Featured New federal EV incentives

As far as I can tell from the Chairman's mark on the Senate Finance committee website, nothing changes to the formula used to calculate the credit. There are two potential $2500 bonuses, for final assembly in the USA (which does not apply) and final assembly at a unionized facility (which might apply since there are Japanese unions?) Thus, maybe $4,502 and maybe $7,002.

 

might be time to take that depreciation hit ...









no I'm kidding, it's never time to throw away money. ;-)

 

Disturbing. From the article ;

At least in SoCal stickers on the window include percentages made in the US versus other countries. None are made completely here - so what is the percentage that qualifies as made in any given country.
Equally creepy is the disabling of non-union shops, namely Volkswagen in Tennessee & Tesla, both non-union shops. Makes one wonder if it was a right-to-work situation where you could join a union or not. Would just ½dozen union members count for the additional tax incentives?
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Bias of reporting what is actually in the proposed "Clean Energy for America Act" has been interesting. The narrative of victim has focused entirely on EV credits, rather than addressing the true problem. It's a bandage approach. Rather than draw attention to changing the market, only the automaker industry is being treated as a resource needing help. Fortunately, those who read the prepared document by the Senate committee see things differently.

Sadly, the proposal fails to what would really incentivize change... infrastructure for overnight recharging... but it does directly attack the source of how we got into this mess. Section 5 is titled: "Termination and Modification of Certain Fossil Fuel Provisions". Those are magic words for anyone who has been involved with trying to make change a reality, struggling for decades to address the true source of the problem. The proposal sunsets some amortization & deduction incentives and repeals a number of credits. In short, this is a mark in history indicating we are past "peak oil" and that industry is now seeing the loss of subsidies as a result.

Additionally, trust funds for oil spill liability are being modified. Excise tax for this will modify definition of "crude oil" by expanding to encompass crude oil from tar sands and oil shale.

Lastly, there is also a repeal of credits related to advanced coal and gasification projects.

 

The specifics are an extra $2500 for any vehicle that has its “final assembly” done in the USA.

Important note for everyone. This is a proposal, it can still change, and may not even pass the senate.
We have a long way to go before this is law, but at this stage it looks really really good.

 

sadly, any improvements will be reversed politically, down the road

 

Currently the Ford ranger is top in us content at 85%. The tesla's are around 75%-80% and this could grow if suppliers opened US plants ;-) The Ford F150 electric likely will be around the same. The chevy bolt was only 20% US content, but its assembled in a US union shop, so it will get a bonuses which doesn't make much sense to me.

IMHO the incentives are too large and not at all targeted. The original incentives did their work, except for the sunset clauses. The US model 3 standard range plus will soon have batteries that only cost around $6000/pack once they move to less expensive battery chemistry like they have in the made in china ones. Its kind of crazy that cars assembled with union labor in the US with similarly sized batteries would get $12,500.

 

Well, in order to be able to fully utilize the $12500 tax credit, I will have to start working second and third jobs to have enough taxable income. For most average Americans, the increased tax credit does not translate to more savings.

Edit: There seems to be a change in the tax credit proposed to make this a refundable tax credit. So my concern is less now. See comments below.

 

Per the current proposal, that won't be true as of Jan 1st, 2022.
At that point, the tax rebate becomes a tax credit.

For more details about the current proposal:

 

Thanks for the linked video. Yes, at 4:58 the video explains that if the proposal becomes a law, what is now a non-refundable tax credit will become a refundable tax credit. Just editorial, your statement is incorrect. It was never a tax rebate, it is a non-refundable tax credit currently but under the proposal, it will become refundable tax credit after Jan 1st, 2022. That is a big change that would make more car buyers benefit from it regardless of their income level (i.e. tax liability level). The only thing is that it means that under the new rule, some of the buyers are going to get credit from the money other taxpayers are paying, unlike the current tax credit that is getting a discount on one's own tax liability. This may not fly well with some folks, especially in the (R) constituency.

 

The article specifies US union plant.

If it is based on percentage US, we have a value for what makes a car domestic made vs import from the CAFE fleet definitions.

