EV Tax Credits Are Changing: What’s Ahead

[kieefer]

It's even worse than I thought and a lot of people going to be disappointed when they find this out. I'm sure there's a market for some of these 8 vehicles but personally I wouldn't own any of them. Plus they all need to be under $25K which in todays market isn't always easy to find with used car prices at an all time high.

It’s like the government has no idea what they are doing, unless it’s to line their own pockets or their donors.

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[dtech]

Reading this thread makes me feel embarrassed that I drive a ranger but then again it's only a small minority of owners that post here, the thread is full of misinformation and debbie downer, ill informed anti government comments, no it's far from a perfect piece of legislation but it has a lot of positives, link to an analysis which I find reasonably accurate - the main concept is that this legislation is aimed squarely at China and encouraging manufacturing to occur in the US, Canada and Mexico. Keep in mind where much of the US mfg base has gone to over the last 50 yrs, and look what has happened recently to US efforts to mfg solar panels - it's mostly in China now, and if you don't think that China will eventually go after the US auto market you best think again. The main beneficiares of the shift of mfg goods to China - stockholders (myself included) corporate execs and very wealthy folks - the majority of whom saw their wealth significantly increase both in the 2009 financial meltdown and the recent pandemic.
Almost forgot to mention how Ford touts their US heritage and then they ink a battery mfg deal with China, they will likely need to rethink that strategy.
https://time.com/6206639/electric-vehicle-tax-credits-inflation-reduction-act/

 

[D Fresh]

Reading this thread makes me feel embarrassed that I drive a ranger but then again it's only a small minority of owners that post here, the thread is full of misinformation and debbie downer, ill informed anti government comments, no it's far from a perfect piece of legislation but it has a lot of positives, link to an analysis which I find reasonably accurate - the main concept is that this legislation is aimed squarely at China and encouraging manufacturing to occur in the US, Canada and Mexico. Keep in mind where much of the US mfg base has gone to over the last 50 yrs, and look what has happened recently to US efforts to mfg solar panels - it's mostly in China now, and if you don't think that China will eventually go after the US auto market you best think again. The main beneficiares of the shift of mfg goods to China - stockholders (myself included) corporate execs and very wealthy folks - the majority of whom saw their wealth significantly increase both in the 2009 financial meltdown and the recent pandemic.
Almost forgot to mention how Ford touts their US heritage and then they ink a battery mfg deal with China, they will likely need to rethink that strategy.
https://time.com/6206639/electric-vehicle-tax-credits-inflation-reduction-act/

I can appreciate the US manufacturing aspect of the bill.

So I'll rephrase my question to address that.

Why should I pay for some rich prick's made in America car?

 

[dtech]

Are you referring to Tesla ? Certainly car buyers can make decisions based on likes/dislikes of various aspects of a company, including their management but most base their decisions on other factors like styling, affordability, etc. Under current Federal law both GM and Tesla have exceeded the 200k vehicle limit to qualify for tax incentives but they still sell plenty of EVs. The new law makes them eligible again if vehicles are under $80k, 40% batt material sourced in N America, and the buyer's income is less than $150 k . So the legislation is intended to bring down the prices of EVs and encourage domestic mfg. Is it a protectionist law (perhaps illegal under WTO laws) - absolutely, but it's aimed primarily at a country that routinely disregards fair trade practices and patents and has been on a buying spree to corner the WW supply of scare and precious materials. The dependencies on China are onerous, some surfaced during the pandemic and the lack of chip making capability in the US is a huge, huge, huge vulnerability.
Also this legislation as a result of a compromise provides for additional oil and gas leases both off shore and on federal lands - which arguably makes a lot of sense for the US consumer.
As I said far from perfect but should be favorable for domestic auto makers and consumers if NA battery production can ramp up.

 

[Jbrubakerjr]

It’s like the government has no idea what they are doing, unless it’s to line their own pockets or their donors.

