Infrastructure Bill passed. I don’t think this is good.

gnop1950

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It doesn't matter that it's the most expensive, what matters is that it's the most sold brand (Tesla sold over 77% of all new EV's in the USA this year). Here are some numbers from Car and Driver.

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That said, let's see what threshold will actually qualify for the incentive by the time this is signed into law. So far the number of qualified vehicles and buyers have been dropping every iteration of the bill. I'm going to bet it's going to be more than half of EV sales pre-incentive (since the incentive is bound to skew the numbers towards cars which do qualify of course, possibly new compliance models). Add to this the union shop provision, and right away 77+% of EV's sold in the USA would not qualify for that incentive. I know, you might not call 77% a vast majority, sure, let's just call it a majority then (>50%, so yes, more than half).
The 77% + you are using would be for the full $12500 as currently proposed (Union shop. etc), but most of them (Teslas) would still qualify for the $7500, correct? Since Teslas don't currently have a tax incentive it would seem to be a net gain for EV buyers. As for Luxury EVs not having a federal tax incentive, well, while I wouldn't mind one, it kind of makes sense. I still get the state tax break and can use the HOV lane. Hmm, I'm retired, probably won't get much use out of the HOV lane ;-)
 

Mr.Smith

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The 77% + you are using would be for the full $12500 as currently proposed (Union shop. etc), but most of them (Teslas) would still qualify for the $7500, correct? Since Teslas don't currently have a tax incentive it would seem to be a net gain for EV buyers. As for Luxury EVs not having a federal tax incentive, well, while I wouldn't mind one, it kind of makes sense. I still get the state tax break and can use the HOV lane. Hmm, I'm retired, probably won't get much use out of the HOV lane ;-)
There is no net gain for EV buyers when it comes to Tesla. Tesla is the only one that gains.
It's $7500 + $500 if the batteries are made in the US.
Tesla has raised their prices exactly $8000 to capture the entire incentive

GM and Ford buyers would benefit the most, but their sales are so tiny.
 

gnop1950

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There is no net gain for EV buyers when it comes to Tesla. Tesla is the only one that gains.
It's $7500 + $500 if the batteries are made in the US.
Tesla has raised their prices exactly $8000 to capture the entire incentive

GM and Ford buyers would benefit the most, but their sales are so tiny.
I think you are conflating two different discussions. This was, I thought, about the tax incentive and which vehicles would qualify. What actions manufacturers take, like raising the price of their cars is, at least to me, a different discussion. Not to mention that a Tesla was never on the table for me in any case :)
 

whitex

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The 77% + you are using would be for the full $12500 as currently proposed (Union shop. etc), but most of them (Teslas) would still qualify for the $7500, correct? Since Teslas don't currently have a tax incentive it would seem to be a net gain for EV buyers. As for Luxury EVs not having a federal tax incentive, well, while I wouldn't mind one, it kind of makes sense. I still get the state tax break and can use the HOV lane. Hmm, I'm retired, probably won't get much use out of the HOV lane ;-)
I was talking about the majority of EV's being sold today, regardless whether or not they qualify for the $7,500. If we include such external factors as current incentive eligibility and market conditions, then no incentives are needed for any EVs at all, as all of them are currently selling out all production capacity, so incentives will not result in any more EV's sold.
 

gnop1950

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I was talking about the majority of EV's being sold today, regardless whether or not they qualify for the $7,500. If we include such external factors as current incentive eligibility and market conditions, then no incentives are needed for any EVs at all, as all of them are currently selling out all production capacity, so incentives will not result in any more EV's sold.
I don't think we have the data to make such a determination. There is a lot of EV production capacity coming online in the next couple of years and, while Tesla is likely to maintain its lead for a while, competition is finally on the way. If nothing else, expanding the number of vehicles qualifying for the tax credit seems to be very popular with both the industry and consumers.

Personally, I think a gradually increasing tax on ICE vehicles would be even more of an incentive for people to switch to EVs, but would likely not be very popular. EV credits, on the other hand, seem to be favored by many EV, and potential EV, buyers.

Parts of the bill, like the union incentive and the credit for using US-made batteries are both good politics and possibly will accelerate the transition to EVs. Look at Ford's investment in the three new battery plants in the US, GM's promise to go all-electric for light vehicles by 2035. (Could also be a back-handed slap at Telsa). Heck, GM has been buying out and closing Cadillac dealers that won't make the switch to electric and have announced plans for the Cadillac line to be all-electric by 2030.

