Trump to kill EV tax credit (11/14/24 article) -- [ADMIN WARNING: INFRACTIONS ISSUED FOR VIOLATING NO POLITICS RULE]

[Administrator]

Infractions have been given to those who have violated the NO POLITICS rule.

Reminder to all: discussing policy in a respectful manner is fine and encouraged, but please avoid the politics related to policy. Thank you.

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[bdwalters]

Do you have some kind of data, a behavioral study perhaps, that backs up your assertion that most people operate under your financial principles? I don’t think most people operate that way, people operate on emotion and value means different things to different people so you can’t really say the credit will be a central factor anymore than I can say it won’t.

I will have data clearly supporting my assertion in Q2 of next year. Stay tuned.

 

[Donald Stanfield]

I will have data clearly supporting my assertion in Q2 of next year. Stay tuned.

Sorry to disappoint you, but even if sales go down, that isn't definitive proof of your assertion. You'd need to consider multiple factors and somehow isolate "tax credit removal" as the reason for the slump in sales. Things like "doom spending" or "retail therapy" prove there are many different reasons why people buy, and the consumer is complicated.

I'd say the intersection of sound financial policy and people who can afford a $100,000 car is much higher than the average consumer's, but many of those people also don't need a tax credit or have other factors at play that make it less pivotal.

Take my situation, for example; due to the higher money factor on leases and the fact that I have an R1T to trade in that I originally paid cash for, the lease is a wash with financing at a lower rate with tax savings due to my trade-in. So, the tax credit exists today, but I'm not taking advantage of it because it isn't a better deal than financing, and financing doesn't come with restrictions.

Regardless, anyone needing a tax credit can buy used with low miles for the depreciation. At 45,000, the starting price of R2, you are in territory of average new car sale price WITHOUT a tax credit. That says the pool of buyers is going to be big enough where it probably doesn't matter and an R1 is expensive enough that 7,500 isn't going to make much of a difference either way.

 

[Yossarian]

There are some ironies in Musk leading the charge to repeal the EV tax credit. One is that it was hugely helpful to Tesla in getting not merely a foothold, but in becoming the dominant EV maker in the US. The other is that since the loss of the credit will likely hobble, perhaps severely, the nascent US EV makers like Rivian, to the short term benefit of Tesla, it will likely wind up benefiting the technologically-advanced and low-cost Chinese EV makers like BYD.

Given the huge excess capacity of Chinese EV (and solar equipment) makers, and their already low production costs, and with domestic EV makers other than Tesla sidelined or silenced, companies like BYD will have a much easier time selling vehicles in the US, even with 60% tariffs applied. By enabling the Chinese in this way, Musk may be sowing the seeds for the demise of Tesla. It may well be that Musk has not merely foreseen this, but also has planned for it though. Perhaps Phase 2 of his plan for EV dominance, includes even higher tariffs on Chinese EV's but an exemption for Chinese parts used in Teslas.

All speculation of course, but Mr Musk is a pretty clever guy who has proven to be quite ruthless in pursuit of both dominance and money. Don't be surprised to see X buy Truth Social either.

 

[Jim4]

I think you overlooked the fact that legacy ICE companies are subsidizing Tesla, Rivian and Lucid by purchasing hundreds of millions of dollars worth of green credits from them. They’ll be fine

Are you sure those green credits aren’t going away too?

 

[captainjp]

Are you sure those green credits aren’t going away too?

Don’t see why they would. Comparing apples to oranges. Green energy credits are basically currency issued by power companies, having nothing to do with federal incentives.

Google it for a more-detailed explanation

 

[bdwalters]

Are you sure those green credits aren’t going away too?

I’m worried about this too. Tesla can now survive this. Rivian is gross margin negative without these.

 

[vandy1981]

It's also interesting that you choice option was an ICE vs EV. It sounds like, and my guess is that, your criteria is cost first, then size. If it happens to be an EV, good but not necessary.

We wanted something smaller than the Lightning that could tow our trailer comfortably. The tax credit made our decision to stick with an EV easier.

 

[Newtonrj]

I'm trying to be respectful of the rules. I bend some of them as it is, politics is radioactive waste and the fact that it's not allowed here is a great idea.