 

[Trigganometry]

Honestly we’ve seen this before. It cost taxpayers dearly and enriched countless “chosen ones”

We paid for this once and it face planted bad. We also got ZERO return for the efforts. So, we’re going to do it right this time with even more capital?

sorry, I’m a realist and just see a repeat on a grander scale.

link to past follies https://www.johnlocke.org/obamas-green-energy-failure-list/

 

[D Fresh]

Are you referring to Tesla ? Certainly car buyers can make decisions based on likes/dislikes of various aspects of a company, including their management but most base their decisions on other factors like styling, affordability, etc. Under current Federal law both GM and Tesla have exceeded the 200k vehicle limit to qualify for tax incentives but they still sell plenty of EVs. The new law makes them eligible again if vehicles are under $80k, 40% batt material sourced in N America, and the buyer's income is less than $150 k . So the legislation is intended to bring down the prices of EVs and encourage domestic mfg. Is it a protectionist law (perhaps illegal under WTO laws) - absolutely, but it's aimed primarily at a country that routinely disregards fair trade practices and patents and has been on a buying spree to corner the WW supply of scare and precious materials. The dependencies on China are onerous, some surfaced during the pandemic and the lack of chip making capability in the US is a huge, huge, huge vulnerability.
Also this legislation as a result of a compromise provides for additional oil and gas leases both off shore and on federal lands - which arguably makes a lot of sense for the US consumer.
As I said far from perfect but should be favorable for domestic auto makers and consumers if NA battery production can ramp up.

I'm talking about tax credits for new vehicles.

I'm not rich, I make far less than $150k/year. I've owned more than my fair share of new vehicles in my life. And I've paid for every damn one of them out my pocket. A brand new Model 3 Performance costs less than $80k. Why should anybody help me buy an $80k vehicle?

Even a $40k vehicle, why are we subsidizing luxury purchases?

Let's look at that Tesla Model 3 Performance that would fall under that $80k mark.

A very much middle class person like me could swing one if I wanted to. But I'm responsible, mostly, with my money and I don't feel like I need a $70k car in my life. Yet through my tax dollars I'm helping buy one for everybody else?

If they really wanted to protect American manufacturing AND make EVs more affordable AND green up emissions the bill would look much different.

Say government backed 0% APR loans on US made new EVs under $40k. Or tax credits for new US made EVs under $25k for people making less than say $50k/year.

But this is just some feel good bullshit designed to make certain people's certain spots a little tingly. It certainly won't accomplish any of it's stated goals.

 

[kieefer]

Every time the Gov sticks their paws into our pockets to “help the People” someone gets screwed and someone gets rich. Been that way since S.S..

We are so far off the intended path of governments role its depressing.
There, I’m done.

 

[deleriumtremor]

I'm talking about tax credits for new vehicles.

I'm not rich, I make far less than $150k/year. I've owned more than my fair share of new vehicles in my life. And I've paid for every damn one of them out my pocket. A brand new Model 3 Performance costs less than $80k. Why should anybody help me buy an $80k vehicle?

Even a $40k vehicle, why are we subsidizing luxury purchases?

Let's look at that Tesla Model 3 Performance that would fall under that $80k mark.

A very much middle class person like me could swing one if I wanted to. But I'm responsible, mostly, with my money and I don't feel like I need a $70k car in my life. Yet through my tax dollars I'm helping buy one for everybody else?

If they really wanted to protect American manufacturing AND make EVs more affordable AND green up emissions the bill would look much different.

Say government backed 0% APR loans on US made new EVs under $40k. Or tax credits for new US made EVs under $25k for people making less than say $50k/year.

But this is just some feel good bullshit designed to make certain people's certain spots a little tingly. It certainly won't accomplish any of it's stated goals.

Don't try and make sense of it.

It really isn't about assisting EV sales, even one's built in America. It is just political gadgets, gadgets that can be counted on to reliably get votes to assure their gig is safe, that's it.

