Potential Change to $7,500 EV Tax Credit

ajdelange

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In fact the original $7,500 incentive was offered so that OEMs could make $7,500 more profit on their first 200,000 cars thus granting them $1,5Bn they could use for R&D, building up their production lines etc.





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thrill

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In this thread: People try to formulate a public policy defense for discounting the price of their luxury baubles.
One way to end a discussion about those trying to think of system wide improvement instead of some "feel good"" subfacet optimization is to start insulting those holding opposing views. Bonus points if it can be made indirect with the use of "people". Cement the new tone of discourse with at least a mental "not me!". A shiny participation trophy for the collection if the self delusion extends to an "I won!"
 

kylealden

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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.
I'm all for the government helping EV adoption. But folks who are contributing pushing the price of an already-premium vehicle into the stratosphere with options and upgrade trim are not the right focus for helping EV adoption - most people who can afford an 85k Rivian with a 10k rebate could afford an 85k Rivian without the rebate if they made different choices elsewhere. Meanwhile entry-level EVs are mostly still out of the reach of the average new car buyer.

You'll note that my previous reply wasn't even saying rebates are bad or must be capped at a specific level, just trying to point out that everyone on this forum with a serious intent to buy a Rivian is in a position of financial privilege and we should probably take it a little easy with our sense of entitlement to rebates.

Look, I get it - this will also be by far the most expensive vehicle I've ever owned and I'd absolutely love ten grand back in my pocket. And I'll certainly cash out if it's an option! But at the end of the day, that ten grand is flowing from taxpayers and will do more good encouraging folks to buy Bolts and Niros and even F-150s than Rivians and Taycans. Capping it at a lower price rewards the companies that are bringing the price of EVs down and making them mainstream, which is essential to electrifying transportation at scale.

The market has already demonstrated that premium, luxury EVs can succeed without government assistance - it's at least reasonable to consider withdrawing subsidies for those vehicles in favor of lower priced options for less well-off buyers.

I'm not going to pretend that the current incentive structure is perfect (it certainly isn't! among other things I think an income-capped rebate would be a much better approach than a deduction based on vehicle price, since the latter rewards folks with high tax liability aka the wealthy). I'm just a little exhausted of the poorly disguised self interest in this thread. I want $10k back because I want $10k, but not because it's the most efficient way to electrify transportation or stimulate modern US auto manufacturing.

At the end of the day this is all something about which reasonable people can and clearly do disagree. It's the sense of entitlement and lack of awareness of privilege that I'm reacting to. But I've said my piece and I'm sure more won't help. Cheers.

One way to end a discussion about those trying to think of system wide improvement instead of some "feel good"" subfacet optimization is to start insulting those holding opposing views. Bonus points if it can be made indirect with the use of "people". Cement the new tone of discourse with at least a mental "not me!". A shiny participation trophy for the collection if the self delusion extends to an "I won!"
Mea culpa on my last reply being a little snarky and dismissive. The attitudes of entitlement in this place are getting exhausting and I just need to spend less time here.

Congrats on out-smugging me, though. Nothing like a fussilade of direct insults to counter a perceived insult. Enjoy the internet points. ✌
 
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ATL_Canes

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In fact the original $7,500 incentive was offered so that OEMs could make $7,500 more profit on their first 200,000 cars thus granting them $1,5Bn they could use for R&D, building up their production lines etc.
Hmmm... this one confused me. The credit goes to the end purchaser, not the OEM. Unless there is some sort of matching incentive that also goes to the manufacturer? Or I suppose you could argue the manufacturers artificially inflate the price by $7.5k to increase margins, but I'm not sure it works that way either (i.e., Tesla's prices didn't drop once the credit phased out). Just trying to wrap my head around the economics of how the EV incentive increases the OEM's margins. I may be missing something fairly obvious, so that's the only reason I ask.

This thread became fairly politicized, so I hesitate to even ask a benign question.
 

ajdelange

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Hmmm... this one confused me. The credit goes to the end purchaser, not the OEM. ... Or I suppose you could argue the manufacturers artificially inflate the price by $7.5k to increase margins,
Yes, that's it at least that's how it was explained to me.

but I'm not sure it works that way either (i.e., Tesla's prices didn't drop once the credit phased out).
The credit was phased out. Tesla did drop the prices of their cars (shortly after I bought mine, of course).
 

ajdelange

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The market has already demonstrated that premium, luxury EVs can succeed without government assistance - it's at least reasonable to consider withdrawing subsidies for those vehicles in favor of lower priced options for less well-off buyers.
The industry has demonstrated that the higher priced cars in an OEM's portfolio produce more profit than the lower priced ones. The intent of the credit, as I understand it, was to allow the OEM to manufacture and sell top of the line cars in the hope that he would strengthen his cash position to the point where he could develop and sell lower priced cars for the mainstream. This has sort of worked out for Tesla.[/QUOTE]
 

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