Sponsored

Newest language on the EV incentive

Chris S

Well-Known Member
First Name
Chris
Joined
Nov 25, 2020
Threads
1
Messages
81
Reaction score
92
Location
Dallas-Fort Worth, TX
Vehicles
'18 Model 3 Perf, '19 MX-5 Club, '22 Model Y Perf
Occupation
REALTOR
To be fair, the top 3 EVs sold in the US are the MY, M3 and the Bolt. None of them have the $7.5K incentive.
I can tell you that Tesla very quickly dropped the M3 price once their tax credits ran out. My M3 Performance bough 8/18 had an MSRP of $75,500.
Sponsored

 

Lobstahz

Well-Known Member
Joined
Nov 22, 2020
Threads
4
Messages
89
Reaction score
164
Location
Boston, MA
Vehicles
R1S, Tesla Model 3, Audi A4
I can tell you that Tesla very quickly dropped the M3 price once their tax credits ran out. My M3 Performance bough 8/18 had an MSRP of $75,500.
As another early Tesla Model 3 owner, they messed with pricing a LOT in 2018, and in particular on the first few months of Performance Model 3's. I think quite frankly they milked their biggest fans for maximum profit, which is good from a business point of view but really off-putting from a customer point of view.
 

DucRider

Well-Known Member
First Name
Gary
Joined
Oct 21, 2019
Threads
17
Messages
1,652
Reaction score
3,143
Location
ORegon
Vehicles
Polestar 2, Ioniq, R1S
As another early Tesla Model 3 owner, they messed with pricing a LOT in 2018, and in particular on the first few months of Performance Model 3's. I think quite frankly they milked their biggest fans for maximum profit, which is good from a business point of view but really off-putting from a customer point of view.
Since Tesla is the dealer, they just change MSRP instead of adding "Additional Dealer Markup" or a "Market Adjustment".

The converse is true when demand drops - so does MSRP (instead of "Factory to dealer incentives).

Result is the same - when demand is high, so are prices. When demand wanes, prices drop.
 

Scott

Well-Known Member
First Name
Scott
Joined
Sep 16, 2021
Threads
7
Messages
361
Reaction score
742
Location
Portland, OR
Vehicles
Subaru Forester, VW ID.4, R1S on preorder
Clubs
 
Hard limits like this are always a terrible idea. Phasing out incentives is much much better. If you put a hard cap on these tax incentives at any single price point, you heavily distort the market in a way that is bad for consumers and manufactures alike. When a 69k SUV really costs 61k after rebates, but a $69,001 SUV costs $69,001, it changes consumer behavior in a really dumb way. You will end up with lots of cars that cost the cap, then a huge gap and lots that cost way more, because pretty much no one is going to order stuff in the donut hole in the middle.

However if instead of saying there is a hard cap for SUVs at 69k you say that the incentive begins to phase out at 60k and when it hits 80k the incentive is totally gone, you make things much more palatable. Sure when you add that $1500 paint job you lose $200 of the rebate or something like that, but it is still somewhat reasonable to get the car you want.
 

Scott

Well-Known Member
First Name
Scott
Joined
Sep 16, 2021
Threads
7
Messages
361
Reaction score
742
Location
Portland, OR
Vehicles
Subaru Forester, VW ID.4, R1S on preorder
Clubs
 
I will add I am also heavily in favor of caps on vehicle cost (and income levels) for these rebates. I bought my first EV recently and would have done so without the incentive. The government is wasting money on people with means who want an EV. I would rather have much bigger incentives to make the battery cost palatable to those with less wealth / income and speed up our environmental impact.

It is all about efficient budget allocation to incent the behavior desired, which is also why I am totally against the union labor boost to the rebate. That has nothing to do with speeding up EV adoption and everything to do with political impact for the politicians drafting the bills.
 

Sponsored

Autolycus

Well-Known Member
Joined
May 2, 2021
Threads
14
Messages
2,030
Reaction score
3,116
Location
ATL
Vehicles
ICE only :(
I will add I am also heavily in favor of caps on vehicle cost (and income levels) for these rebates. I bought my first EV recently and would have done so without the incentive. The government is wasting money on people with means who want an EV. I would rather have much bigger incentives to make the battery cost palatable to those with less wealth / income and speed up our environmental impact.

