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

[hitmonlee]

For a brief moment after reading this news, I thought about buying a new Taycan from a dealer's inventory before the end of 2022 just to qualify for the tax credit.

However the more I think about it the more I realized the idea might not be as good as it seems. Imagine what will happen in 2023 and onward: no tax credit will result in less demand. Now it's possible it gets outweighed by the overall moving to EV trend, but that will happen either way. Then if, and I know it's a big if, supply chain recovers even just a little bit. Supply would increase. Then maybe, just maybe, we stop paying ADMs and start getting discounts again.

So it's paying MSRP or even ADM but getting $7.5k tax credit if I buy in 2022, versus possibly paying no more than MSRP but no tax credit if I wait. Getting 6% off for a $120k Taycan basically makes it even.

Sponsored

 

[Evpower]

For a brief moment after reading this news, I thought about buying a new Taycan from a dealer's inventory before the end of 2022 just to qualify for the tax credit.

However the more I think about it the more I realized the idea might not be as good as it seems. Imagine what will happen in 2023 and onward: no tax credit will result in less demand. Now it's possible it gets outweighed by the overall moving to EV trend, but that will happen either way. Then if, and I know it's a big if, supply chain recovers even just a little bit. Supply would increase. Then maybe, just maybe, we stop paying ADMs and start getting discounts again.

So it's paying MSRP or even ADM but getting $7.5k tax credit if I buy in 2022, versus possibly paying no more than MSRP but no tax credit if I wait. Getting 6% off for a $120k Taycan basically makes it even.

Good luck with that.

 

[whitex]

Good luck with that.

Today, absolutely, but once we get deeper into the recession, which most economist agree is likely, it might not be such a stretch. This happened before, just before dot-com crash I was looking for a 911 allocation, couldn't find one anywhere, then the market corrected and suddenly I had multiple dealers calling with allocations because someone else had cancelled (or probably they decided they don't want to spec car given market conditions) - I picked one up with a discount too.

Today's market situation has a lot of similarities, low unemployment, low interest rates and stock soaring prior, etc. One of the dealers in the area had a Taycan Turbo CT cancellation recently (buyer backed out after the car was built) and it took a while to sell that car. The car was too different from mine so I passed on it (and apparently everyone else in the reservation line for a Turbo CT), but when I test drove it I got the impression the dealer was willing to talk some discount. I don't know what price it sold for.

 

[hitmonlee]

Good luck with that.

@whitex said it pretty well.

The other thing that's not necessarily related to cost is that I'll have to settle for a dealer spec car if I want the tax credit. There have been discussions around whether signing a contract for an allocation in 2022 but taking delivery in 2023 still qualify but I don't want to take my chances there.

But yeah, it's all speculation at this point and if I see a dealer spec car that I really like I might still jump on it.

 

[Artman]

@whitex said it pretty well.

The other thing that's not necessarily related to cost is that I'll have to settle for a dealer spec car if I want the tax credit. There have been discussions around whether signing a contract for an allocation in 2022 but taking delivery in 2023 still qualify but I don't want to take my chances there.

But yeah, it's all speculation at this point and if I see a dealer spec car that I really like I might still jump on it.

I just posted this in the other bill related thread.

https://www.taycanforum.com/forum/threads/good-bye-7-500-tax-credit.12148/page-2#post-179421

 

[fgwinn]

@whitex said it pretty well.

.....But yeah, it's all speculation at this point and if I see a dealer spec car that I really like I might still jump on it.

The way the IRA bill reads, it's not clear that a transaction entered into after Biden signs the bill will qualify for the credit even if the car is delivered in 2022. In other words, if you jump on a car in dealer inventory in the next few days before the IRA is signed into law, then you will probably qualify for the credit. But, if you wait until after Biden signs to execute a "written binding contract to purchase" it's not clear that the transaction is eligible.

 

[hitmonlee]

The way the IRA bill reads, it's not clear that a transaction entered into after Biden signs the bill will qualify for the credit even if the car is delivered in 2022. In other words, if you jump on a car in dealer inventory in the next few days before the IRA is signed into law, then you will probably qualify for the credit. But, if you wait until after Biden signs to execute a "written binding contract to purchase" it's not clear that the transaction is eligible.

Good point. Something worth keeping in mind.

 

[fgwinn]

So much for the IRA reducing inflation.....

Ford just raised the price of the F-150 Lightning by $8500. Looks like the $55K and $80K MSRP thresholds are going to be obsolete before the effective date of the IRA of 2022.

 

[TDinDC]

So much for the IRA reducing inflation.....

