Ford EV Tax Credits May Run Out Sooner Than Expected

[Nick Gerteis]

Another wrench in the whole process is if you have other tax credits...esp if they are nonrefundable(most are). You very well could have an initial liability of $7500, but if you have kids or any number of tax credits those would be applied so you may really only have a $5000 you actually "owe" in terms actual money changing hands.

Yes you could argue semantics..that you'd use the full EV credit and less of whatever other credit you have, but if its nonrefundable its a moot point as thats money left you can't use.

(The solar credit CAN be rolled forward, so in that case you'd use the full EV and roll solar to next year. But for how long it can be rolled is anyone's guess if the solar credit is allowed to expire).

Of course if Congress would get their act together and simply make the tax credit either a point of sale refundable credit or allow a rollover this would all not be an issue. Sigh.

Yes, let’s call them. They supposedly work for us?

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[sotek2345]

Yes, let’s call them. They supposedly work for us?

I wrote mine, but it doesn't count for much (NY so they are all in already)

 

[Nick Gerteis]

I wrote mine, but it doesn't count for much (NY so they are all in already)

Thank you! Exact opposite here in Mississippi unfortunately. Never even get a reply. Signs of the times….

 

[greenne]

Thank you! Exact opposite here in Mississippi unfortunately. Never even get a reply. Signs of the times….

At this point all that matters is Manchin. I don't think anyone knows where he *truly* is on EV credits and climate. He showing signs of balking on the EV credit, but at the end of the day I don't know if its a hard NO from him if he was in agreement with the rest.

It could also be a power play where he's playing coy to get something since he knows Biden really likes the EV credits. Just today there's talk of drilling permits and pipelines being used as a ploy to get Manchin on board.

He's the only one holding this process up....

 

[KevinC]

I think Manchin's only hard NO on EV credit was for the Union Bonus Credit. Honestly the union credit was a little politically awkward given the number of non union ev's suddenly being produced in the US. It would be nice to see them change the Union Credit to be a US made credit or something if they really want to have that.

 

[jpepper07]

I didn't know about the SE tax issues. However, I started full time employment in march and should have more than enough tax liability.

 

[greenne]

I think Manchin's only hard NO on EV credit was for the Union Bonus Credit. Honestly the union credit was a little politically awkward given the number of non union ev's suddenly being produced in the US. It would be nice to see them change the Union Credit to be a US made credit or something if they really want to have that.

Manchin has made comments alluding to how it is silly to try to give people money to buy vehicles there are already waiting lists for. Of course he's missing the big picture that almost every vehicle has a waiting list (EV OR ICE) so the demand in itself is a moot point.

What should be the factor is what is the demand for EV as compared to ICE given an equal supply. Given two comparable vehicles, ICE vs EV more often than not Joe Q public will choose the cheaper ICE vehicle. High gas prices has made them slightly more comparable, but when gas prices fall again the delta between Ice and EV will grow again.

Manchin is just making excuses to try to appease his fossil fuel campaign donors....

 

[KevinC]

Manchin has made comments alluding to how it is silly to try to give people money to buy vehicles there are already waiting lists for. Of course he's missing the big picture that almost every vehicle has a waiting list (EV OR ICE) so the demand in itself is a moot point.

What should be the factor is what is the demand for EV as compared to ICE given an equal supply. Given two comparable vehicles, ICE vs EV more often than not Joe Q public will choose the cheaper ICE vehicle. High gas prices has made them slightly more comparable, but when gas prices fall again the delta between Ice and EV will grow again.

Manchin is just making excuses to try to appease his fossil fuel campaign donors....

I agree, If Ford made 1 million Lightnings this year at their current pricing and similar trim allocation there is no way they'd sell half of them. Not enough people are ready for it. If they made mostly Pros that would be a different story.

There are many non obvious costs to EV ownership. With the higher average prices also come the higher average sales taxes and higher yearly property taxes. Some states are even inventing new targeted EV taxes when they should be doing the opposite. Right now you may be able to flip a lightning for a huge profit, but in 5 years their value is going to fall like a rock(more than ICE) as newer EV's are just going to be significantly better and more plentiful. There is still alot of built in financial punishment for early adopters. I think the higher trims are going to suffer the most in 5 year resale because of the leaps in technology that will occur. Now and even more in the future the PRO is going to look like the best value. It has less technology to go obsolete so it's going to hold it's value better for what it is.

 

[PungoteagueDave]

I agree, If Ford made 1 million Lightnings this year at their current pricing and similar trim allocation there is no way they'd sell half of them. Not enough people are ready for it. If they made mostly Pros that would be a different story.

There are many non obvious costs to EV ownership. With the higher average prices also come the higher average sales taxes and higher yearly property taxes. Some states are even inventing new targeted EV taxes when they should be doing the opposite. Right now you may be able to flip a lightning for a huge profit, but in 5 years their value is going to fall like a rock(more than ICE) as newer EV's are just going to be significantly better and more plentiful. There is still alot of built in financial punishment for early adopters. I think the higher trims are going to suffer the most in 5 year resale because of the leaps in technology that will occur. Now and even more in the future the PRO is going to look like the best value. It has less technology to go obsolete so it's going to hold it's value better for what it is.

