7500 EV tax credit update with new bill

[DJL]

More text

New Vehicle Credit

1. Manufacturer caps eliminated. (Page 370, line 15)
2. Credit applies for vehicles purchased beginning January 1, 2023. (Page 386, line 1).
3. Transition provision for EVs with written sales orders dated in 2022 prior to the date of President signing the bill but delivered in 2023 allows purchaser to claim the “old” credit in 2023. (Page 386, line 20).
4. Vehicle must be assembled in North America to qualify for new credit. (Page 366, line 15).
5. North American assembly requirement applies to vehicles sold after the date of adoption of the bill. (Page 386, line 3)
6. $7,500 credit is broke into two binary pieces meaning the vehicle either qualifies for each piece of the credit or it doesn’t. No longer based on size of battery. (Page 366, line 6)
7. $3,750 of the new credit is based upon the vehicle having at least 40% of its battery critical minerals from the United States or countries with a free trade agreement with the United States. This is a list of countries with free trade agreements with the US.(Page 371)
8. The other $3,750 of the new credit is based on at least 50% of the battery components of the vehicle coming from the United States or countries with a free trade agreement with the US. (Page 372, line 13)
9. The 40% minerals requirement increases to 50% in 2024, 60% in 2025, 70% in 2026 and 80% in 2027. (page 371 line 23)
10. The 50% battery components requirement increases to 60% in 2024, 70% in 2026, 80% in 2027, 90% in 2028 and 100% in 2029. (Page line 373)
11. The government has until the end of the year to develop guidance on the battery requirements. (Page 374)
12. Beginning in 2025, any vehicle with battery minerals or components from a foreign entity of concern are excluded from the tax credit. (Page 374, line 20).
13. One credit per vehicle. (Page 375, line 12)
14. Modified gross income limit of $150k for individuals, $225k for head of household, and $300k for joint returns. Definition of MAGI (page 375, line 22)
15. MSRP of vehicle must be $80k or less for SUVs, Vans and Trucks. $55k for all other vehicles. (Page 377, line 4)
16. Dealer can apply credit at time of sale. Dealer must disclose to buyer the MSRP of the vehicle, the applicable tax credit amount and the amount of any other available incentive applicable to the purchase. (Page 378, line 6)
17. Credit terminates December 31, 2032.

Thank you for offering these highlights. I have just reviewed many of them and I am impressed with your accuracy. Now, with that said. the current $7,500 tax credit only applies to those of us who are officially confirmed and have received the Lucid Order Agreement. Thus, I hope Lucid shortly begins a program that reaches out to those who have reserved but have not received a confirmation from Lucid. They should offer those people the choice to confirm their order and lock in the $7,500 tax credit before the end of this year.

 

[DJL]

if you placed an order doesn't this count as a 2022 order? My deposit is no longer refundable. And yes, the $7500 matters to me. Could I afford it without it? Yes, but increasing the price by 7500 makes a difference and this will kill Lucid, assuming Lucid also meets the other requirements.
How many Tesla sedans are under 55K? Even the model 3 long range is over this.
These types of bills make me mad, because Chevy is all constructed in Mexico. Does the Bolt still qualify and the Tesla and Lucid don't??

Your Lucid Order Confirmation agreement is written as a contract to purchase. Thus, I believe you will qualify for the $7,500 tax credit under the currrent law, irregardless when you actually pay for your car or receive it.

 

[Shuasha]

Thank you for offering these highlights. I have just reviewed many of them and I am impressed with your accuracy. Now, with that said. the current $7,500 tax credit only applies to those of us who are officially confirmed and have received the Lucid Order Agreement. Thus, I hope Lucid shortly begins a program that reaches out to those who have reserved but have not received a confirmation from Lucid. They should offer those people the choice to confirm their order and lock in the $7,500 tax credit before the end of this year.

It has to be confirmed before the President signs the bill, not end of year.

 

[DJL]

It has to be confirmed before the President signs the bill, not end of year.

I stand corrected! Thanks.

 

[njg-agt]

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….

Don't confuse taxable income with wealth... they are not the same thing. As one of many examples, imagine a person living off a Roth IRA, $0 taxable income, yet potentially a very large disposable income.

 

[HC_79]

SUV limit is $80k but I can’t see them bringing the Gravity below that.

If the Air Pure isn't coming in under $80K then the Gravity certainly isn't.