It is all about efficient budget allocation to incent the behavior desired, which is also why I am totally against the union labor boost to the rebate. That has nothing to do with speeding up EV adoption and everything to do with political impact for the politicians drafting the bills.
Where I will disagree is that the environment is MUCH better off is someone cross shopping a Ram TRX and a Rivian R1T is incentivized to buy the Rivian instead of the RAM. Same for someone cross-shopping a Tesla Model S and a 7-series or whatever equivalent luxury sedan is in the same price range. It probably has a bigger environmental impact in that price range because those ICE cars tend to have the worst gas mileage.

Also, not really replying to Scott as much as others: Phase outs are MUCH better than hard caps!!
 

Scott

Well-Known Member
First Name
Scott
Joined
Sep 16, 2021
Threads
7
Messages
361
Reaction score
742
Location
Portland, OR
Vehicles
Subaru Forester, VW ID.4, R1S on preorder
Clubs
 
Where I will disagree is that the environment is MUCH better off is someone cross shopping a Ram TRX and a Rivian R1T is incentivized to buy the Rivian instead of the RAM. Same for someone cross-shopping a Tesla Model S and a 7-series or whatever equivalent luxury sedan is in the same price range. It probably has a bigger environmental impact in that price range because those ICE cars tend to have the worst gas mileage.

Also, not really replying to Scott as much as others: Phase outs are MUCH better than hard caps!!
On a single car basis you are right, but my logic follows like this:

1. the higher the price of thee car AND the higher a buyers income, the less the incentive plays in to the equation. At some point people get what they want. Someone cross shopping a Taycan is unlikely to be swayed by $7.5k very much. Sure it is a perk, but not the deciding factor

2. In measuring total impact, it matters both the per car impact and the total volume of sales. Concentrating incentives on car classes and price points that have the highest volume multiplies the per car impact by a larger amount. I couldn't find good data with a quick google search on new car sales distribution by price point, but I am willing to bet many many more cars are sold with a price below $40k than above. While the average car price is around $40k, that is distorted by the impact of trucks and luxury cars that sell for much much more.

When looking at volume, while pickups account for around ~17% of us car sales, crossovers account for 46%. Once you add in small and mid size cars, you hit an even higher number. Luxury cars are a small 6% of the market. (data from here: https://www.statista.com/statistics/276506/change-in-us-car-demand-by-vehicle-type/). Focusing incentives where it is most likely to change the decision of the buyer the most just makes sense to me.

As a personal example, if Rivian loses its tax incentive I likely won't cancel my preorder. I am in a solid place financially, but by no means rich. What might make me cancel my rivian order is a legit alternative off road capable SUV coming out. The market for SUV/crossovers right now in the US is the Mach E, the Model Y and the ID.4. None of them will handle even a rough forest service road for long. We will see what Subaru brings to the market next year.
 

Ssaygmo

Well-Known Member
First Name
Sage
Joined
Sep 11, 2020
Threads
3
Messages
123
Reaction score
171
Location
Ca
Vehicles
Volt
If it stays as written, the off-road package would end up potentially adding a total of $9,500 to the price of the R1T LE.

I like the tow-hooks and extra protection, but that makes it a really easy choice.
This is what I’m worried about. Currently the LE plus off-road package is $1,000 over the tax limit, I really want that package but if a $2,000 package costs me $9,500 it’s not worth it. But at least we can get floor mats and a spare tire ?, who needs skid plates and tow hooks anyways.
 

flabyboy

Well-Known Member
Joined
Jul 3, 2021
Threads
3
Messages
341
Reaction score
500
Location
Minnesota
Vehicles
Mazda 6
Occupation
Health Care
Considering what is going on in the used and new vehicle market right now, I think we are lucky Rivian hasn’t increased the prices. I would love the tax credit. I kind of doubt any changes will be made because I have little faith in government getting ANYTHING done. That being said, I highly doubt Rivian drops prices. They are a bargain right now
 

