Uh, Oh... looks like the EV tax credits are hitting an obstacle

[Tony Burgh]

So are EVs similar or cheaper than Ice vehicles or is only one trim level from one model from one manufacturer close in price? Honestly want to know. My only factual evidence is when my wife bought her Prius Prime which was more expensive than the non-PHEV version. That was apples to apples. I keep hearing one obstacle to EV adoption is cost (and range anxiety). Are they wrong?

Maybe purchase price is an obstacle. The cost of long distance travel in an EV vs ICE should be an obstacle. But for most people who make short trips and moderate commutes daily, the incentive is operating cost of an EV being half of ICE operating cost.
This isn’t an investment that should be made without thought. But that’s how many people buy vehicles. And get taken to the cleaners.

Sponsored

 

[EaglesPDX]

I keep hearing one obstacle to EV adoption is cost (and range anxiety). Are they wrong?

No. Average is $20k for an EV version of an ICE. This is cost based as the battery adds most of the cost differential.

Kona EV Ultimate $46k
Kona ICE Ultimate $29k

This is most noticeable as you go down in price, in upper price ranges it is less noticeable. A Platinum F150ICE vs. a Platinum F150EV see little price differential. This is a conscious strategy on Ford's part based on the high profit ratio of loaded pickups. Ford will eat some profit on the higher cost, low volume introductory F150EV and will no doubt adjust prices to match the costs as volume and acceptance increase.

 

[PungoteagueDave]

You won't find an economist on either side who does not admit that tax subsidies will increase the buying behaviors being subsidized.

Skip the economic ideology.

1. Problem We need to greatly accelerate EV adoption in US.
2.Solution (partial). Generous subsidies will increase EV adoption in the US.

We do have good examples from South Carolina to Guangdong, that the EV subsidies work.

I am economist and teach at the graduate level at a major university. Your statement is correct only up the point that it is POSSIBLE to change behaviors. However, if the maximum extent of a behavior is ALREADY locked in, which maximum EV adoption IS at this point for the next few years (total production is already spoken for through the expiration of the proposed credits, with or without the credits), then it is simply not possible to impact behaviors at all with such credits.

 

[EaglesPDX]

Your statement is correct only up the point that it is POSSIBLE to change behaviors.

It's proved correct in practice as we see in Carolina and Guondong.

The EV incentives have proven themselves in every application in every world economy.

Real world vs. economic ideology. MIT study on China's use of subsidy and regulation and Norwegian subsidy success. The two leading EV adoption countries.

"When the subsidy on EV purchases is eliminated and the mandate is enacted in 2020, total car sales shrink."

https://news.mit.edu/2021/chinas-transition-electric-vehicles-0429

The Norwegian example of increased subsidies.

"The progressive tax system makes most EV models cheaper to buy compared to a similar petrol model, even if the import price for EVs are much higher. This is the main reason why the Norwegian EV market is so successful compared to any other country."

The Norwegian EV incentives:

• No purchase/import taxes (1990-)
• Exemption from 25% VAT on purchase (2001-)
• No annual road tax (1996-2021). Reduced tax from 2021.
• No charges on toll roads or ferries (1997- 2017).
• Maximum 50% of the total amount on ferry fares for electric vehicles
• Maximum 50% of the total amount on toll roads (2019)
• Free municipal parking (1999- 2017)
• Parking fee for EVs was introduced locally with an upper limit of a maximum 50% of the full price
• Access to bus lanes (2005-).
• New rules allow local authorities to limit the access to only include EVs that carry one or more passengers (2016)
• 50 % reduced company car tax (2000-2018).
• Company car tax reduction reduced to 40%
• Exemption from 25% VAT on leasing (2015)
• Fiscal compensation for the scrapping of fossil vans when converting to a zero-emission van (2018)

 

[Brian Head Yankee]

Dave,
Don't bother. Eagles is frozen with his belief. Logic and facts will not sway him. Time for us to leave him to himself and move on to discussing the exciting Lightning truck.

 

[AgieF150]

Dave,
Don't bother. Eagles is frozen with his belief. Logic and facts will not sway him. Time for us to leave him to himself and move on to discussing the exciting Lightning truck.

logic is missing in current environment.

 

[greenne]

I am economist and teach at the graduate level at a major university. Your statement is correct only up the point that it is POSSIBLE to change behaviors. However, if the maximum extent of a behavior is ALREADY locked in, which maximum EV adoption IS at this point for the next few years (total production is already spoken for through the expiration of the proposed credits, with or without the credits), then it is simply not possible to impact behaviors at all with such credits.

