Tax Credit Killed in 2020

[Geor99]

The average cost of a single-family home in greater Los Angeles is $579,500. - so these 60 houses were a bargain.

I apologize. I wasn't trying to get political. I thought that it would be universally agreed upon that buying 1/2 million dollar homes for 60 families, while there are an estimated 60,000 homeless people in Los Angeles (costing a total of $31 million,) was a bonehead move.

Perhaps I am wrong, and some see that as a wise move.

I apologize for getting off of the topic of speculating on whether the ev credit will continue.

 

[Bender]

I got the $7,500 credit to buy the Clarity but i personally don't think the tax credit is not a good way to "spend tax payers money".

1. the people that need the credit most (lower income family) would not quality to get the full $7,500 amount due to their income.
2. Luxury Car owners should not be able to get any credit. If you can afford a Tesla, you don't need the credit.

This could have the same effect of encouraging ev use by making the people who burn gas pay closer to the true cost of burning the gas. (This assumes that these external costs(if any) can be somewhat accurately calculated. )

I dont agree with the logic to subsidize evs. Giving people, who are wealthy enough

I have to disagree with you both and point out a different way to at least look at it.

Adoption of EVs could not have been the intent of the tax credit. Research and Development of EVs by necessity has to come before widespread adoption.

R&D is very high for the initial units, and once you're up and running the incremental costs are much lower. That directly fits with the # of vehicles limited per manufacturer. It means every manufacturer is given a fairly equal amount of assistance in R&D costs, rather than it all going to whichever single manufacturer got up and running first (and/or advertised best first) and then could have established itself as a monopoly with no competition. IMO, it's much more effective to subsidize the small numbers of initially produced vehicles than to have added a really small increase in price to the vast numbers of existing vehicles if the goal is to get EVs fielded and ready to compete in the market.

For a similar reason -- (just like is brought up with the Clarity) -- as these are the initial runs of vehicles, I don't think the low income people would be the best to subsidize these purchases. Aside from being viewed as a complete handout rather than a reduction in collected taxes... Do you really think low income are the best group to take on the additional risks? Higher repair costs, possibly higher insurance costs, etc, etc. Potentially longer repair times (as evidenced in these forums), more complicated and unusual features, the list goes on... IMO, incentivizing low income purchasers to take on these high risks is a terrible idea.

As there were no competitive EV options, increasing taxes or damage recovery fees on gasoline would NOT have really done anything to encourage EV development. It would have just made people spend more on vehicles and/or gravitate to more fuel efficient ICE vehicles.

 

[Kerbe]

The average single-family home in Los Angeles isn’t a shipping container.

Nobody said they were TRENDY! Shipping container homes are worth premium prices!

 

[Agzand]

I apologize. I wasn't trying to get political. I thought that it would be universally agreed upon that buying 1/2 million dollar homes for 60 families, while there are an estimated 60,000 homeless people in Los Angeles (costing a total of $31 million,) was a bonehead move.

Perhaps I am wrong, and some see that as a wise move.

I apologize for getting off of the topic of speculating on whether the ev credit will continue.

It is a bonehead move. If you are wondering why these things happen, follow the money. Some contractor pocketed the money to build the houses, or some non-profit paid 6 figure salaries to a bunch of people.

 

[Landshark]

Adoption of EVs could not have been the intent of the tax credit. Research and Development of EVs by necessity has to come before widespread adoption.

Wouldn’t it be more logical to subsidize the companies equally and directly to help offset their R&D costs? They could then, offer these cutting edge, technological marvels at competitive prices.

When credits and incentives are offered to the consumer, widespread adoption of the product is being pushed at the retail level.

One example, in Oregon, is that a $2500 rebate is available to buyers of EV’s in order to get more EV’s registered in the state.

 

[Landshark]

Nobody said they were TRENDY! Shipping container homes are worth premium prices!

You could be on to something here.

In the RV world, a phrase that is often heard is, “We spend a lot of money to live like a homeless person.”

 

[Geor99]

What I find confusing about this ev credit is: why dont more people take advantage of it?