 

[noobzilla]

I messaged my Lucid rep about this bill and updates to the EV credit if passed. I asked if there's any way to order the car and have it locked in. Not just the usual price lock but an actual nonrefundable order so we can get it in the books before the President signs the bill. He sent an update that he is still waiting from the higher ups. I'm hoping to find out next week but if others can also ask their reps and post the answers here that would be helpful.

"I’m still waiting for info on the tax credit. I don’t believe it would be possible to submit a partial payment in order to take advantage of the tax credit. We don’t collect financing information until the customer’s car is received from the factory. I’ll keep you posted." -Lucid Rep

 

[Tesla2.0]

I messaged my Lucid rep about this bill and updates to the EV credit if passed. I asked if there's any way to order the car and have it locked in. Not just the usual price lock but an actual nonrefundable order so we can get it in the books before the President signs the bill. He sent an update that he is still waiting from the higher ups. I'm hoping to find out next week but if others can also ask their reps and post the answers here that would be helpful.

"I’m still waiting for info on the tax credit. I don’t believe it would be possible to submit a partial payment in order to take advantage of the tax credit. We don’t collect financing information until the customer’s car is received from the factory. I’ll keep you posted." -Lucid Rep

To be frank with you, I don’t think it’s possible for them, they have corporate accounting obligation that will be audited and structured protocols in the corporate world.

 

[noobzilla]

To be frank with you, I don’t think it’s possible for them, they have corporate accounting obligation that will be audited and structured protocols in the corporate world.

Agree and I'd say 95% not possible but never hurts to ask and try. Hey, corporates finds all sorts of loopholes in our system and even avoid taxes.

 

[changinator]

The only cars that would qualify for the new tax bill would be:

1. Chevrolet Bolt
2. Chevrolet Bolt EUV
3. Chevrolet Equinox EV
4. Chevrolet Blazer EV
5. Ford F-150 Lightning
6. Ford e-Transit van
7. Ford Mustang Mach-E
8. Volkswagen ID.4
9. Tesla Model 3
10. Tesla Model Y
11. Tesla Cybertruck

Possibly Aptera? although all verbage regarding 3-wheeled and 2-wheeled EVs have been removed from current version

 

[DBV]

The only cars that would qualify for the new tax bill would be:

1. Chevrolet Bolt
2. Chevrolet Bolt EUV
3. Chevrolet Equinox EV
4. Chevrolet Blazer EV
5. Ford F-150 Lightning
6. Ford e-Transit van
7. Ford Mustang Mach-E
8. Volkswagen ID.4
9. Tesla Model 3
10. Tesla Model Y
11. Tesla Cybertruck

Possibly Aptera? although all verbage regarding 3-wheeled and 2-wheeled EVs have been removed from current version

Maybe it will force manufacutures that don’t qualify to lower prices to make sure they do qualify. EV prices have to come down to get mass acceptance. And if they can’t then technology must change to something that is as good or better and more cost effective.

 

[Bunnylebowski]

It has to stop. People need to put their foot down and let the competition dictate the market. People with the above type of attitude is what keeps it going and going.

Not only that we are in the highest inflation era since late 70’s and early 80’s and can not afford to be doing these types of Climate/Chip bills. All this will make inflation worse.

If something you need is made by very few manufacturers in one location and then supply becomes limited, prices go up (inflation). Supply scarcity is what drives inflation, not subsidy. Other countries have subsidized zillions of industries to compete, and it’s why we now don’t have enough supply because those industries ran to the lowest bidder. This is economics, not politics. If you want something to become more popular, making it cheaper can help, so subsidizing it encourages adoption. Everyone is scrambling to get that 26% solar tax credit, is that driving inflation? The $7,500 EV tax credit has been around for years, has that made EVs more expensive?

 

[whywar]

Auto makers will adapt by making some software optional. Buy the car without some software eg lane assist, auto cruise control, park assist etc. Get the rebate. Buy the software as an OTA update.

 

[noobzilla]

Auto makers will adapt by making some software optional. Buy the car without some software eg lane assist, auto cruise control, park assist etc. Get the rebate. Buy the software as an OTA update.

Oh god imagine monthly subscription like most software now and end up paying substantially more over time. Then they would brick your car unless you pay

 

[Maverick]

Auto makers will adapt by making some software optional. Buy the car without some software eg lane assist, auto cruise control, park assist etc. Get the rebate. Buy the software as an OTA update.

