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7500 EV tax credit update with new bill

noobzilla

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TLDR. 200,000 limit removed. For EV's up to $55k only. We don't know when this will pass and when it will apply.

"We pulled the information from the bill and confirmed all the changes to the EV federal tax credit in the new version:

  • Federal tax credit for EVs maintained at $7,500
    • Eliminates tax credit cap after automakers hit 200,000 EVs sold, making GM and Tesla once again eligible
    • The language in the bill indicates that the tax credit would be implemented at the point of sale instead of on taxes.
    • In order to get the full credit, the electric vehicle needs to be assembled in North America, the majority of battery components need to come from North America, and contain a certain percentage of minerals from countries with free trade agreements with the US.
  • A new federal tax credit of $4,000 for used EVs
  • Zero-emission vans, SUVs, and trucks with MSRPs up to $80,000 qualify.
  • Electric sedans priced up to $55,000 MSRP qualify.
  • The full EV tax credit will be available to individuals reporting adjusted gross incomes of $150,000 or less, $300,000 for joint filers.
This would enable Tesla and GM to get access back to the credit – though in Tesla’s case, it would only apply to some versions of the Model 3 due to the new $55,000 price limit."

source here 7/27 article


That's a bummer.. I mean that makes sense really. I was thinking of downgrading to Model 3 and keep 2 cars instead but Model 3 long range is over $55k and won't qualify.
 

Shuasha

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There's already a thread on this (the later part of the thread)
 

RichMalden

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The language in the bill indicates that the tax credit would be implemented at the point of sale instead of on taxes
This will be tough unless at the point of sale it is essentially an "advance" of the potential credit based on the buyer's representation of their income which is then reconciled at tax time when they actually file their tax returns and their income can be calculated, verified, whatever.
 

noobzilla

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This will be tough unless at the point of sale it is essentially an "advance" of the potential credit based on the buyer's representation of their income which is then reconciled at tax time when they actually file their tax returns and their income can be calculated, verified, whatever.
I prefer point of sale than tax credit. $7500 now than waiting for tax filing season.
I would think that anyone who could afford a Air would have a income limit above any tax credit program. This isn’t a poor persons car….
And this
 

noobzilla

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There's already a thread on this (the later part of the thread)
I saw that thread yesterday but just saw the first parts.
 

joec

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I would think that anyone who could afford a Air would have a income limit above any tax credit program. This isn’t a poor persons car….
Depends. A lot of wealthy people have almost no income, from a tax perspective. And believe me, they take every tax credit they can get away with.
 

noobzilla

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Can't imagine it will happen for the 2022 year...
Highly doubt it will happen this year. That will be a mess to implement mid year. Which year do you think it will likely happen? 2023 or 2024?
 

RichMalden

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I prefer point of sale than tax credit. $7500 now than waiting for tax filing season.
Obviously preferable. I was just noting that this part of the bill could change because of the tough logistics of executing it. None of this matters regarding the Lucid as the price of the vehicle is too high anyway. It was more a comment on the bill in general and the implementation of it.
 

noobzilla

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Depends. A lot of wealthy people have almost no income, from a tax perspective. And believe me, they take every tax credit they can get away with.
Ohhh you're right. Forgot about those cases like people whose wealth are mostly in investments and not necessarily earning high wages.
 

Tesla2.0

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Federal tax credit for EVs maintained at $7,500
    • Eliminates tax credit cap after automakers hit 200,000 EVs sold, making GM and Tesla once again eligible
    • The language in the bill indicates that the tax credit would be implemented at the point of sale instead of on taxes.
    • In order to get the full credit, the electric vehicle needs to be assembled in North America, the majority of battery components need to come from North America, and contain a certain percentage of minerals from countries with free trade agreements with the US.
  • A new federal tax credit of $4,000 for used EVs
  • Zero-emission vans, SUVs, and trucks with MSRPs up to $80,000 qualify.
  • Electric sedans priced up to $55,000 MSRP qualify.
  • The full EV tax credit will be available to individuals reporting adjusted gross incomes of $150,000 or less, $300,000 for joint filers.
This will blow new starters Lucid and Rivian, but favor all legacy automakers bringing on more entry EVs to masses. Tesla will also have advantage bc they have huge production capacity to reduce future cost if they have enough orders. And since Model-2 is only made in China at $25k, that is not applicable for $7500. (If Tesla can deliver them)
 

Shuasha

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This will blow new starters Lucid and Rivian, but favor all legacy automakers bringing on more entry EVs to masses. Tesla will also have advantage bc they have huge production capacity to reduce future cost if they have enough orders. And since Model-2 is only made in China at $25k, that is not applicable for $7500. (If Tesla can deliver them)
Rivians start below the $80k price cap, so it's more of an income cap thing for them.
 

EricM

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This is the right approach. It’s about making EVs accessible to those who might not be able to afford one and would have bought a gas powered vehicle instead. I doubt many Lucid customers would have said “oh, without the $7500 tax credit, I’ll buy a gas powered S-class instead”.
 

Shuasha

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Also keep in mind that potentially this can all change until it's actually passed. There have been versions in the past where the caps didn't exist or were higher.
 

joec

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Giving the credit back to established automakers does suck for new startups. But I always thought it was a bad idea to have that cap in the first place. It's not Tesla's fault they were successful. And if the goal is "sell more EVs" there should be credits for any company that can sell more EVs.

If the income and car price caps are there to push automakers to find ways to reduce the cost of EVs, I'm all for it. I'd prefer that more expensive EVs or income levels get a reduced credit, rather than no credit, but whatever. To me, any EV purchase is a win, regardless of how rich the person is buying it.

Tesla sure has lost the incentive to bring out the Model 2, or whatever they were going to call it. Average Tesla prices have been rising for years now. Maybe with this there's a good reason to bring that entry-level car back into development?
 

E LUCID 8

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I think any start up needs to come out with the "flagship" car first, try to gain acceptance, recognition, make money and then develop the more affordable options. I don't think Tesla would have survived if it came out with the 3 before the S. For that reason, I think the price and income caps could hurt the industry overall and be just another short-sighted move by our elected representatives looking to make a statement.
 
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