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

I haven't gotten to the $400 yet on my reservation, but I was told it's fully refundable.

My concern is that if I sign a purchase agreement, that date could preclude me from getting my local air district rebate. The local rebate requires approval before you buy the vehicle. I still think the 2023 will qualify for the $7500 so I'm going to wait.

 

"Average raw material costs for an EV totaled $8,255 per vehicle as of May, up 144% from $3,381 per vehicle in March 2020, led by materials such as cobalt, nickel and lithium – all essential for the production of batteries used to power electric cars and trucks."

https://www.cnbc.com/2022/06/22/electric-vehicle-raw-material-costs-doubled-during-pandemic.html

Even at $10k in raw materials - what accounts for an $80k MSRP?

Take generally similar vehicles on the Hyundai e-GMP platform as an example: much of what EV buyers are paying for is cosmetic.

 

Totally sensible.

Getting rushed into any purchase this size is a red flag warning for financial decisions.

 

It needs to be refined and processed, and the battery modules then need to be manufactured.

I can't explain an 80k$ vehicle, but the battery costs enough ot make it tough to make a 30k$ car.

 

The fact that plenty of affluent buyers can afford a Tesla says precisely nothing about the value of incentives in stimulating EV sales. Many millions of buyers simply can't afford $50K+, or even $40K+, for a car. To get those folks into EVs we still need substantial incentives.

 

Platform sharing is universal in the auto industry. Most of what any car or truck buyer pays for is cosmetic.

 

New bill will probably be signed into law tomorrow.

This should affect all non-domestic EV/PHEVs and the North American final assembly clause will kick in as soon as the bill is signed... which is strange as it should be 2023 like all the others to give time for automakers to adjust.

Many have been scrambling to get binding contracts signed and reservations converted to partial non-refundable deposits to use the exception of being signed prior to the law becoming active.

Good luck.

 

So, if someone signs their binding contract at 10:00 AM this morning, and the bill is signed at 11:00 AM, do they qualify?

 

By the plain language meaning of the words in the legislation, you’d think not. The transition rules refers to purchases and contracts that are binding “before the DATE of enactment,” rather than, say, the TIME of enactment. IMHO, since the dates in your hypothetical example would be the same, the purchase shouldn’t qualify.

Of course, all of this is happening in the sausage-making capital of the country, so I don’t have a hard time believing that some non-literal interpretation is the one that governs, even if it’s not the likely outcome.

 

I think the whole thing is as clear as mud right now. I'm still hearing conflicting details - just about everyone agrees, that when signed, the N American assembly restriction starts. But then the disagreement begins Jan 1st, because some are saying that's when the 40% Battery Pack materials sourcing starts, while I've heard other reports is starts later. Or when guidelines are officially released. This is a ridiculous situation, that you could walk into a dealer tomorrow and not know if a car qualifies. I still think the 2023 Tennessee ID4 is good at least until Jan 1st. But who knows, that's only 4.5 months, and I might not get one in that time. Then Jan 1st, I have no idea what qualifies.

 

I just want to know if the 2023 bolt qualifies ..I can’t seem to find this out

 

That's tricky, but in my very-much-not-expert opinion: maybe?

So the Bolt, right now (yesterday) doesn't qualify. Therefore, starting today, since the bill as signed, it still doesn't qualify. As I understand it, we are under the old program, but with the addendum of requiring N American assembly. So being still the "old", Chevy still doesn't qualify, as they used up their quota.

Now come Jan 1st, the Bolt enters the new program, and it DOES have N American assembly - I think.
However, the confusing part then is the battery - originally I read the battery requirements go into effect the start of 2024.
But more recent things I have read actual split this - the ban on certain sources, such as China, goes into effect in Jan 2024, but the requirement for 40% Free Trade supplies for the pack goes into effect Jan 2023. Or maybe i have this backward? CBO, or someone, is estimating only 11,000 EVs will qualify TOTAL in 2023. So clearly there must be some new requirement going in, otherwise we would be talking hundreds of thousands for N America assembled.

Take this all with a huge grain of salt.

 

The administration needs to put out clear, specific guidance ASAP. The present confusion is bad for everyone involved. And a lot of people who aren't EV nerds barely knew how the old program worked. I just had to explain to an acquaintance that a tax credit is very different than a tax deduction.

 

The administration is busy making money and has no time to focus on this, the most effective way to solve the problem is to rely on ourselves

 

Here is initial guidance:

Alternative Fuels Data Center: Inflation Reduction Act of 2022 (energy.gov)

Make sure you check your VIN.
I don't see the 2023 ID4 listed there, but I'm hoping that's just because it isn't out yet.

Then, in 2023:

" New restrictions on battery and mineral sourcing and price and income caps take effect on Jan. 1 that will make all or nearly all EVs ineligible, the auto group said. The new sourcing rules will rise annually. "


Then in 2024:
"In 2024, EV buyers can transfer credits to dealers at the point of sale to reduce purchase prices.

Also in 2024, rules take effect making vehicles ineligible if they have content from a "foreign entity of concern," a provision aimed at barring Chinese content. The administration must write rules detailing what countries and companies are covered."

U.S. says about 20 models will get EV credits through end of 2022 (yahoo.com)

 

The way I read it, any GM vehicle that satisfy the battery and final assembly requirements will qualify on/after 1/1/23... including the 23 Bolt (and 22 Bolts if any are still available).

If you take delivery before 1/1/23, it does not qualify under the old sales cap limitation.