7500 EV tax credit update with new bill

[DBV]

The bill is meant to encourage, amungst other things, the middle and lower income groups to move into the EV era and to encourage automakers to build in the US and to encourage the battery industry to build and use US and trade partern materials. It was designed to cause a major shift in these areas to expand their manufacturing of more affordabel BEVs and parts here in the US. For those of you politically into the "US FIrst" way of thinking, it is right up your alley. For those of you who wish to shrink the deficent, it is right up your alley, For those of you who wish to see lower drug prices, it is right up your alley. For those of you who wish to see corporations pay a bit more taxes, it is right up your alley. For those of you who wish to see the IRS be in a better position to catch tax cheaters, this is right up your alley. For those of you who wish to support climate change initiatives, it is right up your alley. For those of you who wish to still offer Big Oil some incentives, this is right up your alley. Lucid loses big time with this bill because they chose to target those fortunate to be able to afford $80+K BEVs as their initial market strategy. This bill, if passed, will encourage Lucid and others to move quicker toward building vehicles that middle income folks can afford. It really has something for both sides of the aisle and if we did not live in such a polarized and distructive political envirnment, it would have supportors of both major parties. It is not perfect, no major piece of legislation is, but it does have some signficant programs that benefit a broad swath of Americans and companies.

I hope the bill fails. Complete waste of money and the guidelines for qualify for the EV part are a joke. Big govt at its worst and can’t afford this type of spending when inflation is at highest since 70’s and early 80’s. Amazing how many representatives in Congress just don’t care. Will also increase taxes on middle class, even though they keep denying it.

 

[Steveinarizona]

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.

Hey...that is the PHEV that I drive (9 kWh but only 7.2 usable). But I am waiting for my Lucid Pure to replace it.

 

[borski]

I hope the bill fails. Complete waste of money and the guidelines for qualify for the EV part are a joke. Big govt at its worst and can’t afford this type of spending when inflation is at highest since 70’s and early 80’s. Amazing how many representatives in Congress just don’t care. Will also increase taxes on middle class, even though they keep denying it.

So we should do… nothing?

And it doesn’t raise taxes on the middle class.

 

[whywar]

So we should do… nothing?

And it doesn’t raise taxes on the middle class.

Yes it does. Corporations do not pay taxes, they collect them. Taxes are just an input cost. Higher taxes especially on manufacturing in the proposed bill, will cause corporations to raise prices, which is a tax on all consumers and labor, as higher prices imply lower sales and revenue, and a decline in labor headcount. See the JCT scoring of the bill. Also remember that increased IRS oversite means greater enforcement on the middle classes, because that is where the money is and the wealthy can afford to defend themselves in tax court. So doing nothing is better than increasing government involvement in the economy.

 

[Amgz]

Yes it does. Corporations do not pay taxes, they collect them. Taxes are just an input cost. Higher taxes especially on manufacturing in the proposed bill, will cause corporations to raise prices, which is a tax on all consumers and labor, as higher prices imply lower sales and revenue, and a decline in labor headcount. See the JCT scoring of the bill. Also remember that increased IRS oversite means greater enforcement on the middle classes, because that is where the money is and the wealthy can afford to defend themselves in tax court. So doing nothing is better than increasing government involvement in the economy.

So are you saying if we stop taxing corporations and defund the IRS the middle class will be better off. My understanding is that it doesn't raise corporate taxes it just sets a minimum so the larger corporations can't take advantage of creative accounting that smaller corporations don't have access to. If there are middle class people who are cheating on their takes that will now have to pay what the rest of us pay because the laws are being enforced properly by the IRS I don't see that as raising the taxes on the middle class. The wealthily might be able to go to court, but a well funded IRS will get the money they owe from them.

 

[invalidname]

As a Lucid Air Pure reservation holder and a mid-middle class in my county making borderline $150k annually, if this bill passes as is, it may honestly encourage me to either cancel and reconsider other options, or buy just to immediately sell my AP at a marked up price.

 

[DJL]

As a Lucid Air Pure reservation holder and a mid-middle class in my county making borderline $150k annually, if this bill passes as is, it may honestly encourage me to either cancel and reconsider other options, or buy just to immediately sell my AP at a marked up price.

I am sorry to hear this. But I understand. Lucid made their strategic decision regarding what market to go after. Nothing is fixed as things in life change. In this case, the tax credit criteria. While it would seem that a reasonable course of action would be to let the current tax credit criteria continue until the 200,000 car max is met, then for each car company that hits that max, the new tax credit scheme kicks in for that car company. However, that is not what we are looking at. It is a shame that certain car companies and a number of individual buyers get the short end of the stick. However, the bill's aim is to motivate car makers and battery makers to build and manufacture in the US and to get EVs into a price range to many americans can afford and to get as many people into the EV market as fast as it can. You, hopefully, will still buy an EV that will qualify for the tax credit and, in the future, will be able to buy a Lucid or what future BEV meets your criteria then.