 

History is being ignored. It's really unfortunate that some believe any type of incentive expiration or removal will somehow put the genie back in the bottle. Even if Tesla fails to deliver an affordable choice for the masses or if the base model of F-150 Lightning remains a choice only for commercial sales, that won't change the reality of them having exposed the world what change has to offer. In fact, that is exactly what Toyota has been doing with fuel-cell technology. We all know it will be primarily used in commercial industry related to construction, merchandise, and mass transportation. It's the exposure to that which brings about endorsement & support.

With regard to these incentives, they will be problematic. Look at what similar subsidies did to China's market. There was no goal of profitability in mind or sustainable sales beyond the subsidy. There was hope of a magical shift to green choices, but that isn't what actually happened.

 

Gotta share, I’ve already got a 2019 Model 3. It is NOT for sale, and continues to fully meet my requirements.

Bob Wilson

 

EVs in China currently have about a 6% market share. I’d say their incentive programs are working better than those in the USA.
Perhaps you could expand on what you don’t like about the incentives being proposed rather than vague comparisons to supposedly poor results elsewhere.

 

It is amazing how Toyota has changed the automotive landscape. In Kentucky many people in Central Kentucky are loyal to Toyota because of the Toyota Plant located in Central Kentucky.
While out walking around our small city this beautiful evening I notice how many vehicles pull up to stop signs silently. Then pull away silently. Most people around here drive Toyotas because of their loyalty to Toyota. The vehicles where Hybrid -Camry's, Avalon's. Priuii and Corolla's.
What a tremendous impact on the environment and automotive design these vehicles have made.

We own a PHEV vehicle as a direct result of the wonderful experience we had with a 2008 Prius.

It is exciting to imagine Toyotas entry into the EV field and what Engineering credentials they bring to automotive design and Hybrid technology. Their possibilities are exciting to imagine.

As far as incentives I appreciated the $4,500 for our plug in but it wasn't a deciding factor in our purchase. I am tempted to say the government should keep their noses out of the private marketplace and let economics drive peoples decisions.
We have had a regrettable experience with Health Insurance Premiums when the government stuck their nose into the Private Health Marketplace.

 

If Washington does head down China’s state-heavy road, Beijing’s experience offers crucial lessons. Subsidies to automakers and their customers might be necessary to give the industry the initial push it needs, but excess generosity could prop up failing firms. Taxpayer money might be more productively spent supporting R&D and building infrastructure such as charging stations, because in the end, the electric-vehicle war will be won in research labs and car showrooms, not the halls of Congress.

The Electric-Car Lesson That China Is Serving Up for America - The Atlantic

 

Needs to apply only to sub $50,000 cars, be a subsidy to those who have inadequate income, and likewise not apply to those above a certain income level and also have a limit on how many each human can use.

Refundable goes a long way, see if 1 or 2 really happen

At the end of the day I usually buy used and rather see no credits but instead ban EV road taxes until certain benchmarks are met and likewise some federal guidelines to properly index / limit EV fees once they become a significant portion of vehicles on the road with charge infrastructure
In this way we aren’t choosing the wrong winners and giving EV owners the turd sandwich.

I had never had health insurance until the change

My mom paid 3/4 of her annual income for insurance that exempted virtually everything including cancer which she eventually got.

This changed after healthcare law changed.

Im of the mindset that insurance isn’t really possible to operate privately, including the joke that is mandatory car insurance and market based utilities.
It seems like everyone outside the US has a better take on the public good like health care.
Not sure why we can’t do anything efficiently or effectively.

 

the history of even yesterday is only fit to wrap yesterdays smelly fish bones in - prior to going in the garbage can. so true
it's been SOOO disgusting going down to Toyota to check Rav4 Prime premium prices w/ the mediocre 6.6 chargers (the best they offer) - only to find they mark them up $10,000 ...... after all you get $7,500 from feds (in many instances) & maybe $2,500 from the State rebate program here. Did anyone mention how badly they hate dealership sleeze? After showering ... to remove the filthy film of bad dealership experience ... who wants to go back?!? Go ahead Fed's ..... make the free tax money EV incentives $40,000 .... & the stealer ships will jack the price $40,000.
All that does is enrigh big business ... as well as those that can afford a $61,000 RAV !!!
and yes john - that's what happened to the GM Volt too - that you continue to hate on.
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