Are order conversion rates absolutely horrific?

[392DCGC]

That is not what I read and have not seen any further guidance which allows that interpretation, could you share a link of what you have seen?

Here's what I have......
https://www.irs.gov/businesses/plug-in-electric-vehicle-credit-irc-30-and-irc-30d
https://www.irs.gov/pub/irs-drop/n-22-46.pdf

I came across a post yesterday that led me to believe it was in the law - should have known not to assume it was true without verifying. The law text has no mention of base vs option MSRP as I just read it. What I had seen yesterday was an excerpt from Ford's disclaimer section saying base vs option pricing would be the determining factor for MSRP tax credit eligibility. Until we know for certain, people should err on the side of assuming the total MSRP (including options & destination) is the deciding factor. Hopefully there is guidance released prior to Jan 1st, otherwise some buyers are in bad place until we know for sure.

All hope is not lost though. The Cash For Clunkers program from years ago did differentiate vehicle MSRP in this exact way - options, destination, etc. were excluded when calculating the $45K MSRP program limit.

 

[greenne]

CA and OR and at least a couple other states, perhaps all of them, do interpret their incentive rules in the way people are hoping. It's not simply imagination that leads people to that conclusion and may not be an unreasonable assumption.

NYS looks at the base MSRP for rebates so its not unreasonable to think the IRS *may* do the same.

As an aside, it pretty silly to expect the IRS to effectively enforce/audit a highly specialized number like MSRP. For vehicles on the edge of the cap, it could literally be whether a particular owner optioned "all terrain tires" vs "all season tires" that makes a $7500 difference(tax credit eligibility).

That's ridiculous and huge waste of manpower for the IRS to try to "enforce" such a standard..

However, as a faithful government employee I can say I would not be surprised either way-- oftentimes if it can be done easier or smarter it is NOT being done that way by government. Nothing surprises me anymore...

 

[shutterbug]

The fact remains that Congress established the EV tax rules to incentivize EV adoption.

Small point, but very important. Congress doesn't establish rules. It promulgates laws. It is agencies that write the rules on the basis of those laws. In this case congress said MSRP. The plain meaning of that is MSRP, not base price. Yes the Congress wants more EVs sold, but they also want more lower priced EVs and they also want the incentives going to people who are less wealthy.

if it somehow went rogue that Congress wouldn't have a mechanism to reign it in

In the first place, it's not going rogue by writing rules using plain meaning of the law. In the second place, if it did go rogue, the make up of congress for the next two years precludes Congress doing anything about it.

 

[shutterbug]

As an aside, it pretty silly to expect the IRS to effectively enforce/audit a highly specialized number like MSRP. For vehicles on the edge of the cap, it could literally be whether a particular owner optioned "all terrain tires" vs "all season tires" that makes a $7500 difference(tax credit eligibility).

IRS will not need to think about or consider individual options. They will just look at the single number that manufacturers provide for each VIN and compare it to the statutory limit.

 

[ExCivilian]

if it did go rogue, the make up of congress for the next two years precludes Congress doing anything about it.

Thankfully the President appoints who runs the IRS.

Again, not quite sure why we're caught up in all this pedantry. It feels more like an attempt to derail the conversation rather than further it so I'm going to have to respectfully bow out from this portion of the discussion.

 

[Maquis]

I have no idea why you continue to bang on this drum--I'm not suggesting the IRS will "create" incentives for EV adoption.

The fact remains that Congress established the EV tax rules to incentivize EV adoption. The IRS answers to Congress--is it's functional arm in collecting taxes--and will write/interpret the tax code in light of Congress' intent. If it doesn't, Congress will direct it to do so via a variety of mechanisms.

Hopefully I don't need to break out each individual House or list individual members of each building in order to have a constructive conversation. We can't agree that "Congress" entails all of those entities in common parlance?


You believe the Treasury Department and the IRS within it, both established by Congress, which itself has the power of the purse, doesn't answer to Congress and could somehow operate oppositional to Congress' intent without consequence?

https://www.whitehouse.gov/about-the-white-house/our-government/the-legislative-branch/

Various "reports" to Congress:
https://home.treasury.gov/policy-is...lateral-development-banks/reports-to-congress

https://home.treasury.gov/data/troubled-assets-relief-program/reports/monthly-report-to-congress

etc.

not sure why some want to go down this path of discussion as it's completely fruitless. If you genuinely think the IRS won't adopt/interpret rules in light of Congress' expressed intent (and that if it somehow went rogue that Congress wouldn't have a mechanism to reign it in) then yeah we're going to have to "agree to disagree." It's an even sillier conversation in light of the fact the President is currently aligned with those stated goals.

