Featured Manchin climate bill and EV Tax credit reinstatement

Thanks for the summary.

I guess, it is best to hold off on the purchase of a BEV until we have a definite law in place. Yeah, a full refund applied at the point of sale is a huge advantage over the current tax credit. I hate to jump the bandwagon this year and purchase a BEV only to find out that if I waited for 6 months I could get it for less.

 

what's to say the stealerships won't take advantage of these incentives by jacking up the prices, as they already do.

 

I happened to be checking inventory on Toyotas in a neighborhood I used to live in. Would cost me an extra $12k to buy the same car I bought 3 years ago. And 8 of that is dealer profit and add-ons. Yes dealers will profit.

And don't assume the bill as written is going to pass. Wait till it has passed and is signed. It still only takes one vote to block it.

My local Senator just voted no on a bill he was a sponsor of.

Vote all the bums out, even yours.

 

i've been trying to get rid of ed markey for the last 50 years

 

https://electrek.co/2022/07/27/senate-moves-forward-ev-tax-credit-reform-tesla-tsla/

Update: here’s a more detailed look at what is in the bill written by an actual lawyer, Chris Stidham:

New-Vehicle Credit

1. Manufacturer caps eliminated. (Page 370, line 15)
2. Credit applies for vehicles purchased beginning January 1, 2023. (Page 386, line 1).
3. Transition provision for EVs with written sales orders dated in 2022 prior to the date of President signing the bill but delivered in 2023 allows purchaser to claim the “old” credit in 2023. (Page 386, line 20).
4. Vehicle must be assembled in North America to qualify for new credit. (Page 366, line 15).
5. North American assembly requirement applies to vehicles sold after the date of adoption of the bill. (Page 386, line 3)
6. $7,500 credit is broke into two binary pieces meaning the vehicle either qualifies for each piece of the credit or it doesn’t. No longer based on size of battery. (Page 366, line 6)
7. $3,750 of the new credit is based upon the vehicle having at least 40% of its battery critical minerals from the United States or countries with a free trade agreement with the United States. This is a list of countries with free trade agreements with the US.(Page 371)
8. The other $3,750 of the new credit is based on at least 50% of the battery components of the vehicle coming from the United States or countries with a free trade agreement with the US. (Page 372, line 13)
9. The 40% minerals requirement increases to 50% in 2024, 60% in 2025, 70% in 2026 and 80% in 2027. (page 371 line 23)
10. The 50% battery components requirement increases to 60% in 2024, 70% in 2026, 80% in 2027, 90% in 2028 and 100% in 2029. (Page line 373)
11. The government has until the end of the year to develop guidance on the battery requirements. (Page 374)
12. Beginning in 2025, any vehicle with battery minerals or components from a foreign entity of concern are excluded from the tax credit. (Page 374, line 20).
13. One credit per vehicle. (Page 375, line 12)
14. Modified gross income limit of $150k for individuals, $225k for head of household, and $300k for joint returns. Definition of MAGI (page 375, line 22)
15. MSRP of vehicle must be $80k or less for SUVs, Vans and Trucks. $55k for all other vehicles. (Page 377, line 4)
16. Dealer can apply credit at time of sale. Dealer must disclose to buyer the MSRP of the vehicle, the applicable tax credit amount and the amount of any other available incentive applicable to the purchase. (Page 378, line 6)
17. Credit terminates December 31, 2032.

Used-Vehicle Credit

1. Tax credit of 30% of value of used EV with $4,000 cap (Page 387, line 23).
2. Used vehicle must be at least two model years old at time of sale. (Page 389, line 7).
3. The original use of the vehicle must have occurred with an individual other than the one claiming the used tax credit. (Page 389, line 10).
4. Used vehicle must be purchased from a dealer. (Page 390, line 3).
5. Used vehicle price must be $25k or less. (Page 390, line 5).
6. Used vehicle qualifies for tax credit only once in its lifetime. (Page 390, line 7)
7. Purchaser must be an individual (no businesses) to qualify for used credit. (Page 390, line 14).
8. Purchaser may only claim one used vehicle credit per three years. (Page 390, line 20).
9. Modified gross income cap of $75k for individuals, $112,500 for head of household and $150k for joint returns. (Page 388).
10. Credit may be applied at time of sale by dealer. (Page 391, line 15).
11. Credit terminates on December 31, 2032. (Page 391, line 12).

 

Fwiw, the final details will change. And, it may be dropped completely.
Btw, all Prius Primes are assembled in Japan - which, last time I checked, is not in North America.

 

They eliminated the Union requirement?
Or am I miss-remembering the original BBB credit?

