Would I still qualify for current federal rebate?

[gschom]

My apologies if this was already discussed elsewhere. I've seen inconsistent explanations around this and wanted to ask about it for my specific scenario.

Long story short, I have a platinum lightning coming in 8/11 - 8/17, according to the online tracker and dealer. I have the purchase order in hand but don't want to sign it until I can actually inspect the truck (fingers crossed it arrives this week).

I unfortunately won't qualify for the new incentives. So my concern is that if the new federal EV incentives become law before I sign the purchase order, that I'll lose out on the $7500 rebate. I have to believe that there is a little wiggle room here, right? I really don't want to sign an agreement to buy something so expensive without inspecting it first.

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[mastapsi356]

Negotiate a contingency clause with your dealer asking the lines of "The customer reserves the right to terminate the purchase if the vehicle has any significant defects"

That gives you your out and that is infact a binding agreement.

 

[monsterlag]

What a mess! Your best bet is to sign it and get it over with. Ford will take care of you if you have issues with their flagship vehicle.

 

[gschom]

Negotiate a contingency clause with your dealer asking the lines of "The customer reserves the right to terminate the purchase if the vehicle has any significant defects"

That gives you your out and that is infact a binding agreement.

I'd love to do this but I have to believe the dealer will push back.

 

[jazzmanmonty]

I would sign whatever to secure the deal as soon as you can. If there are any significant problems, just DONT drive it off the lot. Leave it at the dealer until it's fixed. Point out what needs to be fixed and then leave it there. Take it home when you're satisfied.

here's a quick story. My uncle bought a very nice Sierra deisel last month and dealer let him pay and do all the paperwork before it came. It came in and long horror story short they had to redo the whole AC system and lines. It's still at the dealer over a month since it came and are still trying to fix it. But he had the purchase secured, no ADM, and got his low interest rate. Worst case, the dealer can give him his money back if Lemon Law kicks in. It sucks he had to make his first payment but he got the deal. Moral is, get your deal locked in!

 

[cvalue13]

I unfortunately won't qualify for the new incentives. So my concern is that if the new federal EV incentives become law before I sign the purchase order, that I'll lose out on the $7500 rebate. I have to believe that there is a little wiggle room here, right? I really don't want to sign an agreement to buy something so expensive without inspecting it first.

Ignoring the fact that nobody here (or anywhere else) actually knows the answer to your question (because not only is the bill not finalized, more importantly the IRS hasn’t made its interpretations or rule makings, which will be months away)…

Setting that all-important but aside:

You may be under-appreciating what these trucks are trading for on the secondary market, and what that fact means for your strategies.

let’s say you choose so sign your agreement, and the truck comes in with some issue the dealer can’t resolve to your satisfaction, then either:

(1) the dealer will almost certainly purchase the truck from you and keep you completely whole, then turn around and sell it for a premium, or

(2) depending on the issue causing you to not want the truck, you simply turn around and sell the truck and keep the premium yourself

With those as the backup, it seems very unlikely they’ll deliver a vehicle with a problem keeping you from taking the truck (Or taking it and selling it back to the dealer or a 3rd party)

Worst case (but unlikely) scenario is these trucks are trading on the secondary market NEARER to MSRP in a month, though that would still seem to mean you’re not risking much value in signing - if you’re interpreting that signing gets you in under the current EV tax credits

 

[gschom]

Ignoring the fact that nobody here (or anywhere else) actually knows the answer to your question (because not only is the bill not finalized, more importantly the IRS hasn’t made its interpretations or rule makings, which will be months away)…

Setting that all-important but aside:

You may be under-appreciating what these trucks are trading for on the secondary market, and what that fact means for your strategies.

let’s say you choose so sign your agreement, and the truck comes in with some issue the dealer can’t resolve to your satisfaction, then either:

(1) the dealer will almost certainly purchase the truck from you and keep you completely whole, then turn around and sell it for a premium, or

(2) depending on the issue causing you to not want the truck, you simply turn around and sell the truck and keep the premium yourself

With those as the backup, it seems very unlikely they’ll deliver a vehicle with a problem keeping you from taking the truck (Or taking it and selling it back to the dealer or a 3rd party)

Worst case (but unlikely) scenario is these trucks are trading on the secondary market NEARER to MSRP in a month, though that would still seem to mean you’re not risking much value in signing - if you’re interpreting that signing gets you in under the current EV tax credits

This makes sense, but I should also mention that they have verbally stated they’ll be enforcing the no-resale clause for 1 year after I purchase the truck. We’ll see if that’s actually true or if it was just a threat.