 

[joec]

I am sorry to hear this. But I understand. Lucid made their strategic decision regarding what market to go after. Nothing is fixed as things in life change. In this case, the tax credit criteria. While it would seem that a reasonable course of action would be to let the current tax credit criteria continue until the 200,000 car max is met, then for each car company that hits that max, the new tax credit scheme kicks in for that car company. However, that is not what we are looking at. It is a shame that certain car companies and a number of individual buyers get the short end of the stick. However, the bill's aim is to motivate car makers and battery makers to build and manufacture in the US and to get EVs into a price range to many americans can afford and to get as many people into the EV market as fast as it can. You, hopefully, will still buy an EV that will qualify for the tax credit and, in the future, will be able to buy a Lucid or what future BEV meets your criteria then.

Regardless of the intention, I worry these "incentives" for automakers to make cars under $55k will be counterproductive. It's not like Lucid is charging $100k on a whim. The economics of EVs just don't allow for a car built by American labor with American sourced materials for that cheap. Not with a "luxury" brand behind it, anyway.

Maybe Chevy can pull it off, because the Bolt is a minimal fraction of their overall revenue. But for a company like Lucid that only has one car in production?

In five years, maybe they could get there, but cutting off the incentives now could easily lead to an upstart like Lucid not lasting long enough to make it. And it will certainly lead to more folks buying ICE vehicles in the short term.

I think it more likely that most manufacturers will simply live without the tax break and keep making more expensive cars in the short term. Which will hurt adoption at a time when we need to accelerate adoption badly.

 

[Drendino]

The bill is meant to encourage, amungst other things, the middle and lower income groups to move into the EV era and to encourage automakers to build in the US and to encourage the battery industry to build and use US and trade partern materials. It was designed to cause a major shift in these areas to expand their manufacturing of more affordabel BEVs and parts here in the US. For those of you politically into the "US FIrst" way of thinking, it is right up your alley. For those of you who wish to shrink the deficent, it is right up your alley, For those of you who wish to see lower drug prices, it is right up your alley. For those of you who wish to see corporations pay a bit more taxes, it is right up your alley. For those of you who wish to see the IRS be in a better position to catch tax cheaters, this is right up your alley. For those of you who wish to support climate change initiatives, it is right up your alley. For those of you who wish to still offer Big Oil some incentives, this is right up your alley. Lucid loses big time with this bill because they chose to target those fortunate to be able to afford $80+K BEVs as their initial market strategy. This bill, if passed, will encourage Lucid and others to move quicker toward building vehicles that middle income folks can afford. It really has something for both sides of the aisle and if we did not live in such a polarized and distructive political envirnment, it would have supportors of both major parties. It is not perfect, no major piece of legislation is, but it does have some signficant programs that benefit a broad swath of Americans and companies.

This is some masterful spin! Seriously, you must have killed the debate team.

Taking away a major incentive is somehow going to put more EVs on the road by encouraging companies like Lucid to produce cheaper vehicles? It’s amazing how in two weeks they moved the goal posts from getting more ICE vehicles off the road to now getting more middle to low income ICE vehicles off the road. Last I checked carbon doesn’t discriminate by income level and this will hurt the efforts to reduce C02 emissions.

Take a stroll over to Rivian board and see how this is impacting their customers, most of which are middle class. You don’t hear that so much about cancellations on this board, so I concede that it is not as impactful here. The good news is that I’m going to get my R1S sooner. The bad news is that the EV movement will be greatly set back by the people that claim to be leading the green revolution.

 

[LCIDdreams]

Yes it does. Corporations do not pay taxes, they collect them. Taxes are just an input cost. Higher taxes especially on manufacturing in the proposed bill, will cause corporations to raise prices, which is a tax on all consumers and labor, as higher prices imply lower sales and revenue, and a decline in labor headcount. See the JCT scoring of the bill. Also remember that increased IRS oversite means greater enforcement on the middle classes, because that is where the money is and the wealthy can afford to defend themselves in tax court. So doing nothing is better than increasing government involvement in the economy.

What you described is inflation, not a middle class tax increase. Even that is arguable: I don’t remember consumer prices coming down when the corporate tax rate was slashed a few years back, but corporate profits sure improved.

Hard to see much of an issue with making people that cheat on taxes pay what they are legally required to pay. Could tax enforcement be abused? Conceivably, but that possibility is not a reason to not bother enforcing tax law (in the end we all end up paying to subsidize the cheats)

 

[Ksa23]

World does not need ultra luxury EVs.. it needs mainstream, lower cost EV's with use of government funds to assist the industry that should have had more support years ago.

...unless you don't believe the negative effects ICE vehicle have.

The Bolt is a great example of what is possible, and an excellent EV can be had for $55,000/$80,000. Car mfgs will be encouraged to invest more in their EV production to fall into these new brackets so that they can advertise the new credits. Win-win..

.....unless its actually just a conspiracy to increase taxes somehow.

50 years from now, all this negative response will have you looking like a pro-horse, anti-ICE person from the 1900's.

 

[whywar]

What you described is inflation, not a middle class tax increase. Even that is arguable: I don’t remember consumer prices coming down when the corporate tax rate was slashed a few years back, but corporate profits sure improved.

