7500 EV tax credit update with new bill

[LCIDdreams]

At least according to the Congressional Budget Office, only 11,000 Vehicle sales are expected to qualify under the new credit terms in 2023 (assuming all get the full $7,500)

My guess is 11,000 cars will be less than 1% of total US 2023 EV sales (not including hybrids)

U.S. Congress office sees few tax breaks for EVs under Democratic plan

A proposal by U.S. Senate Democrats to put income, price and domestic content conditions on electric vehicle tax breaks could initially sharply curtail the number of EVs that qualify, the Congressional Budget Office said on Wednesday.

www.reuters.com

 

[n8236]

70% of EVs wouldn't qualify for tax credit under Senate bill, say automakers

Automakers have been expressing concern about the proposal's increasing requirements for vehicles' batteries and critical-mineral contents to be sourced from the US.

www.autoblog.com

 

[ed94582]

Confirming your order is 100% a binding agreement. Once you confirm, the deposit is lost and we are provided with an order number, and the vehicle has been earmarked for you.

The qualify for the defunct $7500 credit, we must "entered into a written binding contract to purchase"

To dispel any doubt, this is directly from our Lucid Order Confirmation:

You are agreeing to these terms and conditions of sale (“Terms”)​

to purchase a Lucid Air from Lucid Group USA, Inc. (“Lucid,”​

“we” or “us”).​

You agree to purchase your vehicle (“Vehicle”) from Lucid​

as configured and at the price set forth in your Configuration​

Summary.​

I confirmed my GT order in May but will be over the income limits in the new bill. Do you think I will still qualify for the $7500 tax credit if they deliver my GT before the end of the year? Thanks.

 

[DJL]

I confirmed my GT order in May but will be over the income limits in the new bill. Do you think I will still qualify for the $7500 tax credit if they deliver my GT before the end of the year? Thanks.

On Page 402 of the Inflation Reduction Act is the “Transition Rule”. It states:

(l) TRANSITION RULE.—Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that—
(1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and (2) placed such vehicle in service on or after the date of enactment of this Act, such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.

The confirmation order you signed is a written binding contract to purchase so you should qualify. That's my story...and I am sticking with it!

 

[Pragmatic]

Don't know if this has been discussed but does the new bill actually rescind the old tax credit (for new EV makers) or does it supplement the old bill? Unless it actually voids the old law wouldn't both incentives be in effect. $7500 for the first 200,00 vehicles sold and/or $7500 for EVs under $60K with built in North America with US sourced batteries/battery minerals. I have not read the bill or followed the discussion too closely. I reserved a Pure in January and figured why waste time reading up on the Bill I can figure it out closer to delivery time in late 23 or 24. The incentive is not likely to change my decision, though other things between now and delivery may.

 

[bhramabull]

On Page 402 of the Inflation Reduction Act is the “Transition Rule”. It states:

(l) TRANSITION RULE.—Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that—
(1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and (2) placed such vehicle in service on or after the date of enactment of this Act, such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.

The confirmation order you signed is a written binding contract to purchase so you should qualify. That's my story...and I am sticking with it!
View attachment 3934

I posted this exact thing elsewhere on another thread. I completely agree and stand by this same theory.

 

[stratus]

70% of EVs wouldn't qualify for tax credit under Senate bill, say automakers

Automakers have been expressing concern about the proposal's increasing requirements for vehicles' batteries and critical-mineral contents to be sourced from the US.

www.autoblog.com

My guess is that the bill is attempting to transform dependence away from sourcing materials from China and other unfriendly countries . Who knows if it will work. I read somewhere that it could take up to 3 years before the bill will have a positive affect on EV sales.

I love all the climate provisions though.

Don't know if this has been discussed but does the new bill actually rescind the old tax credit (for new EV makers) or does it supplement the old bill? Unless it actually voids the old law wouldn't both incentives be in effect. $7500 for the first 200,00 vehicles sold and/or $7500 for EVs under $60K with built in North America with US sourced batteries/battery minerals. I have not read the bill or followed the discussion too closely. I reserved a Pure in January and figured why waste time reading up on the Bill I can figure it out closer to delivery time in late 23 or 24. The incentive is not likely to change my decision, though other things between now and delivery may.

I am pretty certain it rescinds , and after the effective date of the bill, that whole new set of rules takes over.

