Potential future EV credit changes [NO POLITICS]

[Pioneer74]

Here is a summary of the bill from another site. Looks like our discussion here missed the assembly point and battery material location provisions.


New Vehicle Credit

1. Manufacturer caps eliminated. (Page 370, line 15)
2. Credit applies for vehicles purchased beginning January 1, 2023. (Page 386, line 1).
3. Transition provision for EVs with written sales orders dated in 2022 but delivered in 2023 allows purchaser to claim the “old” credit in 2023. (Page 386, line 20).
4. Vehicle must be assembled in North America to qualify for new credit. (Page 366, line 15).
5. North American assembly requirement applies to vehicles assembled after the date of adoption of the bill. (Page 386, line 3)
6. $7,500 credit is broke into two binary pieces meaning the vehicle either qualifies for each piece of the credit or it doesn’t. No longer based on size of battery. (Page 366, line 6)
7. $3,750 of the new credit is based upon the vehicle having at least 40% of its battery critical minerals from the United States or countries with a free trade agreement with the United States. This is a list of countries with free trade agreements with the US.(Page 371)
8. The other $3,750 of the new credit is based on at least 50% of the battery components of the vehicle coming from the United States or countries with a free trade agreement with the US. (Page 372, line 13)
9. The 40% minerals requirement increases to 50% in 2024, 60% in 2025, 70% in 2026 and 80% in 2027. (page 371 line 23)
10. The 50% battery components requirement increases to 60% in 2024, 70% in 2026, 80% in 2027, 90% in 2028 and 100% in 2029. (Page line 373)
11. The government has until the end of the year to develop guidance on the battery requirements. (Page 374)
12. Beginning in 2025, any vehicle with battery minerals or components from a foreign entity of concern are excluded from the tax credit. (Page 374, line 20).
13. One credit per vehicle. (Page 375, line 12)
14. Modified gross income limit of $150k for individuals, $225k for head of household, and $300k for joint returns. Definition of MAGI (page 375, line 22)
15. MSRP of vehicle must be $80k or less for SUVs, Vans and Trucks. $55k for all other vehicles. (Page 377, line 4)
16. Dealer can apply credit at time of sale. Dealer must disclose to buyer the MSRP of the vehicle, the applicable tax credit amount and the amount of any other available incentive applicable to the purchase. (Page 378, line 6)
17. Credit terminates December 31, 2032.

Used Vehicle Credit

1. Tax credit of 30% of value of used EV with $4,000 cap (Page 387, line 23).
2. Used vehicle must be at least two model years old at time of sale. (Page 389, line 7).
3. The original use of the vehicle must have occurred with an individual other than the one claiming the used tax credit. (Page 389, line 10).
4. Used vehicle must be purchased from a dealer. (Page 390, line 3).
5. Used vehicle price must be $25k or less. (Page 390, line 5).
6. Used vehicle qualifies for tax credit only once in its lifetime. (Page 390, line 7)
7. Purchaser must be an individual (no businesses) to qualify for used credit. (Page 390, line 14).
8. Purchaser may only claim one used vehicle credit per three years. (Page 390, line 20).
9. Modified gross income cap of $75k for individuals, $112,500 for head of household and $150k for joint returns. (Page 388).
10. Credit may be applied at time of sale by dealer. (Page 391, line 15).
11. Credit terminates on December 31, 2032. (Page 391, line 12).

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[greenne]

One other thing not covered in summary...is this now considered a refundable credit? I would HOPE that it would be. *IF* not refundable, what would happen if the dealer gave you the $7500 off the price at time of purchase and then you don't have enough liability? Would the IRS then expect you to pay the difference back to them upon filing your tax return. That would be cruel.

My opinion-- the biggest issue with the currant EV credit is the need for $7500 liability. Maybe not applicable under most cases with the Lightning, but a lot of chevy Bolt buyers(or even id4 buyers) are not going to have $7500 liability in any one one tax year.

 

[FordLightningMan]

I still think the $80k cap is absurd and so is the $300k income eligibility cap. Also one step forward with a $4k used EV credit, then two steps backwards with a $25k cap on used EVs. With Leaf and Bolt going away, there won't be any vehicles produced that sell in the sub-$25k used EV sector for years. Good thing the family with a $300k income (96th percentile) can get a rebate, where people in lower incomes are still shut out. And let's not forget there is still a waiting list for all of these vehicles, rich get richer.

 

[Sklith]

If the cap's $80k at least make it have diminishing returns above that amount, say up to $100k or something. Would suck to have to decide against a $500 option just because you'd lose $7,500.

 

[Gerrard155]

A January-delivered 2023 Chevy Bolt EUV sure looks good, if they don't raise the price.
(And, if the legislation is enacted)

Already been encouraging my mom to get one of these, this just makes it that much better. IF this passes, that means that $20K EV’s are officially here.

 

[greenne]

Already been encouraging my mom to get one of these, this just makes it that much better. IF this passes, that means that $20K EV’s are officially here.

