Good Bye $7,500 tax credit!

[Torv]

This new bill passed senate, targeted to benefit low/medium income families and American economy. They have so many limits:

1) Income limit (150K for individual and 300K for family) - excludes folks with high income
2) Price limit - sedan 50K and suv 80k, removes luxury segments
3) Car to be manufactured in US and battery parts to be supplied from US and allies. - boost US economy.

Sad part is that Taycan won’t satisfy (2) and (3) if not all three.

This means this is the end for us to enjoy the $7,500!

Not sure anyone bummed to see this go or care much about it, but I do feel disappointed that I won’t get an additional saving of $7,500 as I am yet to get my allocation.

Personally, I did take advantage of the tax credit as it was there for the taking for this year’s taxes. But was it socially responsible to do so? That’s debatable.

I would have bought my Taycan regardless of the $7500 tax credit. Is it fair for those of us who can afford a $150K+ Porsche to gain a tax benefit we seriously don’t need when making the tax credit available to more people and having more EVs on the road benefits everyone?

Let’s be real here—we’re extremely lucky to be able to afford our Taycans, tax credit or no tax credit. I’m delighted that Congress finally passed something to upgrade the pathetic infrastructure in the US and benefit the environment. It’s about time!

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[Tooney]

Let’s be real here—we’re extremely lucky to be able to afford our Taycans, tax credit or no tax credit.

People who can afford Taycans are just extremely lucky?
Does that mean people who can't afford Taycans are just unlucky?

 

[Torv]

People who can afford Taycans are just extremely lucky?
Does that mean people who can't afford Taycans are just unlucky?

You know what I mean…

 

[Tooney]

You know what I mean…

I know what you wrote. I don't agree with it.

 

[f10tt]

It's Sunday, I don't understand how this new bill just passed the Senate given congress is not in session until tomorrow.

Also I just did a quick Google search and could not find breaking news confirmation of this report. ?

I wrote a majority of the environmental portion of the bill.

It did just pass the Senate with Harris as the tb and will pass the House either through a special session this evening or tomorrow.

Does the language of the bill, if passed, allow for grandfathering? Existing purchases in 2022? Or what?

No, it doesn't.

 

[Baam!!]

Personally, I did take advantage of the tax credit as it was there for the taking for this year’s taxes. But was it socially responsible to do so? That’s debatable.

I would have bought my Taycan regardless of the $7500 tax credit. Is it fair for those of us who can afford a $150K+ Porsche to gain a tax benefit we seriously don’t need when making the tax credit available to more people and having more EVs on the road benefits everyone?

Let’s be real here—we’re extremely lucky to be able to afford our Taycans, tax credit or no tax credit. I’m delighted that Congress finally passed something to upgrade the pathetic infrastructure in the US and benefit the environment. It’s about time!

 

[Baam!!]

I totally agree with you…

 

[TXAG]

Let’s be real here—we’re extremely lucky to be able to afford our Taycans, tax credit or no tax credit.

I wouldn't call it lucky unless it's expressed like an old saying attributed to Thomas Jefferson and Samuel Goldwyn: The harder I work, the luckier I get.

 

[Artman]

Looks like this is the bill that passed.

https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_of_2022.pdf

I scanned quickly and I'm not a law scholar but, info for EVs seems to start at page 381.

The earned income limits remain, the purchase price cap remains and it looks like you need to take possession of the vehicle prior to Jan 1, 2023.

 

[gnop1950]

I wouldn't call it lucky unless it's expressed like an old saying attributed to Thomas Jefferson and Samuel Goldwyn: The harder I work, the luckier I get.

So hard work automatically translates into large sums of money giving anyone that is willing to work hard the means to pay $150k or more for a new car? Hmm, somehow I doubt that it is that simple, there is also being in the right place, at the right time, with the right skills and native abilities. Much of it is based on hard work, but there are also many things that are out of a persons control and I would call that luck, good fortune, whatever.

I've known a lot of people, even in my own family, that worked hard their whole lives and could never even afford a new car, never mind a Porsche. So yes, I worked hard to get where I am, but there is also a considerable portion of luck involved.