 

[Drendino]

My guess is that the bill is attempting to transform dependence away from sourcing materials from China and other unfriendly countries . Who knows if it will work. I read somewhere that it could take up to 3 years before the bill will have a positive affect on EV sales.

It takes mental gymnastics to come to the conclusion that this is somehow going to put more EVs on the road in any amount of years. Like or dislike the bill, let’s be realistic about what this does to the EV movement. Every action makes somebody happy. This time it is Gm, Ford and Tesla.

 

[hitmanray]

I've been reflecting a bit now that this has passed the Senate and seems destined to become law.

As much as it pains me, I think the income tests for the EV tax credit makes sense. I took advantage of the $7,500 last year buying a Chrysler Pacifica Hybrid and it just made my car insanely cheap. The income test would put me out of the tax credit, irrespective of the rest of the bill.

I am also generally for new legislation to try and move the climate solutions forward, and agree with the overall aspiration.

But I see 2 big issues. The cap on the cost of a vehicle to qualify for the credit is totally arbitrary in my mind. I get the income test, but then why also have the price test? It is obviously there to try and force vehicle manufacturers to reduce the price of their electric vehicles to qualify, but at the same time it is asking manufacturers to make significant investments to bring manufacturing of these vehicles to the US. This absolutely favors the big guys who can afford to sell less profitable EV models supported by a full lineup of other profitable vehicles until they can get the scale to drive cost down and profit up, and will make it incredibly challenging for new comers that don't have diversity of product or scale on their side to help with price.

I'm also not a fan of the $4k for used electric vehicles. In Texas we can offset the sales tax on a new or used vehicle by the trade in value of the vehicle we are giving up. Every time I have bought a vehicle in Texas where I traded a vehicle in, the seller attempted to claim the value of the sales tax reduction as part of the deal that they were bringing to the table by offering to take my vehicle as trade. It reduced trade in valuations by exactly the tax offset from a competitive trade in value from say Carmax (i.e. Carmax offers $30k trade in value, tax savings are worth $2k, dealer I want to buy from offers $28k so net same value either way).

All this to say, I believe where possible (i.e. used vehicle not already up against price limit) the dealers will grab this $4k value by increasing the price of used electric vehicles.

I will also say, on a side note, this is going to be a nightmare to administer. The IRS will be all over the place.

Fingers crossed Lucid can get me my Touring by the end of the year, though having heard nothing other than an offer to test drive a GT in another state I am not hopeful.

 

[stratus]

It takes mental gymnastics to come to the conclusion that this is somehow going to put more EVs on the road in any amount of years. Like or dislike the bill, let’s be realistic about what this does to the EV movement. Every action makes somebody happy. This time it is Gm, Ford and Tesla.

I just read 2 more analyses and I believe you are entirely correct. I would have to use pretty creative mental gymnastics.
I am too tired to try that this morning, so I will just stick to reality.

 

[LCIDdreams]

I think this says a lot. One vehicle that definitely will not qualify, versus another “clean vehicle” that will likely be eligible for $7500 credit:

I am not entirely against the bill- encouraging long term US sourcing and manufacturing is a good thing. I think there are many flaws in how this has come together though.

 

[scubastevo80]

I think this says a lot. One vehicle that definitely will not qualify, versus another “clean vehicle” that will likely be eligible for $7500 credit:

View attachment 3941

Why won't the Ioniq qualify? This really through a wrench in my plans. I was hoping to get the Lucid (it would be my first luxury car ever), but without the tax break, the Pure's delta is too much versus a Model 3 performance (I currently have a model 3 dual motor that is almost 4 years old). I realize these cars aren't in the same class, but I compare what I like and wouldn't be cross shopping for a Model S or Mercedes or Lexus LX 500. I even though about pulling the trigger on an Ioniq SEL which would be about $45k after the current tax break.

I'm probably the outlier here, but I'd rather have a Model 3 and Integra or a Ioniq and S2000 versus an $84k Lucid. I was willing to stretch to the $75k range, but this is just out of my personal budget.

 

[LCIDdreams]

Why won't the Ioniq qualify? This really through a wrench in my plans. I was hoping to get the Lucid (it would be my first luxury car ever), but without the tax break, the Pure's delta is too much versus a Model 3 performance (I currently have a model 3 dual motor that is almost 4 years old). I realize these cars aren't in the same class, but I compare what I like and wouldn't be cross shopping for a Model S or Mercedes or Lexus LX 500. I even though about pulling the trigger on an Ioniq SEL which would be about $45k after the current tax break.