It boggles my mind why there are not sub $21k Clarities (net after Fed and many State incentives) all over the place.

I have to disagree with you both and point out a different way to at least look at it.

Adoption of EVs could not have been the intent of the tax credit. Research and Development of EVs by necessity has to come before widespread adoption.

R&D is very high for the initial units, and once you're up and running the incremental costs are much lower. That directly fits with the # of vehicles limited per manufacturer. It means every manufacturer is given a fairly equal amount of assistance in R&D costs, rather than it all going to whichever single manufacturer got up and running first (and/or advertised best first) and then could have established itself as a monopoly with no competition. IMO, it's much more effective to subsidize the small numbers of initially produced vehicles than to have added a really small increase in price to the vast numbers of existing vehicles if the goal is to get EVs fielded and ready to compete in the market.

For a similar reason -- (just like is brought up with the Clarity) -- as these are the initial runs of vehicles, I don't think the low income people would be the best to subsidize these purchases. Aside from being viewed as a complete handout rather than a reduction in collected taxes... Do you really think low income are the best group to take on the additional risks? Higher repair costs, possibly higher insurance costs, etc, etc. Potentially longer repair times (as evidenced in these forums), more complicated and unusual features, the list goes on... IMO, incentivizing low income purchasers to take on these high risks is a terrible idea.

As there were no competitive EV options, increasing taxes or damage recovery fees on gasoline would NOT have really done anything to encourage EV development. It would have just made people spend more on vehicles and/or gravitate to more fuel efficient ICE vehicles.

You make some good points. Like I said before, the ev credit isn't the worst giveaway on the long list of Federal giveaways.

 

[su_A_ve]

What I find confusing about this ev credit is: why dont more people take advantage of it?

It boggles my mind why there are not sub $21k Clarities (net after Fed and many State incentives) all over the place.

Cause Honda dealers have no clue on how to sell them. Trying to educate the customers takes too long. They come in and ask for an Accord, so they just give them the keys to go test drive.

 

[Ev050]

Let's not blame Trump for not extending the EV production credit for Tesla and GM.

If we look at the other manufacturers, Honda still has a long way to go before depleting the credits - for many years to come.

Honda has a good future, if they would continue production of new EV models...

Honda EV’s? What? You mean PHEV’s


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[insightman]

Honda EV’s? What? You mean PHEV’s

I assume you drive a Honda that has a BEV sibling.

When I get my electric MINI Cooper SE soon, I'm going to drive it to Honda's Ann Arbor R&D office before the employees come to work, find a parking place near the entrance to their employee lot, and stand next to my MINI with a sign, "Will Trade MINI Electric for Honda e."

 

[Pushmi-Pullyu]

But then the City of LA is a full on liberal, illegal immigrant laden, sanctuary city - one of many reasons I left years ago....

More proof that California's unapologetically liberal legislative agenda is working.


Fortunately, some of us -- and not just Californians -- still think that "liberal" isn't a dirty word.

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[Pushmi-Pullyu]

Honda EV’s? What? You mean PHEV’s

1. Honda has the Clarity Electric, which is a BEV.

2. The "EV" in "PHEV" means exactly the same thing as the "EV" in "BEV".

Great Flying Spaghetti Monster save us from "EV purists" who think only BEVs qualify as EVs!

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[Pushmi-Pullyu]

Wouldn’t it be more logical to subsidize the companies equally and directly to help offset their R&D costs?

Common sense says yes, but experience shows otherwise. In Europe, where some countries have given direct subsidies to auto makers for their PEVs (Plug-in EVs), this has resulted in those auto makers simply raising the price of those cars to offset the subsidy.

It seems like a rather inefficient and roundabout approach to give the subsidy to the buyer of a plug-in EV rather than the manufacturer, but that was actually the best approach. The boneheaded one was to allot a specific amount to each individual auto maker, rather than putting it all into a pool and letting them take it out until it was gone.

Most of the pool of money should have gone to reward the first movers, who have shouldered most of the R&D resource expenditures of bringing down the costs of making PEVs. As it is, the late comers will be rewarded even more than the first movers were.