If you don’t think we should go down this path, why did you bring it up to begin with?

 

[mr.Magoo]

Personally I think the thought base price is wishful thinking...

Theres a reason why they chose MSRP instead of invoice, so to think that they'll let manufacturers play games with options when they won't let people play the same games with invoice value is... well... Wishful thinking.

 

[ExCivilian]

If you don’t think we should go down this path, why did you bring it up to begin with?

The overall conversation was valid but the excessive pedantry was derailing.

 

[TaxmanHog]

Aside from the OP concern that fewer orders are being converted because of lack of resources to build fully optioned trims lets wrap up this tangent, the untimely guidance from IRS will cause more hesitancy in the reservationists when the opportunity to place an order presents in the coming weeks and months.

 

[neririn]

Aside from the OP concern that fewer orders are being converted because of lack of resources to build fully optioned trims lets wrap up this tangent, the untimely guidance from IRS will cause more hesitancy in the reservationists when the opportunity to place an order presents in the coming weeks and months.

Wow this thread escalated quickly. Ha ha.

I think I'll go ahead and order if they have the ability to build the truck I actually want. Who knows what will happen between now and when it actually arrives. That said, I am a little confused. The email I was sent says I have until December 1st to order. The order site seems to indicate I can go back into the queue.

Has anyone extended their reservation? If so, how?

 

[TaxmanHog]

Wow this thread escalated quickly. Ha ha.

I think I'll go ahead and order if they have the ability to build the truck I actually want. Who knows what will happen between now and when it actually arrives. That said, I am a little confused. The email I was sent says I have until December 1st to order. The order site seems to indicate I can go back into the queue.

Has anyone extended their reservation? If so, how?

You might check with your selling dealership to see what they know about the 12/1 deadline.

I thought they could be left dormant until 8/31/2023, by then you need to make a choice or automatic cancelation, this was to accommodate potential extra XLT's that so many are clamoring for but not guaranteed or available at this moment.

No additional extensions are being allowed, and at the close of 2023 order banks & production, Ford will start taking brand new MY24 reservations/orders tied to up coming model E dealers.

 

[rdr854]

If there is any doubt and you really think MSRP should be the base price rather than the final price, then pay the income tax assuming no tax credit, but ask for the credit as a refund. That way, you have paid the tax up front and should be able to avoid any penalties and interest if you are wrong.

Of course, this presupposes that the IRS instructions and rules are not clear.

 

[Flashy McLightning]

Personally I think the thought base price is wishful thinking...

Theres a reason why they chose MSRP instead of invoice, so to think that they'll let manufacturers play games with options when they won't let people play the same games with invoice value is... well... Wishful thinking.

Invoice=MSRP

 

[tidemacedo]

I just got the email to order my 2nd Lightning and while good news for me, it can't be good news for Ford. My first reservation was placed right as the launch event started and I was one of the first. I received my invite in the MY22 2nd wave of invites. I've had my Lightning since June and LOVE it.

That said, when I realized my initial reservation position was really high, and that the order invite might come sooner than I could financially justify, I made a 2nd reservation. I made this 2nd reservation less than 3 hours before they shut down the reservations due to hitting 250,000 pre-orders.

How on earth could I already be up again? There is ZERO chance they have shipped 100,000 lightings, let alone the ~125,000 needed for my number to be up again with a poor 50% conversion rate.

Did tens of thousands of reservation holders bail once the full rebate wasn't available? Did most everyone want the Pro trim and cancel when they couldn't get it the way they wanted?

yeah, that’s crazy. I did my reservation on the second day after opening.Only got my invitation last October, put my order November 5th and got scheduled to build first week of December. Hopefully get it delivered still this year so I can get the federal refund. However, not too confident.

 

[tubby]

I went ahead and placed my order for a Lariat ER. After I placed the order I realized that I should be eligible for the full $7,500 tax credit since I have a contract before the new tax credit law goes into effect in 2023. Maybe that’s why that’s why Ford is sending out order invitations much earlier than expected so that as many people as possible will get into contracts before 2023.

I haven’t received a build date yet but I’m starting to believe that my actual build won’t be until later in 2023.

I do not like to bring unfortunate news, but the latest irs.gov link which I read in-depth and confirmed with my CPA is that you will not be eligible for the $7500 if your sticker price is above $80k. There are a few other specifics too, which involve single & married gross income, but the Lariat ER is now well above that $. We can just hope Congress changes this number to above $90k since the prices have increased so much for the batteries.

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