Both sides of the aisle count on the divide things like EV credits, climate change, Second Amendment Rights, name your favorite, create to assure they have the most ardent of supporters.

When meaningful (and short) term limits are finally passed for congress, a bunch of the world's biggest problems will be solved like first year algebra equations. Anybody ready to solve for X?

 

[D Fresh]

Don't try and make sense of it.

It really isn't about assisting EV sales, even one's built in America. It is just political gadgets, gadgets that can be counted on to reliably get votes to assure their gig is safe, that's it.

Both sides of the aisle count on the divide things like EV credits, climate change, Second Amendment Rights, name your favorite, create to assure they have the most ardent of supporters.

When meaningful (and short) term limits are finally passed for congress, a bunch of the world's biggest problems will be solved like first year algebra equations. Anybody ready to solve for X?

Amen!

 

[dtech]

I'm talking about tax credits for new vehicles.

I'm not rich, I make far less than $150k/year. I've owned more than my fair share of new vehicles in my life. And I've paid for every damn one of them out my pocket. A brand new Model 3 Performance costs less than $80k. Why should anybody help me buy an $80k vehicle?

Even a $40k vehicle, why are we subsidizing luxury purchases?

Let's look at that Tesla Model 3 Performance that would fall under that $80k mark.

A very much middle class person like me could swing one if I wanted to. But I'm responsible, mostly, with my money and I don't feel like I need a $70k car in my life. Yet through my tax dollars I'm helping buy one for everybody else?

If they really wanted to protect American manufacturing AND make EVs more affordable AND green up emissions the bill would look much different.

Say government backed 0% APR loans on US made new EVs under $40k. Or tax credits for new US made EVs under $25k for people making less than say $50k/year.

But this is just some feel good bullshit designed to make certain people's certain spots a little tingly. It certainly won't accomplish any of it's stated goals.

Some people are against the gov getting into loan biz (remember the mortgage debacle and bailouts) , many opposed the bailout of the auto industry yrs back, but I think upstream in this thread we have people discussing their elation with tax incentives for residential solar, an investment which is out of reach for many lower income home owners, yet these same folks criticize tax incentives for EVs , I can see your point about the price point - I mistakenly said $80 k which is wrong as it's $55k for EV cars and $80k for pickups, SUVs and vans,
I do agree the $80k number is high, probably to help companies like Rivian but trucks like the F-150 lightning and GMs offering seem to be in that price range. The avg cost of a new vehicle is approaching $50k . One very questionable aspect of this bill is whether the US will be capable of producing cost competitive lith-ion batteries, likely not so this may impact the stated goal of lowering the cost of EVs, but to be dependent on a country whose geo -political aspirations are increasingly in conflict with those of the US in another can of worms.
The solar tax incentives were designed to promote clean energy and help the US industry, but with respect to the latter most of it has gone to China, you may recall startup firms in CO that were in solar panel mfg and are now defunct, many accuse China of unfair trade (dumping) practices. In some ways that experience may have influenced the EV tax incentive rules.

Taxpayers subsidize a whole lot of things - most forms of energy (ethanol cost us billions annually) roads, aviation, agriculture, etc. And of course in CO the re-intro of the wolf, lol.

 

[D Fresh]

Some people are against the gov getting into loan biz (remember the mortgage debacle and bailouts) , many opposed the bailout of the auto industry yrs back, but I think upstream in this thread we have people discussing their elation with tax incentives for residential solar, an investment which is out of reach for many lower income home owners, yet these same folks criticize tax incentives for EVs , I can see your point about the price point - I mistakenly said $80 k which is wrong as it's $55k for EV cars and $80k for pickups, SUVs and vans,
I do agree the $80k number is high, probably to help companies like Rivian but trucks like the F-150 lightning and GMs offering seem to be in that price range. The avg cost of a new vehicle is approaching $50k . One very questionable aspect of this bill is whether the US will be capable of producing cost competitive lith-ion batteries, likely not so this may impact the stated goal of lowering the cost of EVs, but to be dependent on a country whose geo -political aspirations are increasingly in conflict with those of the US in another can of worms.
The solar tax incentives were designed to promote clean energy and help the US industry, but with respect to the latter most of it has gone to China, you may recall startup firms in CO that were in solar panel mfg and are now defunct, many accuse China of unfair trade (dumping) practices. In some ways that experience may have influenced the EV tax incentive rules.

