Potential Change to $7,500 EV Tax Credit

Don

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Yeah this is a big deal if the 10k battery upgrade ends up costing me 20k.... This is the one thing that will certainly get me to re-evaluate my position on the Max Pack
Exactly. I won’t give up
Yeah this is a big deal if the 10k battery upgrade ends up costing me 20k.... This is the one thing that will certainly get me to re-evaluate my position on the Max Pack
Exactly. I won’t give up the incentive.
In order to keep the EV under $80,000 I’ll choose the 300 mile range battery PAK and make it work. Keeping $20,000 in my pocket buys me a lot battery charging cost.
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Don

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Making it apply to the configured price would be weird, because what would stop a manufacturer from just selling upgrades as a separate charge? Like, "we only sell base R1Ts for 70k, but incidentally, if you'd like us to make some upgrades to your vehicle before it leaves the factory we can do so after order completion".
Usually adding upgrades “after” the vehicle is built can be costly depending on the upgrade. Especially upgrading a battery pak.
 

Don

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I thought of this as well, but given the cost and shortage of batteries, I don’t think it’s a viable feature to manage via software lock upgrade. It would take a big chunk of the profit margin out of the initial transaction with no guarantee people would eventually pay to unlock it. My gut says many folks who are getting the max pack don’t really need it, but are instead buying insurance against range anxiety (and that’s OK). But once they buy it and use it for 6 months and realize they don’t need it, they probably aren’t going to pay another $10k at that point to get it.
That makes a lot of sense, to me anyway. This is a big leap for me. This is my first EV purchase, sight unseen at over $86,000. I must be crazy but I am intrigued.
I’m retired and don’t go far but I still have to admit about the anxiety over not having enough range so I chose the MaxPak. I guess I have the “What if” on my mind if I decide to go on long road trips. I’m on the fence.
 

Don

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Well, a carbon tax (to consumers and/or OEMs) would be another approach, but a pretty distasteful one, at least until there are more competitive entry-level EV options.
Distasteful is an understatement. We want to incentivize not penalize. Need to work the positive side of the spectrum.
 

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good to know if push comes to shove, can configure a "base" 400-miler R1T with very few options and still come in under the (proposed) $80K max price cap. Can still enjoy the tax credits.

Cheap R1T.PNG
 

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Maybe it’s just me, but I think this has a snow ball’s chance in hell of passing as it would need Republican support in the senate.

Regardless, there is only a very small chance that someone has to make a final purchase decision without the facts. That possibility would be someone finalizing an order early December for delivery early January and then the Bill passes in December taking effect in January. In every other case you’ll know the facts when making your purchase and won’t get screwed.
 

Mjhirsch78

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The big bummer of this arbitrary “under $80k” is that the folks pushing it in Congress don’t seem to understand the real-world implications along with the reality of BEV development. I emailed my representatives and essentially they said that they didn’t want to incentivize ‘rich” folks buying EVs.

Cool.

Except for the fact that is exactly who this incentive has ALWAYS benefitted most (if you consider a family making $100k/year rich). This just changes the car they buy, not who gets the benefit, as well as actually INCREASING the amount those folks get.

Math time:
Median household income in 2019: $69k
-25k standard deduction
$44k taxable = total federal tax due $5470

So that is the most the average household can see from this credit and doesn’t factor in other deductions tax-filers would normally get that no longer will apply since many of those credits are also non-refundable.

To get to 7500 base credit, household must make $78k
+either union or USA made = $89.6k
To get full credit for union and American made: $100,955.55

To accomplish their supposed goal, it needs to be a carryover credit or a refundable credit.

They also don‘t account for the inherent higher cost for an EV until battery development gets down to a lower cost. We are essentially paying $20-30k ($100/kw to $150/kw) for just the 400 miles of range. That doesn’t include all the other costs of vehicle production.

Look at a typical SUV or truck. Those are the cars that use the most gas per mile, thereby creating the most exhaust per mile. They also cost the most. A typical ICE SUV or truck will cost $45-60k and often much more once fully specced. Add the battery cost to that and you are looking at EVs of similar quality being between 60-80k.