Ford just raised the price of the F-150 Lightning by $8500. Looks like the $55K and $80K MSRP thresholds are going to be obsolete before the effective date of the IRA of 2022.

I’ve been thinking about that aspect of the bill for awhile. At first, I thought it was absurd. Then I started wondering whether the point was to create incentives for manufacturers to go for mass market and keep prices below that threshold. Wonder whether it will work?

 

[f10tt]

I’ve been thinking about that aspect of the bill for awhile. At first, I thought it was absurd. Then I started wondering whether the point was to create incentives for manufacturers to go for mass market and keep prices below that threshold. Wonder whether it will work?

That was the agreement senators had reached with the big 3 US manufacturers and is why the bill is written that way.

Watch closely over the next 50 days as we near the end of the FY. Some interesting things are going to be tacked onto bills that directly relate to this.

 

[Kayone73]

The way the IRA bill reads, it's not clear that a transaction entered into after Biden signs the bill will qualify for the credit even if the car is delivered in 2022. In other words, if you jump on a car in dealer inventory in the next few days before the IRA is signed into law, then you will probably qualify for the credit. But, if you wait until after Biden signs to execute a "written binding contract to purchase" it's not clear that the transaction is eligible.

I don't think a bill passed into law in 2022 can retroactively affect IRS tax return filing policy that same year unless its explicitly stated in the language of the bill. These major policy changes usually go into effect the beginning of the next fiscal year, otherwise there is a domino effect of fucking up EVERYONE's (both personal and corporate) tax management plans for the year and that kind of stuff would seriously blowback to the law makers in Washington in a way they worry about losing those people's support come next election season.

 

[rich_r]

For a brief moment after reading this news, I thought about buying a new Taycan from a dealer's inventory before the end of 2022 just to qualify for the tax credit.

However the more I think about it the more I realized the idea might not be as good as it seems. Imagine what will happen in 2023 and onward: no tax credit will result in less demand. Now it's possible it gets outweighed by the overall moving to EV trend, but that will happen either way. Then if, and I know it's a big if, supply chain recovers even just a little bit. Supply would increase. Then maybe, just maybe, we stop paying ADMs and start getting discounts again.

So it's paying MSRP or even ADM but getting $7.5k tax credit if I buy in 2022, versus possibly paying no more than MSRP but no tax credit if I wait. Getting 6% off for a $120k Taycan basically makes it even.

i think your intuition is correct all else being equal (basic Econ 101 supply/demand curves). In the real world it will be hard to tell because supply abd demand will change due to other factors as well over time. So, while it’s not possible to predict what the actual price will be in the future, it will be lower than it otherwise woukd be with the subsidy (tax credit)

 

[whitex]

I’ve been thinking about that aspect of the bill for awhile. At first, I thought it was absurd. Then I started wondering whether the point was to create incentives for manufacturers to go for mass market and keep prices below that threshold. Wonder whether it will work?

My guess is that once the US manufacturers run out of buyers without incentive (F150 Lightening are not going to be sitting unsold for a while, incentive or not), they will put their lobbying money to good use by lobbying congress to add an amendment raising the limits to $1 more than their new prices. Those amendments usually end up in completely unrelated bills, like "Feed starving children" to make sure nobody would vote against them. The big political step was to get the new incentives, adjusting limits is relatively trivial as it requires no new budget.

 

[swag]

For a brief moment after reading this news, I thought about buying a new Taycan from a dealer's inventory before the end of 2022 just to qualify for the tax credit.

However the more I think about it the more I realized the idea might not be as good as it seems. Imagine what will happen in 2023 and onward: no tax credit will result in less demand. Now it's possible it gets outweighed by the overall moving to EV trend, but that will happen either way. Then if, and I know it's a big if, supply chain recovers even just a little bit. Supply would increase. Then maybe, just maybe, we stop paying ADMs and start getting discounts again.

So it's paying MSRP or even ADM but getting $7.5k tax credit if I buy in 2022, versus possibly paying no more than MSRP but no tax credit if I wait. Getting 6% off for a $120k Taycan basically makes it even.

Let’s face it . People who would purchase porsche don’t really care about the incentive and stuff. It would be nice if one’s can get it . In my instance ,I will still pick up the vehicle even If 7500 went away . But also I’ll try to get a “binding contract “ tomorrow just so if it’ll work.

 

[NJ-Taycan]

Rich people are rich because they live like they are poor. Poor people are poor because they try to live like they are rich. And yes, I want my $7,500.00 tax credit, it made the deal a good deal in my state of mind. Also, the lovely state of NJ does not charge sales tax on the sale of EV’s. One small benefit for living in this damn state.

Sponsored