[Geff]

Is anyone thinking of canceling their order to see how this plays out? My delivery date is Nov-Dec, so I'm going to take a "wait and see" approach. Hopefully, it'll be resolved by then.


From astrosgp on reddit:

Tonight 645 pages of tax legislation dropped that is a first draft of language to be included in the reconciliation bill that the Democrats are trying to pass later this year. Of course, all of this is subject to change, but highlights from my skimming are below:
New EV credit that is the sum of:

• $4,000 base amount
• $3,500 if the EV has a battery of at least 40kWh
• $4,500 if the final assembly occurs at a domestic, unionized plant
• $500 if at least 50% of components and battery cells are manufactured in the US.

The credit is now refundable, and can be remitted to the dealer at the point of sale. The credit also has an income limit, but only phases out above incomes of $400,000 Single/$800,000 MFJ. There are also new MSRP restrictions, so any EV above the following MSRP's is ineligible for a credit:

• $55,000 for a sedan
• $64,000 for a van
• $69,000 for an SUV
• $74,000 for a pickup

There would also be a new credit for used EV's of up to $2,500. The sale price of the used EV would have to be less than $25,000, and would phase out for buyers over $75,000 Single/$150,000 MFJ.
It looks like this would all take effect in 2022, and replace the existing credits. Here is the link in case anyone wants to read and discuss (starts on p. 282): https://waysandmeans.house.gov/site...ans.house.gov/files/documents/SUBFGHJ_xml.pdf

 

[Spin]

I wouldn't cancel. You could always refuse delivery when it comes in. You might have a clearer picture by then.

 

[Froggy]

Even if this bill passed as is, it wouldn't take effect until the next tax season. Expect the union built part to be subject to litigation.

 

[JPWhite]

Is anyone thinking of canceling their order to see how this plays out? My delivery date is Nov-Dec, so I'm going to take a "wait and see" approach. Hopefully, it'll be resolved by then.

No I hope to get my tax refund on the existing credit system. I know from experience with Nissan and Tesla I will get my $7,500. However who knows what will actually pass and with what earnings limit.

A bird in the hand is worth two in the bush.

 

[wtatun]

Yup - taking my 2 $7.5K tax credits this year along with the EVSE credit for the two chargers and installation THIS tax cycle. Today’s money is worth more than tomorrow’s.

 

[Spin]

A bird in the hand is worth two in the bush.

If the new tax credit is attractive enough I might have 1 in the hand next year as well!

 

[Eric Nay]

Yeah, double what they said about "bird in the hand". VW's not Unionized in the US, so no joy there. I still hope to get mine by December 31st for the tax money just a few months later.

 

[Spin]

VW's not Unionized in the US, so no joy there.

As @Froggy said, the union part will probably be subject to litigation.

 

[Froggy]

Yep, taking my $7500.00 for the ID and also filing for the EVSE before they can change it to means tested.

 

[salant76]

@Geff,

Thank you for posting this. Really pushes me towards getting a new EV this year.

A few comments on the proposal:

I like how a sedan max is $19k less than a truck.

I know in the US we like our trucks but kinda off misses the point of an EV. Pushing for vehicles requiring more batteries seems silly to me.

We really need to move pass this full size trucks as the family car stage.

Personally I am fine with some buying a Porsche Taycan Turbo not getting $7500. If you are buying a car like that $7500 isn’t 50% or more of you down payment.

I fully assume that my next EV 4 or 5 years from now will not have any tax credit. Which fine with.

 

[My Main Man]

They gotta change the tax credits to rebates! Your average Joe doesn't earn enough to make full use of a $7500 tax credit.

 

[krusshall]

Long ways to go before anything comes of this. It hasn’t even made it out of the House yet.

The union bit won’t ever make it into a final bill.

I’m gunning for the sure thing $7,500.

 

[agzand]

The chance of this passing this way is very slim. I say if you want a VW get it now. If you want a Tesla it makes sense to wait because you have nothing to lose.

 

[Don]

If you want to buy a car this year, the $7,500 is the best you can hope for. According to the bill's language, even if it does pass, it won't take effect before January 1st, 2022

Don

 

[salant76]

Figured I respond to this thread with the latest info on US Tax Credits.

Looks like the updated EV tax credits are now part of the Build Back Better Act and not the infrastructure Bill recently passed in The House.

I guess we are still in limbo for next year.

https://electrek.co/2021/11/06/congress-passes-1-2-trillion-infrastructure-bill-12500-ev-tax-credit-still-awaits-passage/amp/

 

[agzand]

Figured I respond to this thread with the latest info on US Tax Credits.

Looks like the updated EV tax credits are now part of the Build Back Better Act and not the infrastructure Bill recently passed in The House.

I guess we are still in limbo for next year.

https://electrek.co/2021/11/06/congress-passes-1-2-trillion-infrastructure-bill-12500-ev-tax-credit-still-awaits-passage/amp/

I am not sure how the congress will deal with this tax credit. The fact is that the biggest player (Tesla) has already added the full credit amount to their car prices. So it will look like the money goes directly to Tesla's pocket rather than actual customers.

I think they should not approve any additional tax credits for EVs. If they want to really increase US competitiveness in EV space they should provide support for battery manufacturing and research. Whoever comes up with better batteries will lead the EV race.

 

[voxel]

I am not sure how the congress will deal with this tax credit. The fact is that the biggest player (Tesla) has already added the full credit amount to their car prices. So it will look like the money goes directly to Tesla's pocket rather than actual customers.

