Newest language on the EV incentive

[crashmtb]

MSRP based incentives leave all kinds of room for gaming the system.

Under this scenario, an SUV with an MSRP of $69K that a dealer applies a "market adjustment" of $20K to bringing the actual sale price to $89K would qualify.

Oregon's incentive qualification depends on "Base MSRP" and has a $50K limit (this would allow for the installation of accessories). The Tesla Model Y qualifies, yet the cheapest you can buy/order is $53,990 (destination and handling are not included in the MSRP definition). Huh? Seems since Tesla has run the RWD Standard Range thru EPA, gotten it a Monroney Label and adds on the bigger battery, 2nd motor, etc to the "Base" model.

In Canada, Tesla sells - at least on paper - a software crippled Standard Range Model 3 with 151 kM (94 miles) of range to get under a $45K cap and qualify for Trans Canada's iZEV rebate of $5K. Offering this option (it can be "unlocked" later since it is software limited), allows the non crippled SR and even the SR+ to qualify as well.

Washington States EV incentive is tied to actual purchase price, and that is the metric that makes the most sense.

The MSRP limit is now $55k for the izev program, FYI.
https://tc.canada.ca/en/road-transp.../incentives-purchasing-zero-emission-vehicles

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[DucRider]

The MSRP limit is now $55k for the izev program, FYI.
https://tc.canada.ca/en/road-transp.../incentives-purchasing-zero-emission-vehicles

In order to qualify a 6 seat or less vehicle, they have to offer a version <$45K, but if they do then other versions of the same vehicle up to $55K qualify. From your link:

• a vehicle with six seats or less, where the base model Manufacturer's Suggested Retail Price (MSRP) is less than $45,000; and
  • higher priced versions of these vehicles, up to a maximum MSRP of $55,000, will also be eligible for purchase incentives;

 

[crashmtb]

In order to qualify a 6 seat or less vehicle, they have to offer a version <$45K, but if they do then other versions of the same vehicle up to $55K qualify. From your link:

• a vehicle with six seats or less, where the base model Manufacturer's Suggested Retail Price (MSRP) is less than $45,000; and
  • higher priced versions of these vehicles, up to a maximum MSRP of $55,000, will also be eligible for purchase incentives;

Yes. I know. But previously there was no allowance for the “higher priced version”.

 

[Ladiver]

Hmm, I like the idea of applying the rebate at time of purchase but that will cost me even more in the long run.

Remember that a tax credit offsets your liability, so if you are in the 24% tax bracket that $7500 credit has a pre-tax value of $9,300. That is what the discount should be.

 

[Autolycus]

Hmm, I like the idea of applying the rebate at time of purchase but that will cost me even more in the long run.

Remember that a tax credit offsets your liability, so if you are in the 24% tax bracket that $7500 credit has a pre-tax value of $9,300. That is what the discount should be.

No, that’s not valid reasoning. The government is giving you a credit of $7500. Period. The income that would be required to generate that amount of tax liability is irrelevant because there are varying income tax brackets. The government wants to subsidize a fixed amount of EV purchase, not a fluctuating amount of income.

 

[Ladiver]

No, that’s not valid reasoning. The government is giving you a credit of $7500. Period. The income that would be required to generate that amount of tax liability is irrelevant because there are varying income tax brackets. The government wants to subsidize a fixed amount of EV purchase, not a fluctuating amount of income.

Yeah, after reading my response, it is a better exmple of the gov giving you a deduction. I should probably stay off the internet until I get enough sleep to think straight and not say stupid stuff.

 

[crashmtb]

I should probably stay off the internet until I get enough sleep to think straight and not say stupid stuff.

if everybody did that, every forum would get real quiet ?

 

[Mjhirsch78]

Yeah, after reading my response, it is a better exmple of the gov giving you a deduction. I should probably stay off the internet until I get enough sleep to think straight and not say stupid stuff.

Heh, we’ve all been there.

 

[EarlyAdptr]

EV Credits language in Reconciliation Bill

To start, all of this is subject to change, but the way it is right now, the language leaves Rivian SUV out of the all the incentives.

• $4,000 base amount
• $3,500 if the EV has a battery of at least 40kWh
• $4,500 if the final assembly occurs at a domestic, unionized plant
• $500 if at least 50% of components and battery cells are manufactured in the US.

The credit is now refundable, and can be remitted to the dealer at the point of sale. There are also new MSRP restrictions, so any EV above the following MSRP's is ineligible for a credit:

• $55,000 for a sedan
• $64,000 for a van
• $69,000 for an SUV
• $74,000 for a pickup

The language related to EV incentive starts on page 282. https://waysandmeans.house.gov/site...ans.house.gov/files/documents/SUBFGHJ_xml.pdf

I am not sure if Rivian is doing any Lobbying activities, but i hope they are talking to Congress.

I live in Washington State. Can't comment on any DC lobbying, but I played golf a few months ago with a state lobbyist and to my surprise he informed me his most recent client was.. (wait for it)... Rivian!

I have to believe (assume) if they're engaging a lobbyist in WA State then they're also engaging at the federal level.

 

[Max]

That $69k cap on SUVs is a real kick in the pants

If that does not include options, every vehicle can qualify; manufacturers set MSRP just under the limit and make battery, wheels and doors optional for 10 grand each.

 

[mkennedy1996]

This may have been tongue in cheek, but I think Rivian has to revisit their pricing if this passes as is and I think they probably have a small army of financial analyst running the margin numbers. And I don't think it just applies to the base model either, I think they have to look at some of the color options and adventure package as well.

Consider, if the base model gets knocked down to $67,500 so that you can pick a few colors and still come in at 69k, now the adventure package is in reality a $13k option because you are paying $5,500 for the package in addition to the $8,000 tax credit you just lost. That's a huge factor for most buyers. Realistically, they would need to get the base cost down to $62k or so to still be able to capitalize on this benefit. Whether they have the margin to make that feasible is another story.

They could sell the R1S for $69k with a software limited battery. Once you take delivery, pay the $8k upgrade charge to unlock the battery. You end up paying the same price for the vehicle and you qualify for the incentive.

 

[nfrank]

What the problem here is that Rivian designed and marketed vehicles that were eligible for the rebate. They don’t get a chance to go back and design a model that fits the new rebate scheme. I don’t have a problem with the change, except it would be more fair to roll it in after manufacturers have time for a design cycle.

I’m only guessing, but if this new law were announced years ago Rivian may have offered a simpler vehicle at launch with a lower price and also set up their line as union. The demand would be much higher as the vehicles effectively get much cheaper

 

[flabyboy]

Is anyone really confident this happens in the next year or two. I have my doubts. If it isn't done by Jan 2023 after the midterms, than I doubt it happens at all. I'm really going to have to work on my withholdings to get the full credit as it is

 

[Eeyore]

That $69k cap on SUVs is a real kick in the junk

That's where I'd feel it.

 

[Zoidz]

It's clear that to the politicians, any EV rebate or tax credit is nothing more than a political bargaining chip. They could give a rat's @$$ about moving the EV industry forward in the US, or reducing vehicle emissions via EV adoption. We need a National Energy Policy that promotes the purchase of EVs at all levels, regardless of vehicle price or personal income.

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