I like the price caps. The earnings limits are laughable, but eventually inflation will moderate that.

I really like the used EV credits.
I see new life for a lot of 7-8 bar leaves.

We will see….
They SAID it out loud.
Now let’s see if they can push the trash can all the way out to the curb.

 

Thanks for summarizing this complex tax bill. I did not read all... stopped at #4.

4. Vehicle must be assembled in North America to qualify for new credit.

Well, this means non of the Japanese EVs will qualify. How about Korean EVs? Exactly how many BEV are there which would satisfy this checkpoint?

And, item #3 will play a role for someone contemplating buying bZ4X or Solterra or Ariya.

3. Transition provision for EVs with written sales orders dated in 2022 prior to the date of President signing the bill but delivered in 2023 allows purchaser to claim the “old” credit in 2023. (Page 386, line 20).

If I understand this correctly, someone purchasing bZ4X or Solterra or Ariya or any other BEV not assembled in North America in 2022 and took delivery in 2022 would still be able to claim the old credit in 2023 tax return (for 2022 income tax). But for someone who completed the written sales order in 2022 but did not take delivery until after Jan 1, 2023, he/she would also be allowed to claim the old tax credit in 2023 tax return (for 2022 income tax). So provision #3 adhere to the old (meaning current) tax code? If so, bZ4X with written sales order in Aug 2022 but delivered in Jan of 2023 would still qualify for a full $7500 tax credit in the 2023 tax form (2022 income tax). On the other hand, if the sales order is written after the Sep 1, then the tax credit would be half. And if it is purchased after Jan 1, 2023, then it gets no discount since it is not assembled in North America. Am I correct?

Yeah, the plot thickens. I don't know if I should hurry to get a BEV or wait till next year.

 

If BEVs make sense, they make sense without the government kickbacks......

But yeah, $7500 (or $4000) ain't nothing.
If I'm reading the prop correctly (only the briefest skim so far) then a vehicle purchased this year that meets the requirements under the provisions of the bill would qualify for a 2023 kickback.
2022 kickbacks are what they are.

NOTE:
As mentioned above, this is pretty far from being a fait-accompli.
There's COVID, 2022 midterm consequences, a razor-thin house majority, a looming August recess, and the prop still has to pass parliamentarian muster.
Senate leaders don't get their jobs by being dumb or naïve, so there's a pretty good chance that some of this bill will get in under the wire - but there's many a slip between the cup and the lip.

SO...
If I were in the market for an EV, and could actually FIND one that meets the terms of the reconciliation bill I'd be tempted to buy sooner rather than later. I'd use the limits set forth under the current legislation as a guide and try to stay away from the guard-rails, because all of the objectionable parts of the legislation (like, how to PAY for it) be the parts that change, and the shiny bauble that draws the eye away from the objectionable part (the kickbacks) will probably survive anything that makes it through reconciliation.

I tried to get the full 750-page bill, hilariously named BTW the “Inflation Reduction Act of 2022” but the source I found during my brief search did not pass my VPN's sniff-test.

 

https://www.leafscore.com/auto/best-american-made-evs-to-watch-in-2022/
I think Bollinger is no more, but there are other models coming from American brands.
Looks like the only foreign brands with NA factories for EVs are VW and BMW at this time.

 

This is the first time I have heard of Bollinger...
Well, maybe I better start looking for ID.4 in stock and cancel the Solterra order.

 

... .- -.-- / .- --. .- .. -. ..--..

 

The .....er....."Inflation Reduction Act of 2022" is also being discussed here:
Detailed breakdown of the new EV tax credit | PriusChat

An interesting one-page...um.... 'splainer from the Bluies:
https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_one_page_summary.pdf

 

I support responsible living including managing the pollution we generate. I ride a bike around town, recycle and have a PHEV. We do our best to live responsibly.

As a citizen who realizes the Government only has money it takes from its citizens, I am wary of any Government giveaways.

With runaway inflation and a National Debt that is hard to actually imagine - where will this money for the "free" program come from?

Wait a minute, I just realized where it will come from as my hand involuntary shot to my wallet to protect it when someone mentioned a Government program.

Why not let things like high gas prices and EV manufacturing competition bring prices down rather than having us citizens subsidize it?

A Government also has the power to legislate car manufacturing just as they did to mandate seat belts and rear cameras.

 

US production only just started for the ID.4.

 

nature of the beast i guess. government is everywhere. as individuals, some things we like, and some we don't.
it can also be based on our position in life, and our attitude toward our neighbor.

i wish all the government money came from taxpayers. unfortunately, they also control the money supply...