 

[Bender]

Wouldn’t it be more logical to subsidize the companies equally and directly to help offset their R&D costs? They could then, offer these cutting edge, technological marvels at competitive prices.

Problem there is what is the completion milestone, and who will make the qualitative judgement that the milestones were reached? In retrospect, actually sold vehicles seems like a fairly elegant solution to this accountability.

But this is the exact opposite. This is saying "You snooze, you get the prize." The first movers spent the R&D to bring down build costs for BEVs, and now the late-comers are reaping the benefits of those lower costs while still getting as much in the way of incentives as the first movers, GM and Tesla.

Agree with it or not, generally the idea is it's not in the public's interest to have a sole source available (monopoly). Similar logic is applied with government contracts for critical projects, where they may fund 2 or more competitors (at different costs) so that long term there will hopefully be competition keeping things in check.

 

[Landshark]

Problem there is what is the completion milestone, and who will make the qualitative judgement that the milestones were reached? In retrospect, actually sold vehicles seems like a fairly elegant solution to this accountability.

It would probably be the same government entity that devised the subsidy in the first place. That being the case, I would tend to agree that we would have a serious problem. The USG doesn’t have a very good record of making wise decisions, particularly where finances are involved. That’s not the only area and this isn’t a recent development.

That said, a $7500 tax credit at the retail level, essentially allows a manufacturer to sell a vehicle for $7500 more than they might otherwise. Even at that inflated price point, it has been widely reported that manufacturers are losing money on these vehicles. So the R&D money is down the drain and they’re not even turning a profit on the vehicles with the new technology.

All going according to plan.

 

[Pushmi-Pullyu]

Agree with it or not, generally the idea is it's not in the public's interest to have a sole source available (monopoly). Similar logic is applied with government contracts for critical projects, where they may fund 2 or more competitors (at different costs) so that long term there will hopefully be competition keeping things in check.

I agree, but I don't agree that having a pool of money (which would be a fixed amount) for incentives for making and selling EVs would be promoting a monopoly. Seems to me it would encourage competition among auto makers, to grab as much of that money as possible before (to mix metaphors) the well runs dry!

And while that's only my opinion, I've seen the same opinion expressed rather frequently on EV forums by a large number of people.

​

 

[Geor99]

I agree, but I don't agree that having a pool of money (which would be a fixed amount) for incentives for making and selling EVs would be promoting a monopoly. Seems to me it would encourage competition among auto makers, to grab as much of that money as possible before (to mix metaphors) the well runs dry!

And while that's only my opinion, I've seen the same opinion expressed rather frequently on EV forums by a large number of people.

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I think that I get your point. It is like saying that Neil Degrass Tyson is an intelligent man, yet his admitted sexual harrassment (and alleged but unproven rape) of women was foolish.
Sorry, thats my attempt at humor

Let's let this end. I was just suggesting a softer tone in your opinions; but you are free to write whatever you want as far as Im concerned.

 

[NocEdit]

Anyone know when Turbo Tax will have the Energy efficient tax forms for the $7500 rebate? I was excited about doing my taxes since I got my W2 in this week... it alas... I can’t file. Because turbo tax says the rebate forms haven’t been finalized yet from the IRS.


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[Pushmi-Pullyu]

Let's let this end.

Yes, please. I was already planning on answering any further posts on this subject in this thread with an "I think I'll stand on what I've already said" comment. So on that, at least, we're in agreement. I think I've stated my position rather thoroughly, and it's all off-topic for an EV forum anyway.

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[DucRider]

Anyone know when Turbo Tax will have the Energy efficient tax forms for the $7500 rebate? I was excited about doing my taxes since I got my W2 in this week... it alas... I can’t file. Because turbo tax says the rebate forms haven’t been finalized yet from the IRS.

The 2018 form was released by the IRS on 1/28/2019. Obviously no guarantee for the 2019 form, but a point of reference. I think TT was a week or two behind the IRS release to get it into the program.
And it is not a "rebate". It is a non-refundable tax credit which means it doesn't roll over and if your tax liability is <$7500 you won't be able to fully utilize it - it does not mean you will not get a refund check.