Taxpayers subsidize a whole lot of things - most forms of energy (ethanol cost us billions annually) roads, aviation, agriculture, etc. And of course in CO the re-intro of the wolf, lol.

Yeah, not a fan of subsidies of any type. And of course there are many, at almost every level of government. And while government backed loans have their own pitfalls, they're better than straight up cash when buyers are well qualified.

But the "green energy" tax credits are the worst of the bunch. Especially in the car market. A $40k or $50k vehicle is a luxury. Hell, any new vehicle is a luxury. And there's no reason anybody should need any help paying for one if they want one.

I feel the same way about solar panels by the way. You want them? Great. You pay for them. But don't ask me to buy them for you.

 

[dtech]

Yeah, not a fan of subsidies of any type. And of course there are many, at almost every level of government. And while government backed loans have their own pitfalls, they're better than straight up cash when buyers are well qualified.

But the "green energy" tax credits are the worst of the bunch. Especially in the car market. A $40k or $50k vehicle is a luxury. Hell, any new vehicle is a luxury. And there's no reason anybody should need any help paying for one if they want one.

I feel the same way about solar panels by the way. You want them? Great. You pay for them. But don't ask me to buy them for you.

Just one comment as you reside in CO - the economic development committee or whatever it is called continues to provide big tax breaks and additional incentives to companies to relo here, as if it's needed , and these relos are predominantly $120k + wage earners, and then we have to subsidize affordable housing for the folks who can't afford the absurd housing market,( my daughter being one of those) plus suffer the other negatives (road congestion, air quality, rising crime rates, etc) , but it allows our elected officials to bask in the accolades. Inflation reduction act , my *ss, but the bill does make some large companies pay some level of taxes that many were allowed to avoid.

 

[D Fresh]

Just one comment as you reside in CO - the economic development committee or whatever it is called continues to provide big tax breaks and additional incentives to companies to relo here, as if it's needed , and these relos are predominantly $120k + wage earners, and then we have to subsidize affordable housing for the folks who can't afford the absurd housing market,( my daughter being one of those) plus suffer the other negatives (road congestion, air quality, rising crime rates, etc) , but it allows our elected officials to bask in the accolades. Inflation reduction act , my *ss, but the bill does make some large companies pay some level of taxes that many were allowed to avoid.

Yep, last one I remember was Arrow Electronics.

"Affordable housing" is the next tax scam coming to our state from what I can tell.

 

[dtech]

Yep, last one I remember was Arrow Electronics.

"Affordable housing" is the next tax scam coming to our state from what I can tell.

Well it's ongoing, a few bits from the Denver Biz Journal:

While Colorado has recently focused on luring Australian companies to relocate or expand in the state, including launching a first-of-its-kind AUSDenver Business Hub here, the largest approved incentive offer at Thursday's EDC meeting went to "Project Chamomile," a health tech company that was the first to develop a clinically proven target treatment for diabetes.

EDC voted to offer $6.9 million in job growth incentive tax credits to the company.

Now the EDC can only offer incentives if the targeted companies create jobs that are equal or above the area's avg wage - the Project Chamomile above is a firm headquartered in San Fran, so the wage stipulation is a no brainer for the firm but talk about fanning an inflationary spiral and the resulting gentrification issues. Not totally anti-growth but offering incentives to a lot of companies that would likely relo to CO anyways is beyond my comprehension.

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