Hard to see much of an issue with making people that cheat on taxes pay what they are legally required to pay. Could tax enforcement be abused? Conceivably, but that possibility is not a reason to not bother enforcing tax law (in the end we all end up paying to subsidize the cheats)

So the government tax increase will cause inflation? It can, but here it drains money and jobs from the private economy. It is estimated that the bill would cost 30000 jobs.

 

[joec]

World does not need ultra luxury EVs.. it needs mainstream, lower cost EV's with use of government funds to assist the industry that should have had more support years ago.

...unless you don't believe the negative effects ICE vehicle have.

The Bolt is a great example of what is possible, and an excellent EV can be had for $55,000/$80,000. Car mfgs will be encouraged to invest more in their EV production to fall into these new brackets so that they can advertise the new credits. Win-win..

.....unless its actually just a conspiracy to increase taxes somehow.

50 years from now, all this negative response will have you looking like a pro-horse, anti-ICE person from the 1900's.

The world needs more EVs, period. Luxury. Cheap. SUV. Pickup truck. Doesn't matter.

Number of Chevy Bolts sold in 2021: 22,000
Number of Model 3s sold in 2021: 500,000

Which company got more ICE vehicles off the rod?

 

[LCIDdreams]

So the government tax increase will cause inflation? It can, but here it drains money and jobs from the private economy. It is estimated that the bill would cost 30000 jobs.

No, I am just saying that your proposition that a minimum 15% tax on corporate profits will cause companies to raise prices and therefore constitutes a tax to the middle class would actually be inflationary, not a tax.

30,000 jobs…Are they accounting for increased manufacturing jobs (cells, battery, and vehicle assembly) in the US? Perhaps they are, but 30,000 / 152,000,000 jobs is 0.0197% which I would argue would likely fall well within the margin of error of whatever methodology they used.

I don’t think the bill, as far as EVs go, is good for various reasons.

 

[Chizle]

Companies will seek to maximize EBIT - income taxes are widely irrelevant outside of shareholder returns.

 

[Amgz]

No, I am just saying that your proposition that a minimum 15% tax on corporate profits will cause companies to raise prices and therefore constitutes a tax to the middle class would actually be inflationary, not a tax.

30,000 jobs…Are they accounting for increased manufacturing jobs (cells, battery, and vehicle assembly) in the US? Perhaps they are, but 30,000 / 152,000,000 jobs is 0.0197% which I would argue would likely fall well within the margin of error of whatever methodology they used.

I don’t think the bill, as far as EVs go, is good for various reasons.

I would assume the 30,000 number was pulled out of someone's a**

 

[DBV]

So we should do… nothing?

And it doesn’t raise taxes on the middle class.

Yes nothing. We are not a Socialistic society. Whole bill is a joke. We don’t need to spend more money for IRS, if anything it should be less and tax codes simplified or go to a flat tax and eliminate the IRS.

If you subscribe or read the WSJ you will see articles about how taxes increase and what this bill really does and how bad it is. It will also raise costs even more for the middle class and corporations will pass off their tax increases. This bill is horrible timing and will only increase inflation. Not the time to keep spending.

And it is not even good for EV’s, as criteria to qualify is all over the place. Why should sedans be less than SUV’s/Trucks, when sedans typically get better range, which then would be even better for the environment. Why keep pushing people into SUV/Trucks? Why are most Euro mfg’s excluded? The whole bill does not even promote healthy competition, which is what the US was founded on and only makes us better.

 

[LCIDdreams]

Seem like a bigger issue could be that given something like 75-90% of all cell materials are refined in China, there seems to be a lot of doubt around that any cars will comply until refining infrastructure is built out in US and US free trade partners (ie in a few years time).

 

[whywar]

I would assume the 30,000 number was pulled out of someone's a**

Not Exactly
It is worth the read.

Details & Analysis of the Inflation Reduction Act Tax Provisions

How will the Inflation Reduction Act tax provisions impact inflation, economic growth, tax revenue, and everyday taxpayers?

taxfoundation.org

Details & Analysis of the Senate Inflation Reduction Act Tax Provisions​

Preliminary Revenue and Economic Estimates​

Net Revenue​

$304B​

Long-run GDP​

-0.1%​

Wages​

-0.1%​

FTE Jobs​

-30,000​

Source: Tax Foundation General Equilibrium Model, July 2022.

 

[Amgz]

Not Exactly
It is worth the read.

Details & Analysis of the Inflation Reduction Act Tax Provisions

How will the Inflation Reduction Act tax provisions impact inflation, economic growth, tax revenue, and everyday taxpayers?

taxfoundation.org

Details & Analysis of the Senate Inflation Reduction Act Tax Provisions​

Preliminary Revenue and Economic Estimates​

Net Revenue​

$304B​

Long-run GDP​

-0.1%​

Wages​

-0.1%​

FTE Jobs​

-30,000​

Source: Tax Foundation General Equilibrium Model, July 2022.

The tax foundation is funded by corporations who don’t want there taxes going up. I’m sure they aren’t biased at all.