Alternate NEW Tax Credit Rebate

[AdamsFan1983]

....I mean, I wouldn't be surprised if the garden variety idiots in congress, peruse these forums for directions on writing laws.

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[yizzung]

....I mean, I wouldn't be surprised if the garden variety idiots in congress, peruse these forums for directions on writing laws.

Nah. Too much work. Easier to just have the oil/gas lobbyists write them on their behalf.

in all seriousness though, gas prices are one of the biggest motivators/obstacles to the EV market. In Norway, it’s $8/gallon. In the US it’s currently, what, $3?

We subsidize oil/gas exploration to the tune of $16B a year, which keeps those gas prices low and keeps ICE cars looking like great options.

So we’re paying people to abandon ICE while also paying them to keep buying them. Smart.

 

[Scott]

Nah. Too much work. Easier to just have the oil/gas lobbyists write them on their behalf.

in all seriousness though, gas prices are one of the biggest motivators/obstacles to the EV market. In Norway, it’s $8/gallon. In the US it’s currently, what, $3?

We subsidize oil/gas exploration to the tune of $16B a year, which keeps those gas prices low and keeps ICE cars looking like great options.

So we’re paying people to abandon ICE while also paying them to keep buying them. Smart.

Yup, you nailed it. Other countries both do not subsidize gas, they tax it at a much higher level that more accurately prices in externalities.

And on the "paying for them to buy EVs and paying for them to not buy EVs", Oregon has the brilliant plan of giving out a $2500 tax rebate for EV purchases, but charging double the registration feel. I understand long term the loss of gas taxes will drive up EV registration costs to keep roads maintained, but the two programs side by side when you fill out the paperwork to buy a new car just feel idiotic.

 

[Scott]

counter points:
Both the Hyundai Kona and R1S are classified as SUVs. Those are clearly not in the same category of car for this purpose. So would we batch the Kona by the same restraints as the R1S?

And do we want to provide manufacturers that make a 20 mile PHEV or a 50 mile BEV the same incentive as a.... 300 mile mustang mach e? I doubt it. The 50 mile BEV would likely be a pretty crappy car with very little market except that you could buy it with a tax credit for about $5. And then throw it away with no resell value. I'd rather subsidize cars that are reasonably competitive or have a minimum range to them.

While I do generally agree with you that you don't want to encourage people to "oversize" their batteries, you do want to get as many gas guzzlers off the stress as possible. There is a lot less value in replacing an inexpensive 40 mpg corolla with a BEV than replacing a Nissan Armada or F150. And if you're buying a Nissan Armada you aren't buying a car with 50 miles range. We've been down this route before and U.S. buyers didn't buy 100 mile cars in droves.

- you can easily classify 2 and 3 row SUV's in different categories. You can also classify crossover vs SUV, or do it by weight. All solvable problems

- I am not concerned about the market being flooded with 50 mile BEVs. They won't sell. The cost difference to produce a 50 mile BEV vs a 120mile BEV like the mini cooper SE is not high, and the mini cooper SE actually fits a market for around town drivers. Manufactures aren't likely to produce junk that consumers don't want when a marginal increase in cost will produce a compelling product.

- I am not trying to incent people to downsize to a smaller car. You want to incent people to buy something they actually want. I just don't want people to be able to get more than they want at the same price as what they desire. My idea of incenting via emissions reduced rather than range handles that fine (yet with the added complexity of having to have valid classifications). But again, I am also fine with the current bill once you remove the union labor provision and replace hard caps with phase outs.

 

[DucRider]

And on the "paying for them to buy EVs and paying for them to not buy EVs", Oregon has the brilliant plan of giving out a $2500 tax rebate for EV purchases, but charging double the registration feel. I understand long term the loss of gas taxes will drive up EV registration costs to keep roads maintained, but the two programs side by side when you fill out the paperwork to buy a new car just feel idiotic.

The Oregon incentives are not related to taxes in any way and are pure rebates.
Title fees and registration are 2x+ (there is a tiered system for ICE vehicles based on MPG).
It is indeed counterproductive.
The standard rebate (up to $2,500) is in theory available as a POS rebate by signing it over the the dealership. A low percentage have elected to participate, and some that signed up refuse to do it for customers that ask Tesla is the largest dealer by volume and they did not sign up.
The "Charge Ahead" rebate is good for an additional $2,500 for those with up to 120% of the median income for their household size in their county (but they use a different definition for both income and household than the IRS and what consumers expect). They have been unable to get it implemented as a POS rebate, are having trouble getting them issued (they do extensive verification on every application), and therefore are distributing less $$ thru the program than they need to. Their solution is to double the amount to $5K starting Jan 1st - which means low income buyers that most need the money to purchase an EV have to float twice as much on the promise that the government will mail them a check later - unless the application is denied.