There’s nothing on the purchase order about it, but I’m assuming it’s a separate document I sign on delivery day.

 

[sotek2345]

My read of the bill (I am not a lawyer) is that any sale completed by 12/31/22 can use the existing law. The only time you have to deal with the "binding contract" transition business is if you order in 2022 and don't take delivery until 2023.

 

[jdarmstrong]

The new bill, if passed, will not go into affect until 1/1/2023. As long as you take delivery before that date then you will qualify for the EV tax credit in its current form.

 

[sotek2345]

My read of the bill (I am not a lawyer) is that any sale completed by 12/31/22 can use the existing law. The only time you have to deal with the "binding contract" transition business is if you order in 2022 and don't take delivery until 2023.

Here is my reasoning if anyone is interested. Legislated text section copied below:

k) EFFECTIVE DATES—(1) IN GENERAL—Except as provided in paragraphs (2), (3), (4), and (5), the amendments made by this section shall apply to vehicles placed in serv ice after December 31, 2022.

- Everything kicks in on 1/1/2023 except as noted below

(2) FINAL ASSEMBLY—The amendments made by subsection (b) shall apply to vehicles sold after the date of enactment of this Act.

- Vehicles need to be assembled in the US right away (no issue for the Lightning)

(3) PER VEHICLE DOLLAR LIMITATION AND RELATED REQUIREMENTS —The amendments made by subsections (a) and (e) shall apply to vehicles placed in service after the date on which the proposed guidance described in paragraph (3)(B) of section 30D(e) of the Internal Revenue Code of 1986 (as added by subsection (e)) is issued by the Secretary of the Treasury (or the Secretary’s delegate).

- Subsection (a) is the MSRP limit, subsection (e) is the mining and material requirements. Neither of these kick in until formal guidance is issued (target date is 12/31/22, though it could come sooner)

(4) TRANSFER OF CREDIT —The amendments made by subsection (g) shall apply to vehicles placed in service after December 31, 2023.

- No point of sale rebate until 2024

(5) ELIMINATION OF MANUFACTURER LIMITATION —The amendment made by subsection (d) shall apply to vehicles sold after December 31, 2022.

- Kicks in 1/1/2023. Already covered in (1), so I am not sure why they list it again.

(l) TRANSITION RULE —Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that— (1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and (2) placed such vehicle in service on or after the date of enactment of this Act, such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.

- If you enter into a binding agreement (not yet defined), before the enactment date, you can use the old rules regardless of when you take delivery. For the Lightning, this will largely impact those taking delivery in 2023 and over the $80k cap.

 

[FlasherZ]

- If you enter into a binding agreement (not yet defined), before the enactment date, you can use the old rules regardless of when you take delivery. For the Lightning, this will largely impact those taking delivery in 2023 and over the $80k cap.

The old rules contain the 200,000 unit cap as well, so if you are taking delivery past 1/1/2023, you may also be affected by the phase-out rules. Don't forget that.

 

[gschom]

Here is my reasoning if anyone is interested. Legislated text section copied below:

k) EFFECTIVE DATES—(1) IN GENERAL—Except as provided in paragraphs (2), (3), (4), and (5), the amendments made by this section shall apply to vehicles placed in serv ice after December 31, 2022.

- Everything kicks in on 1/1/2023 except as noted below

(2) FINAL ASSEMBLY—The amendments made by subsection (b) shall apply to vehicles sold after the date of enactment of this Act.

- Vehicles need to be assembled in the US right away (no issue for the Lightning)

(3) PER VEHICLE DOLLAR LIMITATION AND RELATED REQUIREMENTS —The amendments made by subsections (a) and (e) shall apply to vehicles placed in service after the date on which the proposed guidance described in paragraph (3)(B) of section 30D(e) of the Internal Revenue Code of 1986 (as added by subsection (e)) is issued by the Secretary of the Treasury (or the Secretary’s delegate).

- Subsection (a) is the MSRP limit, subsection (e) is the mining and material requirements. Neither of these kick in until formal guidance is issued (target date is 12/31/22, though it could come sooner)

(4) TRANSFER OF CREDIT —The amendments made by subsection (g) shall apply to vehicles placed in service after December 31, 2023.

