doing. We know that Tesla and GM have been sourcing material in North America, so things are already moving in the right direction.

    As a counterpoint, there are folks who say we don't need the credit at all since every EV produced is already sold. So even if there are no EVs that currently qualify for the credit for the next 3 to 4 years, that may not be a such a bad thing.

    I suggest you read the bill which is going to get changed a bit before it gets passed. Enter Clean Vehicles in the search function.

    https://www.democrats.senate.gov/inflation-reduction-act-of-2022
     
    Last edited: Aug 5, 2022
  4. marshall

    marshall Well-Known Member

    Personally, I would either like this bill to pass or pull the plug on the EV tax credit altogether. I can see no point, in subsidizing foreign built EVs and rich people toys.
     
  5. cometguy

    cometguy New Member

    USA
    Well, I think that lots of people (like myself) looking to buy EVs are middle-class, not rich, and these $7500 credits (and state rebates) help a lot and can make a real difference. Like anything technical (think computers in the 1980s vs. now), it costs a lot to buy things early on because it costs a lot for manufacturers to build in early stages. I, for one, think it's in the best interest of everybody (whether you think so or not) for governments to push electric vehicles, solar panels, etc., to get us away from fossil fuels as quickly as possible. This is only a 10-year bill (i.e., everything expires in 10 years, without renewal then, which probably would be unnecessary because EVs and their technology will be cheaper to build and better to own than now). I'm all for having stuff built in America, but there needs to be a phase-in period, and this bill pushes too hard past what's reasonable in that regard (i.e., 40% battery materials made in America by 2024, 100% by 2029). I want to see more EVs on the road sooner, not later. I live very near one of the busiest interstate highways in America (can hear the traffic from our house), and I have a vested interest in getting exhaust fumes reduced as quickly as possible.
     
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  6. bwilson4web

    bwilson4web Well-Known Member Subscriber

    My 76,000 mile, 2019 Tesla Model 3 Std Range Plus will expire its traction battery warranty in about 2-3 years. Already, there have been two subsequent model years with 4-6% better efficiency. But if the lessons learned with LFeP, structural battery pack, and gigacastings are applied, the 2025 Tesla Model 3 should be an awesome vehicle.

    As for this bill, I don't feel compulsion to contact my Congress Critters: (1) Rep. Mo Brooks was rejected in the primary for Senate; (2) all but one of the Republicans running for House says anything other than "Trump Won"; (3) retiring Senator Sessions will vote the Republican 'rubber stamp', and; (4) Coach Tuberville ... well he was a losing, lying football coach too.

    Don't waste time trying to teach a pig to sing.

    BTW, I am not a GM fan but their hobbled, fast DC charging Bolt is somewhat affordable:


    Personally, I think a used, BMW i3-REx is a better bargain. You get +72 mi EV range and a motorcycle engine that can sustain 70 mph at 39 MPG for cross country:

    (Avoid the first 2014 model year as there were weak drivetrain mounting bolts.)

    Bob Wilson
     
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  8. marshall

    marshall Well-Known Member

  9. teslarati97

    teslarati97 Well-Known Member

    Almost all of the North American made PHEVs should qualify for the full $7,500. A better option would be to spend on the largest solar PV + battery system you can to get the 30% ITC and buy a qualifying PHEV each year. If you spent $60,000 of eligible solar + battery costs, you could get an $18,000 tax credit (if the bill passes...currently 26% ITC) plus a $7,500 tax credit for the PHEV for 2022.

    Now only if someone could make a North American plant to "recycle" Powerwalls into EV batteries...;)
     
  10. Bruce M.

    Bruce M. Active Member

    EV advocacy groups (like the Big Island Electric Vehicle Assoc., of which I'm a member), generally support the bill and think it will be good for spurring the EV transition overall.
     
  11. ericy

    ericy Well-Known Member

    I suspect that due to FUD related to the tax credits, that sales of many models will tank until there is some clarity.

    The exclusion of foreign-made EVs apparently takes effect when the bill is signed. Which screws people who ordered an ID.4, and they get assigned a car made in Germany as opposed to Tennessee.

    The mineral content bit doesn't take effect until later, and people don't know what the effect of that is either.
     
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  13. marshall

    marshall Well-Known Member

    I thought it says that it happens when the secretary issues the proposed guidance. So anytime between the signing of the bill and Dec 31,2022.

    ‘(B) DEADLINE FOR PROPOSED GUID17 ANCE.—Not later than December 31, 2022, the 18 Secretary shall issue proposed guidance with re19 spect to the requirements under this sub20 section.’’. 21 (2) EXCLUDED EN

    So folks who have a Toyota, Audi, BMW/Mini, VW and others on order need to be aware.
     
    Last edited: Aug 7, 2022
  14. ericy

    ericy Well-Known Member

    There are multiple effective dates for different parts of the bill - the bit you are referring to is the bit that talks about mineral sources.
     
  15. teslarati97

    teslarati97 Well-Known Member

    Final vehicle assembly still has to take place in North America. The very latest will be Dec 31, 2022.

    There is an unofficial list of the vehicles as well.
     
  16. marshall

    marshall Well-Known Member

    The way I read page 375, as soon as the secretary comes up with the regulation and guidance, it includes the battery components too. If it does, there is going to be a bunch of winners and losers.
     
  17. We really need a thread here - OR BETTER, an article by InsideEVs, with the full details of the new credit. Reading some articles from Electrek, it is a bit complex.