I'm probably the outlier here, but I'd rather have a Model 3 and Integra or a Ioniq and S2000 versus an $84k Lucid. I was willing to stretch to the $75k range, but this is just out of my personal budget.

Its not assembled in North America. Hyandai do have factory here but currently only for ICE vehicles. Presumably this will be an incentive for them to accelerate their EV manufacturing in US but I’m sure it will be 2-3 years before they are rolling EVs out of a US (or Canada / Mexico) factory.

 

[Drendino]

I've been reflecting a bit now that this has passed the Senate and seems destined to become law.

As much as it pains me, I think the income tests for the EV tax credit makes sense. I took advantage of the $7,500 last year buying a Chrysler Pacifica Hybrid and it just made my car insanely cheap. The income test would put me out of the tax credit, irrespective of the rest of the bill.

I am also generally for new legislation to try and move the climate solutions forward, and agree with the overall aspiration.

But I see 2 big issues. The cap on the cost of a vehicle to qualify for the credit is totally arbitrary in my mind. I get the income test, but then why also have the price test? It is obviously there to try and force vehicle manufacturers to reduce the price of their electric vehicles to qualify, but at the same time it is asking manufacturers to make significant investments to bring manufacturing of these vehicles to the US. This absolutely favors the big guys who can afford to sell less profitable EV models supported by a full lineup of other profitable vehicles until they can get the scale to drive cost down and profit up, and will make it incredibly challenging for new comers that don't have diversity of product or scale on their side to help with price.

I'm also not a fan of the $4k for used electric vehicles. In Texas we can offset the sales tax on a new or used vehicle by the trade in value of the vehicle we are giving up. Every time I have bought a vehicle in Texas where I traded a vehicle in, the seller attempted to claim the value of the sales tax reduction as part of the deal that they were bringing to the table by offering to take my vehicle as trade. It reduced trade in valuations by exactly the tax offset from a competitive trade in value from say Carmax (i.e. Carmax offers $30k trade in value, tax savings are worth $2k, dealer I want to buy from offers $28k so net same value either way).

All this to say, I believe where possible (i.e. used vehicle not already up against price limit) the dealers will grab this $4k value by increasing the price of used electric vehicles.

I will also say, on a side note, this is going to be a nightmare to administer. The IRS will be all over the place.

Fingers crossed Lucid can get me my Touring by the end of the year, though having heard nothing other than an offer to test drive a GT in another state I am not hopeful.

I think an argument can be made that tax credits are not necessary at all, given the long wait times due to high demand and continued supply chain issues. Obviously I don’t personally like that since I’m getting a Lucid and the Rivian, but I could understand it and in my case won’t change my plans.

Where I get irritated is that they are trying to tell us that this will put more EVs on the road, among other fantasies. The net effect of this bill will be less EVs on the road, which is bad for the environment. This seems like a betrayal from the people who claimed to be environmental friendly. Like it or not, Americans love SUVs and trucks and if you look at the Rivian boards, many people are cancelling orders and are keeping their ICE SUVs and trucks. Again, just be honest about what the bill does and I might be able to get on board. Please just don’t tell me that it will reduce carbon, because it won’t.

 

[stratus]

I think an argument can be made that tax credits are not necessary at all, given the long wait times due to high demand and continued supply chain issues. Obviously I don’t personally like that since I’m getting a Lucid and the Rivian, but I could understand it and in my case won’t change my plans.

Where I get irritated is that they are trying to tell us that this will put more EVs on the road, among other fantasies. The net effect of this bill will be less EVs on the road, which is bad for the environment. This seems like a betrayal from the people who claimed to be environmental friendly. Like it or not, Americans love SUVs and trucks and if you look at the Rivian boards, many people are cancelling orders and are keeping their ICE SUVs and trucks. Again, just be honest about what the bill does and I might be able to get on board. Please just don’t tell me that it will reduce carbon, because it won’t.

