US electric car incentive is rumored to increase to $10,000 in program reform – Electrek

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32 thoughts on “US electric car incentive is rumored to increase to $10,000 in program reform – Electrek”
  1. This has to happen quickly or get murdered.

    Potential incentives ‘coming soon’ is a great way to kill sales

  2. I hope this is paired with investments in charging infrastructure, especially for multi-family housing where it might be cost-prohibitive to install charging for everyone. People need access to at-home charging if an EV is going to be as convenient as their current gas car. There could also be investments in street-side public charging. Millions of people only have access to on-street parking, where again, an EV may not be as convenient. Incentivizing EV ownership is more than just the car.

  3. Rumors are rumors, but my question is what constitutes a Made in America EV? For what exists right now I’m coming up with a really short list of Teslas and Leafs.

  4. So I’m assuming the point of sale rebate just reduces the price? This will only be on new vehicles correct? Also are any of these tax incentives or all of them still non-refundable credits?

  5. I would definitely buy another EV if this passes. I just hope manufacturers don’t increase the price.

  6. I’m literally going to buy a car today… so should I wait? I don’t need the car right now so I can afford to wait but I have a feeling the price will go up if this passes which would basically wipe out the extra savings. If they make it retroactive though…

  7. It doesn’t need to be bigger, it needs to be broader. When half of all Americans don’t pay taxes, a non-refundable credit is really only applicable to high earners who drive early adoption. That *was* great, but it’s not the market tipping point anymore.

    We need more charging infrastructure, we need lower cost of entry – which will come through used vehicles with sufficient range starting to hit the market in big enough numbers.

    Sounds like they may be, possibly, addressing some of this, potentially, *if* this happens. Which is good.

  8. So is the 10k a tax credit like what Tesla had in 2019 before they ran out? I can’t imagine the average person who makes 50k to benefit from the full 10k amount but I guess something is better than nothing.

  9. They should really pair this with a slowly increasing tax on new ICE vehicles. If we’re going to eliminate ICE vehicles (which you know, climate change), we should make people that are paying for new ones fund electric vehicle discounts.

  10. All the cheap teslas would get bought up overnight if this happened.

    50k would be the new base price for one, if you could get one.

    Of course these credits are non refundable, at least in their current state, so one would need to have a tax liability of at least $10,000 federally to take full advantage. This would mean you’d need to be making close or at 6 figures.

    Most people dont owe $10k in federal taxes, even if they make a lot since married folks have a much more favorable tax bracket.

  11. This is poor policy. There needs to be a plan to both extend subsidies and draw them down in a manner that makes the industry self-sustaining.

    I would argue something to the effect of basing subsidies on the $/kWh needed to achieve parity with gas cars. And then planning a phase out. It’s currently $137/kWh (as per Bloomberg NEF). And $60/kWh is probably parity for a 300 mile car. For an 80 kWh battery that’s $6160. So if they start the subsidy at $7000 for 2022 and cut $1000 annually till it hits $0 in 2030.

  12. I hope it somehow can deincentize these PHEV which get abhorrent 20 miles range, BEV all the way.

  13. Too bad Ford decided to produce the Mach E in Mexico. It’d have been a good deal after a $10k tax break.

  14. Wish our fkng conservative premier wouldn’t have taken off the rebate here in Ontario.

  15. **Federal tax credits will result in price hikes to offset them**.

    Why would Tesla cut final price to the consumer by $10k when they’re already selling out their inventory at the current price? Why would anyone think they’re just going to meanderingly leave $10k on the table? If they can continue selling their vehicles at the same final price after credit by raising their MSRPs and padding their margins… who honestly thinks they’re NOT going to do that?

    Clearly a lot of naïve people here. We already have evidence of this.

    We saw the difference in pricing when a company gets the credit versus when they lose them. Both Tesla and GM lost their credits in 2019. During the sunset phase when the credit halved itself every 2 quarters, both Tesla and GM cut their prices with each halving. The difference in final price to the customer was almost zero before and after these companies lost their tax credits. All the people who ran out to get the credit before it expired were probably pretty surprised when Tesla began rapidly reducing their MSRP once the tax credit started getting reduced.

    Tesla doesn’t do factory incentives, so their only choice was to cut MSRPs… which they did multiple times. GM on the other hand left their MSRPs untouched, but cut prices with large dealer and factory incentives. MSRP on a base level Chevy Bolt is $41,700. Chevy’s site shows that there’s a cash allowance of $10k right off that top of that price. However, you can easily find dealerships selling brand new base level 2021 Chevy Bolts on autotrader for under $22k. The additional discount beyond GM’s $10k discount on their site is due to lack of sales. I’ve seen a few dealerships offering them for under $19k!