Don, the whole subject is radioactive click bait for political discourse, rules notwithstanding. Sometimes more voyeurism and less participation will help in understating more sides to a discussion.
Be cool, be okay with it.

 

[Donald Stanfield]

Don, the whole subject is radioactive click bait for political discourse, rules notwithstanding. Sometimes more voyeurism and less participation will help in understating more sides to a discussion.
Be cool, be okay with it.

Admin disagrees with you, as do I. If you cannot discuss something without injecting personal bias and political undertones you should not discuss it on this forum. Talking about policy and the impact of such policy is fine, but if you are incapable of doing so without political bias those comments are not welcome here.

This isn't the forum for reaching political understanding, it's a car forum.

 

[vandy1981]

the loss of the credit will likely hobble, perhaps severely, the nascent US EV makers like Rivian, to the short term benefit of Tesla,

That's exactly the plan and it's a setup for a domestic monopoly. Kneecap rival domestic EV manufacturers by limiting their ability to sell domestically (tax credits) and export (trade war). Ruin the economics of import of EVs from friendly and non-friendly countries with tariffs. Tesla will be the only manufacturer with a magnitude of scale that will survive.

This also applies to charging networks if NEVI funds are eliminated.

I also agree with your suspicion that he will eventually buy truth social, and would add that it will be at a greatly inflated price.

 

[mkg3]

...I could afford an R1S without the credit, but I just wouldn’t have been willing to spend that much on a car. The rebate was the tipping factor. Sadly for Rivian, there are far more people like me, who consider the value, than people like you, for whom cost isn’t a major factor. I just want to make it clear that you are the outlier here.

For clarification sake, what you're saying here is that R1S is not worth the price Rivian is selling it for, since you only decided to get it because the $7.5k offset.

What you say is your value proposition and decision making. I do not equate any one person's value/decision to be anything more than a particular case, when it comes to purchasing choice.

As for myself being an outlier - perhaps. Just want to make it clear that my decisions are also value based, like yours. The difference is the what priority within the value system that I hold versus yours.

The cost of an object is a factor and if it is within the affordable range, then it's no longer in consideration. There are other factors that matters in the decision making. In other words, the first filter is am I able to afford it without impacting our daily lives. If so, it no longer enters the value equation.

 

[vandy1981]

Don’t see why they would. Comparing apples to oranges. Green energy credits are basically currency issued by power companies, having nothing to do with federal incentives.

Google it for a more-detailed explanation

I don't think that's true. In the USA regulatory credits are are based on state government fuel efficiency standards. If states lose the ability to set their own standards due to the incoming administration, it would affect the regulatory credit market because more polluting automobile manufacturers would not have to purchase them. This would probably hurt Rivian more than Tesla because they are more dependent on sales of these credits.

https://www.cnbc.com/2021/05/18/tesla-electric-vehicle-regulatory-credits-explained.html

 

[Donald Stanfield]

For clarification sake, what you're saying here is that R1S is not worth the price Rivian is selling it for, since you only decided to get it because the $7.5k offset.

What you say is your value proposition and decision making. I do not equate any one person's value/decision to be anything more than a particular case, when it comes to purchasing choice.

As for myself being an outlier - perhaps. Just want to make it clear that my decisions are also value based, like yours. The difference is the what priority within the value system that I hold versus yours.

The cost of an object is a factor and if it is within the affordable range, then it's no longer in consideration. There are other factors that matters in the decision making. In other words, the first filter is am I able to afford it without impacting our daily lives. If so, it no longer enters the value equation.

This is how I approach purchases, too. Cost is pass-fail for me. If the cost passes the "does this purchase compromise my overall financial plans and goals or my family security" question, the price is irrelevant. I don't understand the penny-pincher approach, those who try to squeeze every last penny out of a purchase.

 

[Donald Stanfield]

I am one of the people who @bdwalters is describing. It doesn't matter if it's most people, killing the tax credit is going to affect a market that needs to be selling as many EVs as possible to gain the magnitude of scale to compete with Tesla.

The R1 was never the vehicle that would do that for Rivian.

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