There are provisions in the bill ( not related to EVs specifically ) that by many
analyses will result in a significant reduction in carbon emissions.
Naturally, with a behemoth bill like this, it is so hard to really tell what effect it will have . Many climate scientists and industry analysts have praised parts of the bill and concluded that it will indeed have a significant impact.
I can surely understand the disdain for parts of this bill ( I feel that way about parts of it) .
However, there appears to be fairly broad consensus that it’s climate provision may very well be effective.

 

[MPawelek]

All well and good to strap Americans with more rules, regulations and taxes to save the planet when China and India are considered “developing” countries that do not have to adhere to the climate change accord.

To find out how this new bill affects one personally each of us needs to go to our tax accountant that will know the rules and our personal tax situation for the real answer. Discussing it over and over on the Internet makes little sense. Telling the IRS that “ I read it on the net” will not be a good excuse for breaking the rules.

 

[stratus]

All well and good to strap Americans with more rules, regulations and taxes to save the planet when China and India are considered “developing” countries that do not have to adhere to the climate change accord.

To find out how this new bill affects one personally each of us needs to go to our tax accountant that will know the rules and our personal tax situation for the real answer. Discussing it over and over on the Internet makes little sense. Telling the IRS that “ I read it on the net” will not be a good excuse for breaking the

All well and good to strap Americans with more rules, regulations and taxes to save the planet when China and India are considered “developing” countries that do not have to adhere to the climate change accord.

To find out how this new bill affects one personally each of us needs to go to our tax accountant that will know the rules and our personal tax situation for the real answer. Discussing it over and over on the Internet makes little sense. Telling the IRS that “ I read it on the net” will not be a good excuse for breaking the rules.

So we should just do nothing because other countries aren’t adhering?
We should be leaders and unfortunately that relies on governmental policies to enforce rules that many don’t like. The private sector certainly doesn’t give enough of a damn to make transformative changes.
Climate change is the one of the most pressing issues of our time ; we can see it all around us, especially in the west where we are burning up and heading to aridification. Scientists are unanimous on its cause and the warnings are getting louder.
That’s why some of us are enthusiastic about EVs.
Sorry for the ramble and I don’t mean to piss anyone off, but besides the wonderful Lucid I will be driving , it’s something I feel very passionate about.

 

[MPawelek]

So we should just do nothing because other countries aren’t adhering?
We should be leaders and unfortunately that relies on governmental policies to enforce rules that many don’t like. The private sector certainly doesn’t give enough of a damn to make transformative changes.
Climate change is the one of the most pressing issues of our time ; we can see it all around us, especially in the west where we are burning up and heading to aridification. Scientists are unanimous on its cause and the warnings are getting louder.
That’s why some of us are enthusiastic about EVs.
Sorry for the ramble and I don’t mean to piss anyone off, but besides the wonderful Lucid I will be driving , it’s something I feel very passionate about.

I am all in for reducing carbon emissions but feel the rules/laws should be applied equally across the board For all countries. Here in the U.S. posting that a tax break should be given to those that can afford a 100k+ automobile is a joke and car companies should be enticed to make EV’s for city dwellers at a 30-35k price range. There are folks here spending more money on wrapping and Expel than some small families grocery budget. It’s a free country and how people spend their own money is their business but this whole government push for wind, solar and EV projects with public tax money is a mismanaged joke.
PS- My last post on this subject as this is not a political site….

 

[noobzilla]

Why won't the Ioniq qualify? This really through a wrench in my plans. I was hoping to get the Lucid (it would be my first luxury car ever), but without the tax break, the Pure's delta is too much versus a Model 3 performance (I currently have a model 3 dual motor that is almost 4 years old). I realize these cars aren't in the same class, but I compare what I like and wouldn't be cross shopping for a Model S or Mercedes or Lexus LX 500. I even though about pulling the trigger on an Ioniq SEL which would be about $45k after the current tax break.

I'm probably the outlier here, but I'd rather have a Model 3 and Integra or a Ioniq and S2000 versus an $84k Lucid. I was willing to stretch to the $75k range, but this is just out of my personal budget.

Model Y will get the 7500 credit too. Friend's friend just canceled their 3 and waiting for the bill then getting the Y instead. I'm reconsidering the Y again because like your case the delta might just be too big now for me.

 

[noobzilla]

Did anyone here get any information about converting reservations to order confirmation so we can qualify for the tax credit? I read somewhere here that one company could be doing that but I forgot which one. Fisker?