Sponsored

Rivians

Banned
Member
First Name
Michael
Joined
Sep 6, 2021
Threads
5
Messages
19
Reaction score
26
Location
Minnesota
Vehicles
Tesla Model S, Ford Raptor, Subaru Ascent
Occupation
Commercial Lender
My unpopular take. Get rid of the credits altogether or keep the existing 200k vehicle cap with no msrp limit. The rich guy getting a Rivian vs. a Ram TRX does more good for the environment than someone trading their CRV for a VW ID4.
Also, EVs are mainstream now. The lack of credit hasn’t stopped people from buying Tesla’s and Tesla lowered the prices of their cars over time to cover the lost credit. Only new companies may need any help covering costs (the tax credit cost is absolutely passed on to the customer by raising msrp, which gets more money in the company’s pocket) and even that is questionable with these wild values for Rivian and Lucid. Everyone wants in on the next Tesla…

Legacy auto also doesn’t need their R&D to be supported by taxpayers. They need to go all in on EV regardless due to consumer demand and expectation. Tesla has so much demand it doesn’t matter. They are capacity constrained, they can’t make any more cars.

Spend the money on charging infrastructure instead.
So much wrong with this post.. not sure where to start. Perhaps with the EVs being mainstream.. they account for less than 2% of the vehicles on the road. This is not mainstream.

Tesla reduced its cost over time due to the tax credit? Wrong. I own a Model S. Cost had come down due to efficiencies and removed features. Cost has increased due to supply issues. Also the cost of FSD has completely negated any perceived savings.. its a great swindle by Tesla to be honest. I got lucky with the rare EAP2 and I'll never need to upgrade to FSD even though my cost will be significantly less than others.

It's also not about the rich replacing their exotic gas guzzlers with EVs either, but the rich are the ones adopting the EVs so it makes little sense to take away incentive of the upper middle class to the top 5% and give the credit to the middle class when the middle class doesn't understand the difference between a tax credit and a rebate since they are in debt up up their eyeballs excited about their $5000 "refund".
 

flabyboy

Well-Known Member
Joined
Jul 3, 2021
Threads
3
Messages
341
Reaction score
500
Location
Minnesota
Vehicles
Mazda 6
Occupation
Health Care
This is a little off topic, but has anybody looked closely at the mileage tax they are considering in the 1 trillion infrastructure bill. It’s a pilot program at the moment, but damn will it make adopting EVs less appealing. We put something like 40-45 k miles on our vehicles every year.
 

Blur1t

Well-Known Member
First Name
Andy
Joined
Nov 25, 2020
Threads
4
Messages
259
Reaction score
252
Location
Mason
Vehicles
R1T Launch, Subaru Cross trek
Occupation
Enrolled Agent
EV Credits language in Reconciliation Bill
Rivian Newest language on the EV incentive {filename}

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.
As a tax professional, I feel like it’s really all a shell game anyway. Rich is a relative term, what is deemed wealthy on the west coast varies greatly with what is deemed wealthy in the Midwest and east coast. Playing with the MSRP, making it available at purchase will only make it harder to to see the value. MSRP is a phatom number anyway, it in no way reflects actual costs, kind of like the housing market right now, it only reflects what one is willing to pay, which can change rapidly. So tax credits mess with the bottom line but a vehicle is only worth what someone is willing to pay for it. Well I can hope and in my opinion it will , depreciate at a lower rate than a bolt or a leaf but there are no guarantees. One can easily possibly recoup the tax incentive loss on the sale of the vehicle down the line, in theory anyway. So it also depends on how long one plans on keeping it. I’m a new EV adopter but long time enrolled agent. I would like to get that tax break, but it will not let it stop me from owning a piece of history…
 

Sgt Beavis

Well-Known Member
First Name
Rick
Joined
Sep 28, 2021
Threads
65
Messages
1,680
Reaction score
3,548
Location
Colorado
Vehicles
2022 Rivian R1T, 2021 Jeep Wrangler Rubicon
Occupation
Overpaid Computer Nerd
Clubs
 
It appears that setting up a seperate building (or tent) and employing union workers to bolt on the wheels (or steering wheel, or brake pedal, etc.) would qualify a vehicle for the $4,500.

Rivian Newest language on the EV incentive {filename}


Rivian Newest language on the EV incentive {filename}
I'm not sure you'd have much luck in getting UAW workers to do that.

However, I think the solution for non union OEMs is to simply get their employees to organize without using the UAW.
Sponsored

 
 




Top