The bottom line is it is an exciting time for EVs and it will be interesting to see how it all plays out. One thing I'd personally bet on is that any kind of major incentives for luxury EVs is likely a thing of the past. If we even keep the HOV and license incentives I'll be happy.
 


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I don't think we have the data to make such a determination. There is a lot of EV production capacity coming online in the next couple of years and, while Tesla is likely to maintain its lead for a while, competition is finally on the way. If nothing else, expanding the number of vehicles qualifying for the tax credit seems to be very popular with both the industry and consumers.

Personally, I think a gradually increasing tax on ICE vehicles would be even more of an incentive for people to switch to EVs, but would likely not be very popular. EV credits, on the other hand, seem to be favored by many EV, and potential EV, buyers.

Parts of the bill, like the union incentive and the credit for using US-made batteries are both good politics and possibly will accelerate the transition to EVs. Look at Ford's investment in the three new battery plants in the US, GM's promise to go all-electric for light vehicles by 2035. (Could also be a back-handed slap at Telsa). Heck, GM has been buying out and closing Cadillac dealers that won't make the switch to electric and have announced plans for the Cadillac line to be all-electric by 2030.

The bottom line is it is an exciting time for EVs and it will be interesting to see how it all plays out. One thing I'd personally bet on is that any kind of major incentives for luxury EVs is likely a thing of the past. If we even keep the HOV and license incentives I'll be happy.
Looks like the Bill is not passing so quickly. Also looks like the Union made additional allowance may be dead. Manchin is objecting to that part. What happens if the Bill passes in 2022 is it retroactive to 12/31/21?
 

gnop1950

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Looks like the Bill is not passing so quickly. Also looks like the Union made additional allowance may be dead. Manchin is objecting to that part. What happens if the Bill passes in 2022 is it retroactive to 12/31/21?
Not sure it would mean anything to us, at least not unless they make significant changes to the price ceiling to qualify for the incentives. Not that I'd object mind you ;-)
 

kwrudy123

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In the bill, I believe there is a section that sets MSRP limits, of which the max is $80k (for an SUV). This is what everyone is focused on. If we understand it correctly, the credit will only stay for vehicles that don’t exceed the respective limits of their category. Perhaps we are misunderstanding that piece. Can you clarify?
Those MSRP limits are not in the current EV tax credit legislation, but are listed as possible limitations in the proposed BBB legislation. But it is anyone's guess if BBB even gets passed or what details will survive. Here is a summary of what is currently proposed:

The Build Back Better Act and its potential $12,500 EV credit still await passage following the CBO score and official Congressional approval. A lot can change between now and the official signature in the oval office, but here are the latest terms introduced earlier this week.

Note – these exact terms are not confirmed until the bill has been officially passed:
  • Federal tax credit for EVs jumps from $7,500 to $12,500
    • Keep the $7,500 incentive for new electric cars for 5 years
    • Add an additional $4,500 for EVs assembled in the US using union labor
    • Another $500 for EVs using battery packs with 50% of components (including cells) made in the US
  • Zero-emission vans, SUVs and trucks with MSRPs up to $80,000 qualify (increased from previous policy)
  • Electric sedans priced up to $55,000 MSRP qualify (stays the same)
  • The full EV tax credit will be available to individuals reporting adjusted gross incomes of $250,000 or less, $500,000 for joint filers (decreased from $400,000 for individuals/$800,000 for joint filers currently in place)
  • EVs must be made in the US starting in 2027 to qualify for any of the $12,500 credit
  • Eliminates tax credit cap after automakers hit 200,000 EVs sold, making GM and Tesla once again eligible
 


cometguy

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Those MSRP limits are not in the current EV tax credit legislation, but are listed as possible limitations in the proposed BBB legislation. But it is anyone's guess if BBB even gets passed or what details will survive. Here is a summary of what is currently proposed:

The Build Back Better Act and its potential $12,500 EV credit still await passage following the CBO score and official Congressional approval. A lot can change between now and the official signature in the oval office, but here are the latest terms introduced earlier this week.