    Federal tax credits were always meant to subsidize the company, not the customer, incentivizing the company to spend on R&D and to expand production, while remaining solvent. Look at Tesla’s financials. They would actually be insolvent without GHG credit sales and government tax credits. The customer is simply the mechanism to transfer the money from the taxpayers to the company.

    No doubt there’s a bit of psychology involved here; as you can see in the comments, a lot of people actually believe they’re getting a discount. They’re not.

    The federal credit makes it more difficult to buy the vehicle at a cheaper price. With the credit, you need to have a base level of income to qualify for the full credit, and you have to wait for your tax return at the end of the year. Maybe this new credit will be instant and not based on income? Who knows. If anything, losing the credit opened up Tesla to more demand since final price wasn’t income based.

    Without the credit, companies have proven that they will cut their prices to the same final price to the customer, only the customer doesn’t need a base level income to get the full credit, nor do they have to wait to get the money back which requires they take out a larger loan; potentially having a greater impact on their credit and potentially increasing the price of gap insurance.

    Democrats (disclaimer: I’m a staunch liberal) seem to be pushing this policy as a result of two companies who ran through their federal credit quotas before other companies. It shows favoritism. We already know Nancy Pelosi, one of the most powerful Democrats in Congress, bought $1 million in Tesla call options in December, and serves to gain a lot of money with Tesla’s success… Tesla is also HQ’d in her state and CA is BY FAR Tesla’s largest customer base. Why ever would she want to give Tesla more free money? /s

    Tesla already earned $3 billion from taxpayers from the original federal credit, which has helped propel them to the front of the EV game, both in technology and production, making them more valuable than most major OEMs on the planet combined. It helped them gain entry into the S&P 500 and helped them raise $10 billion in private funding through new share offerings in 2020 alone. Why exactly is our government attempting to continuously prop this company up? As a result of their production lead, they serve to benefit from a new tax credit FAR MORE and FAR FASTER than any other company. Hell, they could end up selling more EVs in the US than every other company combined (which isn’t all that many), quickly sucking down another $4+ billion in taxpayer funding on only 400k vehicle sales in about 1-2 years. That’s CRAZY to give a company so much free money on so few cars produced.

    Elon Musk was previously the richest man on the planet, and his company is the wealthiest OEM on the planet. Why then does this company need more free taxpayer funding? They’re also making bank on regulatory credit sales that other OEMs are effectively forced to pay them for; a type of OEM funded subsidy.

    Why can’t Tesla get loans or sell more shares like every other company? Why does it always have to be free government / taxpayer handouts that this company NEVER has to pay back a cent of?

  16. It would be a good idea but only for cars under $30k and more than 250 miles range and fast charging. It will force the manufacturers to bring the costs down instead of just making compliance BEVs like it happened in the early 2010s.

  17. Dumb. This will only encourage people to overspend. Just enforce and strengthen CAFE requirements and maybe increase the federal fuel tax.

  18. The credit needs to be limited to people and families under a certain income. This can vary by state as each state has different average income, but giving the breaks to people making 500K a year is silly.

    Edit: I agree with the comment below that a rebate is a much better idea than a credit.

  19. I am not a huge fan of keeping to increase the incentives. Something like that I would feel needs to backwards and that screws a lot of us who already bought EV at the lower levels. It will instantly lower the trade in values of our cars by 10k for a total lose of 2500-10k depending on the cap before hand.

    Also I feel at some point these needs to be phased out and just force the auto manufactures to make profit with out it. Otherwise we will just be tax payer funding car sells as they will struggle to ever get the cap gone. I do like the idea of tying the sell to total evs with a max cap per manufacture. If a manufacture does not get to their cap when the total sells hits it well tough shit for those.

  20. There really shouldn’t be *any* (federal) incentive for EVs, frankly. The states or cities or whatnot could do that, but it’s not a function of the Federal government.

  21. so do we think cars already purchased in 2021 will be eligible? that would be nice

  22. Unless this is 10k off purchase price it isn’t going to change a whole lot in terms of sales. The upfront cost is what is slowing the sales right now.

  23. Just bring down the prices of used EVs again, let all the new tech flood the market so we can get these older models down to reasonable prices. It’s clear that making an “affordable” (sub-$20k anybody?) EV isn’t in the sshort-term, so allow those like myself (currenly driving a 2nd hand Leaf) and others to get their feet wet at reasonable used prices.

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