Featured Toyota Credit Phase out coming soon

Will Prius sales over take Prius Prime ones then?

 

I wonder how the IRS is going to handle the mid-year phaseout period. If the phase-out starts after Q1, the same car purchased in Q1 and Q2 and maybe Q4 are going to have different amounts of tax credits. Would IRS know that amount automatically with VIN and supposed initial service day?

 

They should have all this sorted out already since Tesla and GM already went through the same process.

 

"The qualified plug-in electric drive motor vehicle credit phases out for a manufacturer’s vehicles over the one-year period beginning with the second calendar quarter after the calendar quarter in which at least 200,000 qualifying vehicles manufactured by that manufacturer have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009) (“phase-out period”). Qualifying vehicles manufactured by that manufacturer are eligible for 50 percent of the credit if acquired in the first two quarters of the phase-out period and 25 percent of the credit if acquired in the third or fourth quarter of the phase-out period. Vehicles manufactured by that manufacturer are not eligible for a credit if acquired after the phase-out period."
Plug In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service

Assuming Toyota hits 200k in 2022Q1, the credit amount is reduced by half in 2022Q3 and Q4, then down to a quarter for 2023Q1 and Q2.

Likely not, but they will ask for supporting documentation if questions about your taxes arise.

 

Thanks. But I think you left out Q2 of 2022 from this hypothetical but very probable scenario.

I think from the quoted IRS code,
Assuming Toyota hits 200k in 2022Q1, full credit in 2022Q1, the credit amount is reduced by half in 2022Q2 and Q3, then down to a quarter for 2022Q4 and 2023Q1. and nothing after 2023Q2.

EDIT: it seems there is a "free" Q after the 200k is reached before phase-out reduction kicks in as stated by the comment below.

In that case:
Assuming Toyota hits 200k in 2022Q1, full credit in 2022Q1 and Q2, the credit amount is reduced by half in 2022Q3 and Q4, then down to a quarter for 2023Q1 and Q2. and nothing after 2023Q3.

 

Oh, I see... If that is the case then the original statement by @Trollbait was correct. I edited my comment above. Thanks.

 

Another visual for Tesla’s phase out schedule.

Link: Federal Tax Credits for All-Electric and Plug-in Hybrid Vehicles

 

Standard Prius is being phased out overseas so who knows?

too bad Toyota didn’t fight for the Biden extension as it would help them too

Breaking: Toyota Is Running Out Of Federal Tax Credits

Toyota has really poorly timed their run out when their inventories of Primes are the lowest unless they won’t sell # 200,000 until they are ready

Surprised I missed this, I knew they were close but with glacial sales I would have expected 2023

 

As I've previously posted from the Tesla and GM phase-outs, the "speed of bureaucracy" creates this "free quarter". All the bureaucratic process works on a calendar quarter basis. The IRS collects official quarterly sales figures, then puts out an official notice about when the phase-out begins. Since sales data collection takes some days or weeks, and the phase-out calendar requires some meaningful advance notice, this process necessarily creates a full "free" cycle, in additional to whatever partial cycle exists from the actual day the limit is reached until the end of that quarter.

If the limit is reached on March 31, then phase-out begins July 1. But if the limit is reached just one day later, April 1, then phase-out is delayed 3 months to October 1.

 

The countdown started with the PiP and Rav4 EV. That's almost a decade of sales to add up.

 

sweet!

I'm not really in favor of using taxpayers dollars to fund rebates.

it would be cool if Chevy could just die too

 

The way things operate some day there will be only one car company

Chevy doesn’t get tax credits and to be honest is usually the best of the big 3

Decade of low volume, seems like they sold more “recently “ than the previous 3 years combined

 

The Prius Prime has been selling around double that of the PiP since its introduction. Up to 2019, their sales was 110k. The Prime should add another 50k since then. Likely more, as it sold almost 12k in 2021Q2, and almost 19k YTD.

The Rav4 Prime was reportedly limited to 5000 for 2020, and almost 10,000 half through 2021. Plus, there is the 3000 Rav4 EVs.

 

Are they counting PiP sales? OK I see it now.

 

Yeah, Toyota lobbied to have the minimum battery capacity of 5kWh lowered so the PiP could qualify for the tax credit.