I think they should not approve any additional tax credits for EVs. If they want to really increase US competitiveness in EV space they should provide support for battery manufacturing and research. Whoever comes up with better batteries will lead the EV race.

The EV tax credit cost is astronomical IMO. Tesla builds 800K EVs a year for the US alone (soon 1M and more with Austin). Let's say $8B ($8000 per EV) for 1M vehicles per year. And over 10 years (assuming no major production increase - which is not reasonable because Tesla could sell 2M cars/year) that's $80B for Tesla owners.

That doesn't include Ford, Toyota, VW, GM, Ford, Rivian, Hyundai, Kia - who will sell Tesla-like numbers (in aggregate) and some of these EVs will qualify for the full $12500 credit.

Demand is not an issue for Telsa. They can't build cars fast enough (they already build 200K Model 3s and Ys per quarter) and have 8-10 month wait times. Even cancelled/abandoned orders that appear on the Tesla site are sold within minutes. Tax credits are very unnecessary for most EV makers IMO.

As for battery research - we already have private research and corporations like QuantumScape. In two years, I think the dominate type of battery will be LFP (what's used in the newest base Tesla Model 3). It's cheap, lasts 4x more cycles than NMC/NCA batteries, can be charged to 100%, and might bring EV prices down to sub $35K level (especially for commuter EVs).

 

[agzand]

The EV tax credit cost is astronomical IMO. Tesla builds 800K EVs a year for the US alone (soon 1M and more with Austin). Let's say $8B ($8000 per EV) for 1M vehicles per year. And over 10 years (assuming no major production increase - which is not reasonable because Tesla could sell 2M cars/year) that's $80B for Tesla owners.

That doesn't include Ford, Toyota, VW, GM, Ford, Rivian, Hyundai, Kia - who will sell Tesla-like numbers (in aggregate) and some of these EVs will qualify for the full $12500 credit.

Demand is not an issue for Telsa. They can't build cars fast enough (they already build 200K Model 3s and Ys per quarter) and have 8-10 month wait times. Even cancelled/abandoned orders that appear on the Tesla site are sold within minutes. Tax credits are very unnecessary for most EV makers IMO.

As for battery research - we already have private research and corporations like QuantumScape. In two years, I think the dominate type of battery will be LFP (what's used in the newest base Tesla Model 3). It's cheap, lasts 4x more cycles than NMC/NCA batteries, can be charged to 100%, and might bring EV prices down to sub $35K level (especially for commuter EVs).

And how many of these LFP cells are built in US? Zero. By the time we make some LFP cells Chinese will make better LFP cells. US needs a Manhattan style project to catch up in chip and battery manufacturing. Otherwise it cannot maintain its current minor position in the car market. Putting more money toward EV sales is not going to achieve that.

 

[voxel]

And how many of these LFP cells are built in US? Zero. By the time we make some LFP cells Chinese will make better LFP cells. US needs a Manhattan style project to catch up in chip and battery manufacturing. Otherwise it cannot maintain its current minor position in the car market. Putting more money toward EV sales is not going to achieve that.

LFP is a cheap stop gap until QuantumScape perfects their solid state batteries. I do believe though LFPs will dominate the battery market because of the availability of materials (Li/Lithium and Fe/Iron) and the "idiot-proof" ness of them in non-freezing climates.

The problem with LFP was patents I believe - that just expired. I'm sure they could be made here with a robot battery factory like Tesla has. With the battery tax credit of $500 there would be more incentive to build US battery factories.

Anyhow...the current set of EV tax credits mainly benefit a German automaker (VW/Audi) and an American one that makes EVs in Mexico (Ford with the Mach-E) and soon two Korean ones when they widely launch the Ioniq 5 + EV6. The two American automakers (GM and Tesla) are no longer eligible for EV tax credits because of their "success."

 

[TT97]

The EV tax credit cost is astronomical IMO. Tesla builds 800K EVs a year for the US alone (soon 1M and more with Austin). Let's say $8B ($8000 per EV) for 1M vehicles per year. And over 10 years (assuming no major production increase - which is not reasonable because Tesla could sell 2M cars/year) that's $80B for Tesla owners.

That doesn't include Ford, Toyota, VW, GM, Ford, Rivian, Hyundai, Kia - who will sell Tesla-like numbers (in aggregate) and some of these EVs will qualify for the full $12500 credit.

Demand is not an issue for Telsa. They can't build cars fast enough (they already build 200K Model 3s and Ys per quarter) and have 8-10 month wait times. Even cancelled/abandoned orders that appear on the Tesla site are sold within minutes. Tax credits are very unnecessary for most EV makers IMO.

As for battery research - we already have private research and corporations like QuantumScape. In two years, I think the dominate type of battery will be LFP (what's used in the newest base Tesla Model 3). It's cheap, lasts 4x more cycles than NMC/NCA batteries, can be charged to 100%, and might bring EV prices down to sub $35K level (especially for commuter EVs).

It's hard to call those number "astronomical" when "conservative estimates put U.S. direct subsidies to the fossil fuel industry at roughly $20 billion per year."

Fact Sheet | Fossil Fuel Subsidies: A Closer Look at Tax Breaks and Societal Costs (2019) | White Papers | EESI

www.eesi.org

However, I personally feel EV subsidies should be focus more on improving the infrastructure. $5B in the bill is just not enough. The number one reason I hear from people who are hesitant to buy an EV is due to lack of charging locations. We need more apartment complexes with EV charging and would love to see more gas stations with Level 3 chargers (I think that would be more perception than anything else). On major interstates, there should be just as many L3 charging options as there are fossil fueling facilities.