 

[TXAG]

So hard work automatically translates into large sums of money giving anyone that is willing to work hard the means to pay $150k or more for a new car? Hmm, somehow I doubt that it is that simple, there is also being in the right place, at the right time, with the right skills and native abilities. Much of it is based on hard work, but there are also many things that are out of a persons control and I would call that luck, good fortune, whatever.

I've known a lot of people, even in my own family, that worked hard their whole lives and could never even afford a new car, never mind a Porsche. So yes, I worked hard to get where I am, but there is also a considerable portion of luck involved.

There was very little luck involved for me, which is why I started my sentence with the word "I." I had no intention to comment on others' efforts - sorry about that.

Come to think of it, I wish I had some of your luck!

 

[TieCon]

Isn’t there a transition period? The below is from an article discussing this:


Update: here’s a more detailed look at what is in the bill written by an actual lawyer, Chris Stidham:

New Vehicle Credit

1. Manufacturer caps eliminated. (Page 370, line 15)
2. Credit applies for vehicles purchased beginning January 1, 2023. (Page 386, line 1).
3. Transition provision for EVs with written sales orders dated in 2022 prior to the date of President signing the bill but delivered in 2023 allows purchaser to claim the “old” credit in 2023. (Page 386, line 20).
4. Vehicle must be assembled in North America to qualify for new credit. (Page 366, line 15).
5. North American assembly requirement applies to vehicles sold after the date of adoption of the bill. (Page 386, line 3)
6. $7,500 credit is broke into two binary pieces meaning the vehicle either qualifies for each piece of the credit or it doesn’t. No longer based on size of battery. (Page 366, line 6)
7. $3,750 of the new credit is based upon the vehicle having at least 40% of its battery critical minerals from the United States or countries with a free trade agreement with the United States. This is a list of countries with free trade agreements with the US.(Page 371)
8. The other $3,750 of the new credit is based on at least 50% of the battery components of the vehicle coming from the United States or countries with a free trade agreement with the US. (Page 372, line 13)
9. The 40% minerals requirement increases to 50% in 2024, 60% in 2025, 70% in 2026 and 80% in 2027. (page 371 line 23)
10. The 50% battery components requirement increases to 60% in 2024, 70% in 2026, 80% in 2027, 90% in 2028 and 100% in 2029. (Page line 373)
11. The government has until the end of the year to develop guidance on the battery requirements. (Page 374)
12. Beginning in 2025, any vehicle with battery minerals or components from a foreign entity of concern are excluded from the tax credit. (Page 374, line 20).
13. One credit per vehicle. (Page 375, line 12)
14. Modified gross income limit of $150k for individuals, $225k for head of household, and $300k for joint returns. Definition of MAGI (page 375, line 22)
15. MSRP of vehicle must be $80k or less for SUVs, Vans and Trucks. $55k for all other vehicles. (Page 377, line 4)
16. Dealer can apply credit at time of sale. Dealer must disclose to buyer the MSRP of the vehicle, the applicable tax credit amount and the amount of any other available incentive applicable to the purchase. (Page 378, line 6)
17. Credit terminates December 31, 2032.

 

[Jhenson29]

Vehicle must be assembled in North America to qualify for new credit. (Page 366, line 15).

Do vehicles shipped to port or dealer missing parts to be installed later qualify? ?

 

[fgwinn]

Isn’t there a transition period?

There is a transition period but the rules for making a qualifying purchase during this period are ambiguous.

Clearly, any transaction for a vehicle ordered and delivered after 31-Dec-2022 falls under the new rules for MSRP cap, AGI amount, and USA content.

And any transaction with a "written binding contract to purchase" in place before Biden signs the IRA bill will be covered by the old rules even if the vehicle is delivered in 2023.

However, the text of the bill does not seem to comprehend a transaction made between the signing of the bill and 1-Jan-2023. Biden could add clarity to the text of the bill by signing it on 1-Jan-2023. But I don't think that he is likely to wait over four months to sign.

Edit 11-Aug-2022: Slight correction. Some vehicles ordered and delivered after the date of enactment and before 1/1/2023 may qualify for the tax credit provided that the vehicle is assembled in North America.

 

[KTC]

No offense to anyone in U.S. automotive manufacturing, but consider the disgruntled nature of almost all staff that we could hire in the past year, I'd rather pay an extra $7500 for my Taycan to be manufactured in Germany.

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