Was going to ask the question as to how many of those would qualify after options that everyone wants are added, so you bring up great point about software add-ons after the fact. I wonder whether you'd have to wait until after getting the rebate. I'd think as long as they were under a separate bill of sale it wouldn't count. Hell, I'd guess Lucid could probably figure something out there too. It would be a large separate sale. Maybe the ability to buy the Pure for $50k. It will drive and have a 200 mile range, but no infotainment, DD, climate control, etc turned on. For that you can purchase the standard bundle after the sale.

 

[Shuasha]

The only cars that would qualify for the new tax bill would be:

1. Chevrolet Bolt
2. Chevrolet Bolt EUV
3. Chevrolet Equinox EV
4. Chevrolet Blazer EV
5. Ford F-150 Lightning
6. Ford e-Transit van
7. Ford Mustang Mach-E
8. Volkswagen ID.4
9. Tesla Model 3
10. Tesla Model Y
11. Tesla Cybertruck

Possibly Aptera? although all verbage regarding 3-wheeled and 2-wheeled EVs have been removed from current version

Rivian R1T, R1S
Chevy Silverado EV
Probably the Cadillac Lyric

 

[LCIDdreams]

Rivian R1T, R1S
Chevy Silverado EV
Probably the Cadillac Lyric

The Equinox, Blazer, Cybertruck and Silverado are not being sold yet though. Also I’m not sure if anyone knows for sure yet which current models meet the % requirements for battery raw materials sourcing, and battery assemble.

The bigger thing that few people are talking about is the fact that plug in hybrids with batteries as small as 7kwh could qualify for the $7500 credit. There is maybe $1.5k-$2k in costs for an mfr to add a 7 kWh battery and other hardware to make an ICE car into a plug in hybrid. Considering that, I actually think this bill would slow down legacy autos’ transition to electric- why spend all this time and money on the really difficult transition to EVs (which are money losing until they are really ramped up) when they can just make modifications to their ICE models to add a 7kw battery to every configuration, bump up price $5k and nicely increase gross profits? Consumers would still feel good because they save $2.5k over the previous ICE version and there is no need for them to ever plug in if they don’t feel like it (meaning although the may feel good about being green, actual emissions savings would be much less than EPA testing).

Although I’m not specifically against some incentives to encourage those who are not ready for full EV to buy a plug-in hybrid, I think the incentive needs to be commensurate. Throwing $7500 to every small batteried plug-in hybrid seems like it would just a be huge waste of taxpayer money and possibly act against the transition to zero emissions vehicles.

 

[joec]

The Equinox, Blazer, Cybertruck and Silverado are not being sold yet though. Also I’m not sure if anyone knows for sure yet which current models meet the % requirements for battery raw materials sourcing, and battery assemble.

The bigger thing that few people are talking about is the fact that plug in hybrids with batteries as small as 7kwh could qualify for the $7500 credit. There is maybe $1.5k-$2k in costs for an mfr to add a 7 kWh battery and other hardware to make an ICE car into a plug in hybrid. Considering that, I actually think this bill would slow down legacy autos’ transition to electric- why spend all this time and money on the really difficult transition to EVs (which are money losing until they are really ramped up) when they can just make modifications to their ICE models to add a 7kw battery to every configuration, bump up price $5k and nicely increase gross profits? Consumers would still feel good because they save $2.5k over the previous ICE version and there is no need for them to ever plug in if they don’t feel like it (meaning although the may feel good about being green, actual emissions savings would be much less than EPA testing).

Although I’m not specifically against some incentives to encourage those who are not ready for full EV to buy a plug-in hybrid, I think the incentive needs to be commensurate. Throwing $7500 to every small batteried plug-in hybrid seems like it would just a be huge waste of taxpayer money and possibly act against the transition to zero emissions vehicles.

Agreed. The time for hybrids was 20 years ago. There's zero reason to incentivize them now, though I could take a few guesses as to who "suggested" including them into this bill.

The notion of incentivizing an ICE car with a 7 kWh battery over a Lucid Air Pure is stupefying.

 

[LCIDdreams]

Agreed. The time for hybrids was 20 years ago. There's zero reason to incentivize them now, though I could take a few guesses as to who "suggested" including them into this bill.

The notion of incentivizing an ICE car with a 7 kWh battery over a Lucid Air Pure is stupefying.

Bill writers are likely organizations that are anagrams of MG, DORF, and EUA

 

[misanoblue]

Fisker is hinting at being able to offer reservation holders the ability to "order" the car this year, which would allow all current reservation holders of the Fisker Ocean the ability to be grandfathered in under the old tax credit. Hopefully, Lucid will do the same thing.