Note – these exact terms are not confirmed until the bill has been officially passed:
  • Federal tax credit for EVs jumps from $7,500 to $12,500
    • Keep the $7,500 incentive for new electric cars for 5 years
    • Add an additional $4,500 for EVs assembled in the US using union labor
    • Another $500 for EVs using battery packs with 50% of components (including cells) made in the US
  • Zero-emission vans, SUVs and trucks with MSRPs up to $80,000 qualify (increased from previous policy)
  • Electric sedans priced up to $55,000 MSRP qualify (stays the same)
  • The full EV tax credit will be available to individuals reporting adjusted gross incomes of $250,000 or less, $500,000 for joint filers (decreased from $400,000 for individuals/$800,000 for joint filers currently in place)
  • EVs must be made in the US starting in 2027 to qualify for any of the $12,500 credit
  • Eliminates tax credit cap after automakers hit 200,000 EVs sold, making GM and Tesla once again eligible
The base tax credit goes to $4k for cars with battery packs < 40 kWh in the current version of the House bill; that eliminates almost all PHEVs, so that's a big deal for potential PHEV buyers. (We have bought two PHEVs in the last 3-4 years, and we'd have lost about $6.5k if that policy had been in place up til now.)

I would like to see a good clear definition of "sedan" vs. "crossover/SUV", for the purposes of this legislation; such a clear-cut definition has always been elusive, but now this legislation would make it crucial. What do wagons count as, for example? Lifted wagons? Macans? Lots of new vehicles (especially BEVs) are in that "hazy" territory between "sedans" and "crossovers"/"SUVs"... (I also have a Macan, and my wife swears that it's not an SUV; for her an SUV is an Explorer, a Highlander, a RAV4, a Cayenne, etc.)

I'm one of those people who (while I could afford more, the wife wants to veto any such ideas) must keep my new-car purchases to $100k or less after credits/rebates. Thus, for me, the changing of the federal tax credit to having a $55k (or even a $80k) limit is a big deal. I can have a custom-built CT4 for well under $100k after tax credits/rebates, but without the tax credits, it becomes impossible to do.
 
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Jhenson29

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I'm one of those people who (while I could afford more, the wife wants to veto any such ideas) must keep my new-car purchases to $100k or less after credits/rebates.
Yep. That’s my wife. I had to slowly chip away at her to get our build up to $129k for a 4S.

I had to trade 2 cats for her to agree to let me get a 911. Still negotiating price. Might have to throw in one more cat. ?
 

PanameraFrank

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I am curious to see how this is implemented, should the changes pass.

Will it be purchase price or determined by model MSRP? I was made aware that many of (all?) the states with additional incentives base it on model MSRP and not final sale price. Ie.. there is a list of models that qualify and you can still add additional options that take you above the cutoff.
 

kort

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Electrify America opened largest charging station Santa Clara CA. That should make some Taycan drivers here happy? :)
I suppose if you are in that part of the world this station is a good thing, for me, it is irrelevant because it is more than 2700 miles away.
 

Kellster

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I am curious to see how this is implemented, should the changes pass.

Will it be purchase price or determined by model MSRP? I was made aware that many of (all?) the states with additional incentives base it on model MSRP and not final sale price. Ie.. there is a list of models that qualify and you can still add additional options that take you above the cutoff.
From the outset of the BBB, the effort has been to eliminate the credit for higher incomes and EV cars...I think it's safe to assume that if the BBB passes no Taycan purchased starting January 1, 2022 will be eligible for the tax credit. Those who have ordered with a deposit assumed that the tax credit would be available to them.

I have asked my Porsche sales rep to bring this "reliance" to the attention of Porsche Corporate. I don't think that corporate can fight the general policy but they could fight for inclusion of an extension of the credit for those individuals who ordered EVs in '21 (but will not receive until '22) with the knowledge and expectation that a tax credit is available. I will also be writing my U.S. Senators and representative in Congress. Yes, I know many of you will cycnically say "why bother" but, hey, it can't hurt.
 

cometguy

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The latest House version of the BBB act, which appears ready to pass tonight, has the following new (revised) section with upper MSRP limits on eligible newly purchased EVs:

[cut-and-pasted from Part 4, Sec. 136401, new Sec. 36C.d]

(d) Manufacturer's Suggested Retail Price Limitation.--
``(1) In general.--No credit shall be allowed under
subsection (a) for a vehicle with a manufacturer's suggested
retail price in excess of the applicable limitation.
``(2) Applicable limitation.--For purposes of paragraph
(1), the applicable limitation for each vehicle classification
is as follows:
``(A) Sedans.--In the case of a sedan, $55,000.
``(B) Vans.--In the case of a van, $64,000.
``(C) Sport utility vehicles.--In the case of a
sport utility vehicle, $69,000.
``(D) Pickup trucks.--In the case of a pickup
truck, $74,000.”
Sponsored

 
 




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