- No point of sale rebate until 2024

(5) ELIMINATION OF MANUFACTURER LIMITATION —The amendment made by subsection (d) shall apply to vehicles sold after December 31, 2022.

- Kicks in 1/1/2023. Already covered in (1), so I am not sure why they list it again.

(l) TRANSITION RULE —Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that— (1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and (2) placed such vehicle in service on or after the date of enactment of this Act, such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.

- If you enter into a binding agreement (not yet defined), before the enactment date, you can use the old rules regardless of when you take delivery. For the Lightning, this will largely impact those taking delivery in 2023 and over the $80k cap.

Thank you for taking the time to break this down!

 

[hturnerfamily]

what congress should realize is that there are tens of thousands of EVs that are ALREADY ORDERED, and customers have NO CONTROL over delivery dates - so, those folks should be able to span the gap and use WHICHEVER of the bills that works best for them.

 

[sotek2345]

what congress should realize is that there are tens of thousands of EVs that are ALREADY ORDERED, and customers have NO CONTROL over delivery dates - so, those folks should be able to span the gap and use WHICHEVER of the bills that works best for them.

That is what the transition rule is supposed to do, we just don't have clarity of what they will consider a "binding agreement"

 

[cvalue13]

My read of the bill (I am not a lawyer) is that any sale completed by 12/31/22 can use the existing law. The only time you have to deal with the "binding contract" transition business is if you order in 2022 and don't take delivery until 2023.

The new bill, if passed, will not go into affect until 1/1/2023. As long as you take delivery before that date then you will qualify for the EV tax credit in its current form.

Your conclusions asserted here might still lead to some confusion. Just one clarification (not sure if others are needed): it is definitely not true that nothing goes into effect until 1/1/2023 - as just one example, the North American manufacturing rules go into effect upon signing by the President (which is why Fisker is presently offering “binding contracts” to customers with orders). The manufacturing limit of course doesn’t effect the F150L.

As relates to OP, the outcome may be the same but wanted to make the clarification in case it runs contrary to assertions being seein elsewhere (that equivocate on the manufacturing limitation as reason to say the bill “goes into effect” when signed by the President.

If you enter into a binding agreement (not yet defined), before the enactment date, you can use the old rules regardless of when you take delivery. For the Lightning, this will largely impact those taking delivery in 2023 and over the $80k cap.

When does the income cap take effect?

To be just a little clearer, the “enactment date” is the date it is signed by the President, not the “after 12/31/22” effective date of the broader bill.

So, from and after the President’s signature (only a week or two away), there are at least a few things that change for EVs generally (less effect the F150L specifically).

For EV’s not manufactured in North America, to elect (on your 2022 taxes) to qualify under the old tax credit, you must have a “binding” contract before the President signs. This does not effect the F150L.

But what could theoretically effect the F150L buyer is the old tax credit’s 200K cap, but only if Ford reaches its cap before the last day of September, 2022. The reason the September date is relevant is this: the 200k cap allows credits for any car purchased within the calendar quarter a manufacturer hits the 200k sale; accordingly, if Ford doesn’t reach its 200k sale until October 1 (the beginning of Q4), then Ford will be eligible for the old tax treatment through the end of 2022 and the effective date of the new bill on Jan 1, 2023.
If instead Ford reaches its cap before the last day of September then: (1) people who took delivery before the last day of September will still get the full credit, and (2) people who take delivery from Oct. 1 through end of Q4 will not receive the full $7,500 but instead take the reduced roll-off credit amount (~$4k?).

In all, while I’m still struggling to understand some parts of the bill and so not as confident as earlier posters, it does seem that F150L orders that are delivered before 12/31/22 are unlikely to see any changes if they want to elect into the old bill.

For those taking delivery after 12/31/22, exactly how they are effected is likely to turn on details coming out of the IRS’s interpretations and rule-makings.

HOWEVER, the at-dealer REBATE in the new bill does not roll on until 2024. That means any F150L owner taking deliver in 2023 will not “feel” the new bill except by way of a tax credit in their 2023 taxes.

On one hand, this means people taking delivery in 2023 will have plenty of time to come to understand how the new bill will effect their tax treatment in 2023.

Ok the other hand, it means people fretting over the application of their $7,500 situation under this new tax bill should understand that it is not going to change your purchase price or financing, and the benefits of any tax credit won’t be realized fully until cutting your final 2023 tax bill (likely months unto 2024).

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