I disagree that the maximum extent of behavior is locked in currently. Multiple manufacturers have stated a rapid growth of EVs in the next few years with dozens of new models being produced. Moreover, as the price of technology comes down-- there will be more of these EVs geared towards those of more modest income. Whereas those of a higher income(i.e. more disposable income) were swayed with the novelty factor, those of lesser means will need incentives to jump into a more expensive EV compared to a comparable ICE.

Electric vehicle trends | Deloitte Insights

Only certain models of EVs are sold out-- you can still go out and buy a Bolt, a Leaf, or a Niro EV with no additional wait(compared to the typical ICE model).

As for the credit, I'll say it again... if the goal is to get people to switch from ICE cars to EVs(for the sake of the environment) its simply not enough to match what they have currently(value equation). With people keeping their vehicle on average 10+ yrs it would take way too long. The credit would have to make it economically advantageous to trade in their ICE "early" for an EV.

 

[Snakebitten]

If manufacturers would do as good a job as Ford is currently doing with the LURE of Ev's to folks that were NOT previously lured....

There's a reason that the Lightning isn't just another Chevy Bolt, Nissan Leaf, or even a Tesla.

In my opinion some percentage of the consumers that couldn't be coaxed to Ev's no matter WITH the tax payers funding of a "rebate" was simply because the products offered were NOT appealing. It's not ALWAYS about the price folks.

An electric jeep rockcrawler will appeal to the rockcrawler lovers.

 

[EaglesPDX]

Only certain models of EVs are sold out-- you can still go out and buy a Bolt, a Leaf, or a Niro EV with no additional wait(compared to the typical ICE model).

And are the less expensive EV's for the majority of car owners, exactly the buyer demographic that responds the most to price reductions that the subsidy creates.

Biggest best change to EV tax credit is making it a refundable tax credit so that even if one owed zero taxes, one would get the full tax credit. Get those EV's and PHEV's off the lot replacing ICE vehicles.

 

[rdr854]

If manufacturers would do as good a job as Ford is currently doing with the LURE of Ev's to folks that were NOT previously lured....

There's a reason that the Lightning isn't just another Chevy Bolt, Nissan Leaf, or even a Tesla.

In my opinion some percentage of the consumers that couldn't be coaxed to Ev's no matter WITH the tax payers funding of a "rebate" was simply because the products offered were NOT appealing. It's not ALWAYS about the price folks.

An electric jeep rockcrawler will appeal to the rockcrawler lovers.

@Snakebitten is correct. When I had my hybrids, I purchased Ford Fusions because I wanted a normal looking/feeling car with a hybrid powertrain; something the Prius was not. I have no interest in the RiIvan or Teslas because of the interior set up. The Volvo Recharge series, Polestar 2 and Ford MME all meet that desire, and as far as trucks, the F-150 Lightning is in a class by itself as a mainstreamelectrified product. My hope so thatother OEMs will catch on that futuristic is not necessarily better.

 

[Snakebitten]

Eggzactly

The Fusion Hybrid was a Fusion.

And Ford's new little Maverick Hybrid at $20k? Why have they figured this out? They will sell a boatload of those to folks that weren't necessarily the Prius crowd. Heck, that's a bargain vehicle in so many ways. And there's no subsidy required to make it a bargain.

 

[astricklin]

Agree... to make it concrete...what are the differentiators besides 4 door, 4 wd, larger screen?
Arent' a lot of creature comforts the same? Don't really care for them and can go aftermarket if I really want prostate massager....

Connected Navigation, tow package, fx4 (skid plates and locking rear diff), pro-power, keyless entry

 

[TF1000]

Prius crowd? Prius not looking/feeling like a normal car? Man you guys are showing your true colors. I live on a farm and have been driving a Prius since 2006. Is that the crowd you're talking about? Just last week I had to pick up something 10' long and was fragile. Used my Prius instead of the pick-up cause it fit completely inside and with the truck it would have hung out past the tailgate a few feet. It's easily the best (and most reliable) vehicle I've owned in my 63 years. I feel sorry for people who worry about what others think when purchasing a car.

 

[Snakebitten]

My lack of passion for a Prius has nothing to do with what others might think about me or what I drive.

 

[shutterbug]

Prius crowd? Prius not looking/feeling like a normal car? Man you guys are showing your true colors. I live on a farm and have been driving a Prius since 2006. Is that the crowd you're talking about? Just last week I had to pick up something 10' long and was fragile. Used my Prius instead of the pick-up cause it fit completely inside and with the truck it would have hung out past the tailgate a few feet. It's easily the best (and most reliable) vehicle I've owned in my 63 years. I feel sorry for people who worry about what others think when purchasing a car.

A prius is as reliable as a kids tricycle. And just as much fun.

Sponsored