    While the main part of the new program goes into effect on Jan 1st 2023, the moment Biden signs the bill, the provision about North American assembly goes into effect. So does this mean that from ~ mid August 2022 through Dec 31st we are under the old 7500 system, aka Chevy Bolt doesn't get any credit, but now the remaining manufacturer's that HAVE the old credit, they must have final assembly in NAmerica? That's what it seems to me. So that would mean current ID4s, Ioniq 5s, etc, none of those would get the credit starting in August? Unless you can get your hands on the new American made ID4s?

    Further, the battery requirements don't go into effect into next year.

    I'd love to see InsideEvs sort this out for all of us, if it can be sorted out.
     
  18. Jimmyjon

    Jimmyjon New Member

    The latest I've read from electrek states that if you can get a signed purchase agreement before the act is signed into law, you can get the tax credit. It's unclear if it will be point of purchase though.

    Senate improves EV tax credit in largest climate bill ever
     
  19. marshall

    marshall Well-Known Member

    That's not the way I read it. I read it as: it goes in effect as soon as the secretary of treasury publishes the regulations and guidelines with a Dec 31, 2022 deadline. So the bill could take effect this year.
     
  20. I've seen that too, but good luck getting that for an Ioniq 5 (etc.) in the next week or two. For me this is the worst possible outcome, as I needed to wait until Oct 1st in order to get a local air district rebate. I could move forward to *try* and get the $7500, but then loose the $4500 air district rebate, but I don't like the chances of actually getting anything w/o huge dealer markup.

    I don't know. It was my read as soon as its signed the FIRST part about N America assembly goes into effect immediately, thereby killing Ioniq 5, etc., on that day.

    One thing this might do is actually create dealer stock of Ioniq 5 and help eliminate the dealer markups... maybe ... but that's no matter if you want the tax credit / rebate.

    I'm still not exactly clear - *IF* the N America requirement goes into effect on signing, but the rest doesn't - where does that leave the Bolt? Is it still under the old program (so no credit)? That's the worst case scenario I see - that on signing we are essentially still under the old system (so no Chevy, no Tesla) but from that date on, any manufacturers that DO have tax credit remaining would be required to have N America assembly. This would leave the new Tennessee ID4 and not many others.


    So now imagine that if we all, EV enthusiasts and experts, can't figure this out -> where does that put the car salesman at Hyundai or Ford or Toyota, who probably knows nothing about EVs? Someone is going to buy an Ioniq 5 thinking they are getting $7500, and then not get it. Ugly.
     
  21. gosjsgdi

    gosjsgdi New Member

    Now consider that Congress also put the car dealerships on point to administer the instant rebates, which are available or not available on the basis of the customer’s Modified Adjusted Gross Income. This legislation created $80B in new funding for the IRS, and this was the solution that Congress cooked up.
     
  22. Here is a list Consumer Reports has come up with, but they caveat that this could change for the worse when the battery mineral component kicks in:

    Probably:
    • Cadillac Lyriq (only if it is classified as an SUV)

    • Chevrolet Blazer EV

    • Chevrolet Bolt

    • Chevrolet Bolt EUV

    • Chevrolet Silverado EV (with certain options and trim levels)

    • Ford F-150 Lightning (with certain options and trim levels)

    • Ford Mustang Mach-E

    • Nissan Leaf

    • Rivian R1S (with certain options and trim levels)

    • Rivian R1T (with certain options and trim levels)

    • Tesla Cybertruck (with certain options and trim levels)

    • Tesla Model 3 (with certain options and trim levels)

    • Tesla Model Y (only if it is classified as an SUV, and only with certain options and trim levels)

    • Volkswagen ID.4 (only 2023+ models made in Tennessee)
    NOPE:
    • Audi E-Tron

    • Fisker Ocean

    • Genesis GV60

    • Hyundai Ioniq 5

    • Hyundai Ioniq 6

    • Hyundai Kona Electric

    • Hyundai Nexo

    • Jaguar I-Pace

    • Kia EV6

    • Kia Niro Electric

    • Lexus RZ

    • Mazda MX-30

    • Mercedes-Benz EQB

    • Nissan Ariya

    • Polestar 2

    • Subaru Solterra

    • Toyota bZ4x

    • Toyota Mirai

    • Volkswagen ID.4 (only certain models)

    • Volvo C40
    TOO EXPENSIVE:
    • Audi E-Tron GT

    • BMW i4

    • BMW i7

    • BMW iX

    • Chevrolet Silverado EV (with certain options and trim levels)

    • Ford F-150 Lightning (with certain options and trim levels)

    • Genesis G80 Electric

    • GMC Hummer EV

    • Lucid Air

    • Mercedes-Benz EQE

    • Mercedes-Benz EQS

    • Porsche Taycan

    • Rivian R1T (with certain options and trim levels)

    • Tesla Cybertruck (with certain options and trim levels)

    • Tesla Model S

    • Tesla Model X
     
  23. Jim Matthews

    Jim Matthews Active Member

    This should reverse a trend toward fewer larger, more luxurious vehicles back to the original premise of many smaller, affordable vehicles.

    For broad adoption to take place, EVs need to be about 1/2 the average asking price today. $60,000 for an SUV isn't widely affordable.

    While many may question Manchin's motives, this aligns very neatly with supporting American companies with taxpayer support.
     
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