Tax Credit - Senate Parliamentarian Reportedly Ruled

Jac

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According to Politico this morning:

“Senate Finance Committee Chair Ron Wyden (D-Ore.) announced that his panel’s energy provisions, which include the electric vehicle tax credits and a bonus tax credit to encourage clean energy developers to pay the prevailing wage, cleared Senate budget rules.
Some budget experts had surmised that certain conditions placed on the electric vehicle tax credits, including restrictions on where car battery materials must be sourced, ran afoul of the budget rules guiding the process that Democrats are using to pass their bill with a simple majority and evade a filibuster.
Under the current proposal, a car is only eligible for full credit if the batteries were made with materials from the U.S. or countries that have trade agreements with the U.S. — a requirement that some experts argue will make it very difficult to obtain the tax credit.
But those provisions can apparently remain in the package — a decision likely to please Sen. Joe Manchin (D-W.Va.), who wanted the restrictions in order to curb the electric vehicle industry’s reliance on China.”

 

COdogman

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So even when (if) the bill passes we still will have no idea whether we get a credit or not, aside from the pricing limits. America:facepalm:
 

astonius

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So even when (if) the bill passes we still will have no idea whether we get a credit or not, aside from the pricing limits. America:facepalm:
And people had the audacity to say this bill is a step in the right direction, without even knowing what it does. Reminds me of Pelosi's "we have to pass the bill so you can find out what's in it" line on ACA.
 


Ralph

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The 40% sourcing rule doesn't go into effect till 2024. So there will be one year with the no regulations.
I was encouraged to read that from the Politico article as well:

In order to receive a tax credit for buying an electric vehicle, the budget deal Democrats are working to enact requires battery minerals to be at least 40 percent sourced from North America or a U.S. trading partner starting in 2024 and rising from there. And by 2029, battery components would have to be 100 percent made in North America.
 

SASSquatch

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I think for most of us who are reservation holders the sourcing requirements won't impact our ability to get the EV credit.

The income and price caps though will come for us. I am eliminated by income caps, but not on price caps. How does that make sense?

With the exception of the 22" wheels, which I think are now going to have to come off, I am basically at the base level and would be priced out if the EV credit comes off the table. Especially this year with all of the extra costs with inflation.

I think price caps and income caps make sense because you don't want to have the EV incentive be a subsidy for wealthy americans to buy fancy toys, but the 150/300 income and 80K price cap just does NOT make sense in our current environment. It knocks out too many folks who otherwise would be motivated to buy an EV over an ICE or even a hybrid.

The easiest solution would be to add a waiver to any new manufacturers who are in play as of the enactment of the legislation who have not yet exhausted their 200K of original credits. That way you aren't playing favorites by disadvantaging them vs the legacy auto manufacturers who already benefited from the 200K credits, got to scale on the EV side, and are now in a better position to be competitive on cost.
 

lostpacket

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How much do you think it would cost to hire an in-home parliamentarian? Duties would include telling me what dishes go in the dishwasher and how to sort laundry and the like.
 

SASSquatch

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How much do you think it would cost to hire an in-home parliamentarian? Duties would include telling me what dishes go in the dishwasher and how to sort laundry and the like.
Great minds think alike. Think of all the disputes that can be resolved. I am already thinking up schemes for tele-parlimntarian services!
 

electruck

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How much do you think it would cost to hire an in-home parliamentarian? Duties would include telling me what dishes go in the dishwasher and how to sort laundry and the like.
I take it you're not married? 🤣
 


electruck

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The 40% sourcing rule doesn't go into effect till 2024. So there will be one year with the no regulations.
Is the Politico article based on a revised draft of the bill? The text I had previously read stated 40% up until Jan 1, 2024 (if I read that correctly), not starting in 2024 as indicated in the article. Would be nice if the text has changed, wouldn't have to worry so much about what "workarounds" they might have to come up with.

from the proposed bill:
ira_ev_min.png


from Politico:
politico.png
 

ORFynder

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From CNN

"Still, there's a significant caveat: Automakers and consumers likely won't be able to take advantage of this tax credit over the next few years. At the insistence of Democratic Sen. Joe Manchin, the tax credit was written in a way so that automakers are forced to move their EV supply chains away from China and to the US and countries where the US has free trade agreements. Vehicles must be built in North America, and EV batteries must also not come from countries like China.
As a result, US automakers likely won't be able to offer the credit in the next few years as they try to build up their domestic supply chains, Democratic Sen. Debbie Stabenow of Michigan said."
 

mabowden

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Is the Politico article based on a revised draft of the bill? The text I had previously read stated 40% up until Jan 1, 2024 (if I read that correctly), not starting in 2024 as indicated in the article. Would be nice if the text has changed, wouldn't have to worry so much about what "workarounds" they might have to come up with.

from the proposed bill:
ira_ev_min.png


from Politico:
politico.png
I hope you're right! If so, I can change my config back to RB/OC and not worry about OC costing me $3750!
 

electruck

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I hope you're right! If so, I can change my config back to RB/OC and not worry about OC costing me $3750!
I'd like to hope but I don't have anything at this point suggesting this was anything other than bad journalism.
 

TXR1S

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Yep, all bill text that has been seen has the 40% requirement taking effect immediately upon guidance being issued by secretary of transportation.

Unless Rivian lets us sign PBAs, which they need to do. Period.
 

 
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