It‘s a bummer, but my wife and I have accepted we can’t get this credit that we would have prior to this change. Our income didn’t change. This arbitrary price point removed all of it. We have yet to break six figures as a household until this next year. Teachers and school librarians are not exactly highly-paid folks heh. We simply saved, paid off our mortgage after twenty years, and were excited to replace our house payment with a really large car payment, three times the car payment we would normally get before paying off the house. Will we still purchase our BEV? Yes. However, will other folks looking at ICE vs. BEV SUVs or trucks do the same when the incentive reality is explained to them?

Ugh.

/rant off
 

SANZC02

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The big bummer of this arbitrary “under $80k” is that the folks pushing it in Congress don’t seem to understand the real-world implications along with the reality of BEV development. I emailed my representatives and essentially they said that they didn’t want to incentivize ‘rich” folks buying EVs.

Cool.

Except for the fact that is exactly who this incentive has ALWAYS benefitted most (if you consider a family making $100k/year rich). This just changes the car they buy, not who gets the benefit, as well as actually INCREASING the amount those folks get.

Math time:
Median household income in 2019: $69k
-25k standard deduction
$44k taxable = total federal tax due $5470

So that is the most the average household can see from this credit and doesn’t factor in other deductions tax-filers would normally get that no longer will apply since many of those credits are also non-refundable.

To get to 7500 base credit, household must make $78k
+either union or USA made = $89.6k
To get full credit for union and American made: $100,955.55

To accomplish their supposed goal, it needs to be a carryover credit or a refundable credit.

They also don‘t account for the inherent higher cost for an EV until battery development gets down to a lower cost. We are essentially paying $20-30k ($100/kw to $150/kw) for just the 400 miles of range. That doesn’t include all the other costs of vehicle production.

Look at a typical SUV or truck. Those are the cars that use the most gas per mile, thereby creating the most exhaust per mile. They also cost the most. A typical ICE SUV or truck will cost $45-60k and often much more once fully specced. Add the battery cost to that and you are looking at EVs of similar quality being between 60-80k.

It‘s a bummer, but my wife and I have accepted we can’t get this credit that we would have prior to this change. Our income didn’t change. This arbitrary price point removed all of it. We have yet to break six figures as a household until this next year. Teachers and school librarians are not exactly highly-paid folks heh. We simply saved, paid off our mortgage after twenty years, and were excited to replace our house payment with a really large car payment, three times the car payment we would normally get before paying off the house. Will we still purchase our BEV? Yes. However, will other folks looking at ICE vs. BEV SUVs or trucks do the same when the incentive reality is explained to them?

Ugh.

/rant off
There is one bill floating around as well that would make this like the home solar credit and allow it to carry over at least 1 year.

Who knows what might remain in the bill when/if it is ever signed.

I would not worry about it until it becomes real at this point.
 

Grabs10

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Leave tax credit as is currently with threshold for phase out limits in place. Tesla seems pretty successful and doesn’t need help to prosper…. Gm is successful. After hitting the threshold the next EV they released is the hummer launch edition.

doesnt seem BEV’s have gotten any cheaper from the manufactures that are high or have exceeded the threshold. Giving them basically an unlimited tax credit is a transfer of money from those that have income tax obligation to corporate America.
 

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Any EV "incentive" that has a cap simply removes the interest of the "rich" from not getting yet another polluting ICE vehicle.
If you're shopping for a >$80k adventure truck you don't get to put scare quotes around "rich."
 

thrill

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If you're shopping for a >$80k adventure truck you don't get to put scare quotes around "rich."
The supposed purpose of the incentives is to get people to buy an EV *instead* of an ICE. Take away that incentive and the price difference gets noticed by anyone who doesn't look at $80K as pocket change.
 

kylealden

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The supposed purpose of the incentives is to get people to buy an EV *instead* of an ICE. Take away that incentive and the price difference gets noticed by anyone who doesn't look at $80K as pocket change.
In this thread: People try to formulate a public policy defense for discounting the price of their luxury baubles.
 

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In this thread: People try to formulate a public policy defense for discounting the price of their luxury baubles.
Or you might consider that he makes a valid point. The incentive is to encourage EV adoption.
 

CommodoreAmiga

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In this thread: People try to formulate a public policy defense for discounting the price of their luxury baubles.
Damn straight! This will be the most expensive vehicle purchase I've ever made -- by far. The ONLY reason I'm considering it is because it's an EV. This is an aspirational purchase, for me.

If $80k is couch change for you, then congrats? But I'd rather the government help EV adoption.
 
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