 

[DucRider]

- you can easily classify 2 and 3 row SUV's in different categories. You can also classify crossover vs SUV, or do it by weight. All solvable problems

- I am not concerned about the market being flooded with 50 mile BEVs. They won't sell. The cost difference to produce a 50 mile BEV vs a 120mile BEV like the mini cooper SE is not high, and the mini cooper SE actually fits a market for around town drivers. Manufactures aren't likely to produce junk that consumers don't want when a marginal increase in cost will produce a compelling product.

- I am not trying to incent people to downsize to a smaller car. You want to incent people to buy something they actually want. I just don't want people to be able to get more than they want at the same price as what they desire. My idea of incenting via emissions reduced rather than range handles that fine (yet with the added complexity of having to have valid classifications). But again, I am also fine with the current bill once you remove the union labor provision and replace hard caps with phase outs.

Care to "put pen to paper" and see if this is as easy to do as you claim?
Should a Prius Prime get any rebate? Compared to the equivalent pure hybrid versions it can actually have greater emissions in some markets. Same goes for the RAV4 Prime.

Trying to do it by weight is difficult when comparing vehicles. How much allowance do you add to EVs to account for the heavy batteries?

What are you proposing for the phase out on the caps? Different schedules for the different classifications and caps? % based or $ based?

 

[Scott]

Care to "put pen to paper" and see if this is as easy to do as you claim?
Should a Prius Prime get any rebate? Compared to the equivalent pure hybrid versions it can actually have greater emissions in some markets. Same goes for the RAV4 Prime.

Trying to do it by weight is difficult when comparing vehicles. How much allowance do you add to EVs to account for the heavy batteries?

What are you proposing for the phase out on the caps? Different schedules for the different classifications and caps? % based or $ based?

No I don't. Being solvable problems, and being a solvable problem by me in my spare time are different things.

When we are talking about billions of dollars of taxpayer money being spent here, having a little complexity be put together in order to spend that money efficiently is a good thing. It is a good use of cash to pay a few lawyers to draft up a bill that maximizes the efficacy of that expenditure and spend a few weeks doing so. If you want to state you don't trust the government to actually do that without catering to special interests and adding in needless waste I won't argue with you though. That is the MO of government spending.

In the end, I think we both agree that early investment by manufactures should be supported, and we believe that the rebate programs are good in theory to sway consumer behavior. To have a fully educated opinion of what the best way to do that is takes real time. I personally don't believe basing off of range is a good idea, and my gut says that higher cost vehicles and higher income people are the wrong place to concentrate those rebates. It follows logically as rebates are a smaller percentage of the purchase price for expensive cars and the more money you make the less sensitive you are to a few thousand dollars of cost. But, I haven't done a study and might be wrong.

 

[Scott]

The Oregon incentives are not related to taxes in any way and are pure rebates.
Title fees and registration are 2x+ (there is a tiered system for ICE vehicles based on MPG).
It is indeed counterproductive.
The standard rebate (up to $2,500) is in theory available as a POS rebate by signing it over the the dealership. A low percentage have elected to participate, and some that signed up refuse to do it for customers that ask Tesla is the largest dealer by volume and they did not sign up.
The "Charge Ahead" rebate is good for an additional $2,500 for those with up to 120% of the median income for their household size in their county (but they use a different definition for both income and household than the IRS and what consumers expect). They have been unable to get it implemented as a POS rebate, are having trouble getting them issued (they do extensive verification on every application), and therefore are distributing less $$ thru the program than they need to. Their solution is to double the amount to $5K starting Jan 1st - which means low income buyers that most need the money to purchase an EV have to float twice as much on the promise that the government will mail them a check later - unless the application is denied.

True, they are rebates, but they are related to taxes as they are an expenditure of taxes gathered. The money comes from somewhere. I did just get the $2500 POS rebate on my ID.4 and turn around and pay an extra $300 on registration. It made me laugh. It isn't the end of the world and I understand the point of the two different laws / programs, but like you said it is a bit counterproductive.