Sorry, but Ford has achieved rough parity between ICE pricing and EV pricing model for model with the F-150 Lightning. Even at one million units Ford WOULD sell every one and still have a waiting list - see Tesla, which sells over one million vehicles per year and still has a huge backlog for every model despite well known quality control problems, massive price increases, bad press on self-driving, and a CEO who is off the rails.

I can sell my three-year old Tesla MX SUV today for more than I paid brand new, with 42k miles on it - and will do so next week when my Lightning is delivered - have a CarMax offer in hand to prove it. I will also receive more on trade from a Florida Ford dealership for my one year old PowerBoost than I paid them for the vehicle in May 2021, with 12k miles on it ($74k). The world is upside down... tax credits were never necessary to sell EV's and are a moral hazard, now morphed into a true evil - added government borrowing for discretionary luxury purchases by people who mistakenly believe that they are somehow saving the planet with their 6,000-pound electric trucks.

 

[Texas Dan]

According to https://fueleconomy.gov/feg/taxevb.shtml Ford has not yet the 200,000 mark.

 

[rlbussard]

They have sold approximately 182,567 towards that 200k. Between the Lightning and the Mach E numbers, I can almost bet that they hit the 200k by the end of September. With the Mach E selling 11k vehicles last quarter, that puts the total at 193k without the Lightning if they repeat that number. With all of the Lightnings now shipping, I don't see it being less than 7,000 trucks delivered between now and the end of September. Who knows, maybe Ford will trickle the Mach E deliveries so that they don't pass it until the October quarter.

 

[sotek2345]

They have sold approximately 182,567 towards that 200k. Between the Lightning and the Mach E numbers, I can almost bet that they hit the 200k by the end of September. With the Mach E selling 11k vehicles last quarter, that puts the total at 193k without the Lightning if they repeat that number. With all of the Lightnings now shipping, I don't see it being less than 7,000 trucks delivered between now and the end of September. Who knows, maybe Ford will trickle the Mach E deliveries so that they don't pass it until the October quarter.

Don't forget the e-Transit and their plug in hybrids as well. Definitely hitting the 200k limit this quarter.

 

[FordLightningMan]

Sorry, but Ford has achieved rough parity between ICE pricing and EV pricing model for model with the F-150 Lightning. Even at one million units Ford WOULD sell every one and still have a waiting list - see Tesla, which sells over one million vehicles per year and still has a huge backlog for every model despite well known quality control problems, massive price increases, bad press on self-driving, and a CEO who is off the rails.

I can sell my three-year old Tesla MX SUV today for more than I paid brand new, with 42k miles on it - and will do so next week when my Lightning is delivered - have a CarMax offer in hand to prove it. I will also receive more on trade from a Florida Ford dealership for my one year old PowerBoost than I paid them for the vehicle in May 2021, with 12k miles on it ($74k). The world is upside down... tax credits were never necessary to sell EV's and are a moral hazard, now morphed into a true evil - added government borrowing for discretionary luxury purchases by people who mistakenly believe that they are somehow saving the planet with their 6,000-pound electric trucks.

Which is why we need an EV point of sale credit for vehicles under $40k and families with income under the national median.

Any EV credit for a luxury vehicle makes no sense. The world changed since the credit was put in place, the government needs to change the credit. It doesn't need to be a simple no or yes either, let's refine the credit to spark development of affordable EVs.

 

[greenne]

Don't forget the e-Transit and their plug in hybrids as well. Definitely hitting the 200k limit this quarter.

Not *quite* ready to call it, but 99% sure they will just creep over 200k by Sept 30.

What this means in a practical sense is up to full credit would be available for deliveries in Q3 and Q4 2022.

Deliveries in Q1-Q2 2023 (Thru Jun 30, 2023) would be up to half credit $3750

Q3-Q4 2023 would be up to 1/4 credit.

As has be discussed here(and elsewhere) not every tax situation will qualify for the full available credit. Consult a tax advisor for details.

 

[Nick Gerteis]

Not *quite* ready to call it, but 99% sure they will just creep over 200k by Sept 30.

What this means in a practical sense is up to full credit would be available for deliveries in Q3 and Q4 2022.

Deliveries in Q1-Q2 2023 (Thru Jun 30, 2023) would be up to half credit $3750

Q3-Q4 2023 would be up to 1/4 credit.

As has be discussed here(and elsewhere) not every tax situation will qualify for the full available credit. Consult a tax advisor for details.

If it’s a close one by 9/30 and they have half a brain, they will delay delivery of a few thousand vehicles to 10/1 just to keep the credit for another quarter. I think Tesla did just that when they were in this situation a couple years ago.

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