The 2023 Bolt is already STEAL at a price of $26k-30k MSRP. Add a $7500 rebate and you very well could get one for under $20k.

 

[watchdoc]

Based on this new "battery materials requirement", I wonder what vechicles WONT qualify for the tax credit. I don't see how any automaker (aside from Tesla) would be able to sell an EV without the credit going forward. I'm glad this will open up EV's to more people whom otherwise wouldn't buy one (because they wouldn't have the tax liability to justify the purchase) BUT I think this is just going to give automakers an excuse to raise prices and generally gouge buyers or worse, push out crappy EV's with small batteries.

Toyota stands to really benefit if their excellent plug in hybrids qualify for the full credit.

 

[astricklin]

Surely folks buying a 80-120k truck have HHI income exceeding $300k. Even the 800k was pushing it

If I doubled my income(not improbable as my spouse is currently not working) I could very easily afford an $80-100k vehicle and still be well under the $300k income limit. If I made 300k a year and and all my other expenses stayed the same (based on my current income as they are). I could buy my 2023 model cash, easily, even if I only started saving for it today.

I guess my point is, don't assume people's financial situation and what they can or cannot afford.

 

[O’Majestic1’slightnigF150]

Being a buyer who drives and owns vehicles for decades, I’m starting to get concerned about my decision to purchase a Platinum level truck. Might be worth holding off a couple years or reordering a ‘23 L to be able to take advantage of the potential new laws and till the FCSP issues are resolved, 12v battery issues and HVJB’s are behind us and I can get 18’s or 20’s and the one feature I upgraded to platinum for, multi contour seats. Our ‘20 Limited Superduty sure is easy on my getting older bones.

 

[bryan995]

If I doubled my income(not improbable as my spouse is currently not working) I could very easily afford an $80-100k vehicle and still be well under the $300k income limit. If I made 300k a year and and all my other expenses stayed the same (based on my current income as they are). I could buy my 2023 model cash, easily, even if I only started saving for it today.

I guess my point is, don't assume people's financial situation and what they can or cannot afford.

By all means you do you.

Folks have looked at this before. Using tesla as an example... check out the model X sale price + average owner income.

 

[Lightning_Bob]

Already been encouraging my mom to get one of these, this just makes it that much better. IF this passes, that means that $20K EV’s are officially here.

...and if one lived in Illinois that Bolt EV would be $16K:
https://www2.illinois.gov/epa/topics/ceja/Pages/default.aspx

For folks that are able to charge at home, this should be a no brainer compared to a Kia Rio, Hyundai Accent, etc....

 

[astricklin]

By all means you do you.

Folks have looked at this before. Using tesla as an example... check out the model X sale price + average owner income.

It would be nice to have a date on that chart because I'm pretty sure the average selling price has increased quite a bit recently.
Also is this showing average, mean, or median?
Also this shows that the model S sells in the $90k range, but has buyers making less than $300k. Tesla doesn't publish the exact numbers, but I'd wager that the S outsells the X by a good margin. And only something around 5% of Tesla sales are s/x.

 

[greenne]

By all means you do you.

Folks have looked at this before. Using tesla as an example... check out the model X sale price + average owner income.

Not to dive into politics but I think the whole point is to convince people to buy a Bolt, ID4, Ioniq 5, etc vs the ICE vehicles. It wasn't geared towards higher income Tesla folks. Lets be real, most people buying Teslas (with income as you pointed out above $100k) aren't gonna feel the effect of a $7500 credit(or rebate) as someone with a $50, 60, or 70k income would feel it.

I have yet to find a person that said they wouldn't buy a Tesla if they didn't get the EV tax credit, I bet I can find several that would buy a Bolt or a ID4 (vs a Corolla, CrV, Rav4, etc) based upon the credit and prices being roughly equal to ICE.

Also I'd be careful comparing the amount a person can spend vs Income vs taxable income(which is the basis for the tax credit). 3 very different things.

- Maybe the person has savings or an inheritance
- Maybe the person is smart with money and has tax free investments, etc
- Maybe the person has non taxable income-- VA benefits, proceeds from a home sale, certain pensions, etc.

 

[Theo1000]

Damn, whats with the lowering income limit and the 80k limit.

Other that that it looks really complicated compared to the past credit which is very easy to read and understand. Needs tax person to figure your number out!!

Suks! as I need to get another vehicle next year. Wait list means I can't get it this year.

 

[Chuin]

Damn, whats with the lowering income limit and the 80k limit.

Other that that it looks really complicated compared to the past credit which is very easy to read and understand. Needs tax person to figure your number out!!

Suks! as I need to get another vehicle next year. Wait list means I can't get it this year.

To make this even more confusing and complicated for anyone doing Solar this year also.

https://pv-magazine-usa.com/2022/07/28/solar-investment-tax-credit-to-be-extended-10-years-at-30/

Looks like an increase on the write off for solar. But if I understand it may not roll over to later years if you don’t get full credit taken in one year

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