 

[Bobthebuilder352]

So if I buy 7.5 Rivian’s I get the 8th one free. Done and done

 

[Trekkie]

Personally I like the idea of an income cap, but I'd want it to be something like 400k married/200k single filer.

I definitely would like to see the battery size increase a lot, PHEVs with 20 miles of range do not deserve a rebate, yet many get the full rebate right now.

It increases complexity but a 'how much are you improving emissions' would be a great thing, but tax code and complexity are an anathema. I've seen problems just with the rebate and vehicles like the Audi etron which for some reason was getting rejected a lot the first year it came out as 'not valid, not an EV' so trying to track all that info would be a nightmare.

 

[TessP100D]

All reasonable points, I still however think that range should not be a factor in the rebates. The American consumer is already overly fixated on EV range, when most of them only drive more than 50 to 100 miles a day a handful of times a year. Smaller cars, with smaller batteries can be made cheaper. Giving people bigger rebates to buy more car than they need isn't something I think the tax payer should pay for. Plus, the American consumers obsession with range has already created all the incentive needed for manufactures to maximize range.

In this case when talking about applying government rebates you are really talking about how to get the most emission reductions for taxpayer dollar spent. Income level and vehicle cost phase outs make sense to me in that regard. The higher the price and income level, the more likely the consumer is to be getting what they want regardless of other factors. Sure there are some price sensitive people buying 130k cars with a 500k income, but nearly everyone with a < 100k income buying a 35k car is extremely price sensitive.

In terms of complexity, we already have cars classified by segment and have average mpg figures, so I don't view it as overly complicated.

Range is King. It’s is absolutely the number one thing.

 

[TessP100D]

Nah. Too much work. Easier to just have the oil/gas lobbyists write them on their behalf.

in all seriousness though, gas prices are one of the biggest motivators/obstacles to the EV market. In Norway, it’s $8/gallon. In the US it’s currently, what, $3?

We subsidize oil/gas exploration to the tune of $16B a year, which keeps those gas prices low and keeps ICE cars looking like great options.

So we’re paying people to abandon ICE while also paying them to keep buying them. Smart.

5.09 per gallon is what I paid to fill up my wife’s car just the other day in California. 3.00 would be a deal

 

[Dark-Fx]

I'd rather see ICE vehicles taxed at a higher rate than any weird formula to derive tax credits for EVs. Slap a 10% tax on every ICE vehicle and you'd be pushing a lot of people towards avoiding it.

 

[Scott]

Range is King. It’s is absolutely the number one thing.

If you drive a LOT daily, then it should be. You need to pick a car that works for your driving habits. But for most people, I think the American EV market is too fixated on range. And for total clarity, I too was fixated on it too much when searching for our last car. I was focused on inconvenience the 4 times a year when I might go over 200 miles of driving in a day, rather than what I do the other 360 days a year. The average American's driving habits means that range has extreme diminishing returns after say 200-250 miles of range. At 250 miles of real world range you get 200 miles when topped up to 80%. Even a 100mile round trip commute (which is way above average) leaves you with the ability to handle any abnormality in your day. A 200mile range = 160 miles on 80% charge. For a more normal 50 mile round trip commute that still leaves you with that 100miles of buffer.

I am hopeful that once the charging network is more mature people will not worry about this as much. right now charging for many people is a concern and raises anxiety.

<insert standard caveats about range being actually important if you drive a ton daily, do a lot of offroading, yada yada yada>

 

[Scott]

5.09 per gallon is what I paid to fill up my wife’s car just the other day in California. 3.00 would be a deal

I would be 100% fine with $8 to $10 per gallon due to taxes. Pricing in externalities leads to people making better decisions. However it is politically unfeasible, and also it is an extremely regressive tax.

I'd rather see ICE vehicles taxed at a higher rate than any weird formula to derive tax credits for EVs. Slap a 10% tax on every ICE vehicle and you'd be pushing a lot of people towards avoiding it.

I also would be totally fine with this. Taxes based on car emissions acurately prices in the negative environmental impact. 2 big problems here:
1. Political viability: not going to happen
2. It doesn't account for amount the car is driven in to its impact. Buying a toy gas guzzler you only use once a month on a race track or something isn't a big deal. It is entertainment. But driving a 10 MPG car 100 miles daily..... This is why gas taxes are a little more accurate in terms of pricing impact.

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