$7500 Tax Credit

[Curt Renz]

NY Times/CNBC: yesterday & today: Electric vehicle tax credit survives, but GM and Tesla aren’t cheering

This morning I wrote the three people who represent me in Congress. I asked them to either enact a universal ending date for the credit, or a cap on the total number of electric cars purchased by Americans. Otherwise, it is the American buyers of foreign cars who will receive most of the remaining benefits, to the detriment of Tesla buyers after the current 200,000-car limit per manufacturer is hit. You too may want to write those who represent you in Congress.

 

[comanchepilot]

There should not BE a subsidy at all - its not up to the government to pick a preferred method of fueling a vehicle.

 

[ItsNotAboutTheMoney]

There should not BE a subsidy at all - its not up to the government to pick a preferred method of fueling a vehicle.

Well, it would be nice if people were very altruistic, but they aren't, so it's a responsibility of the government to try to limit the harm caused to society by the actions of individuals. It's economic and social pragmatism

 

[miimura]

I disagree with the first two posts above. AFAIK, the original intent of the tax credit was to help all manufacturers develop plug-in vehicles and reach economies of scale such that they would be competitive with traditional ICE vehicles after the credit was phased out. Clearly Tesla is reaching that point and there is no good reason to continue to give their buyers tax credits beyond the original 200,000 allotment and phase-out. Now, if you want to punish the manufacturers that have been dragging their feet, that's fair. However, I firmly believe that this kind of scheme needs to have some future visibility. Clearly the abrupt end proposed by Republicans at the end of 2017 was not the right approach. One scheme I can think of would be an early phase out. For example, all tax credits will phase out to 50% in 1Q2020 and 25% in 3Q2020 regardless of any remaining production quota per manufacturer. Manufacturers that reach their quota prior to that date will phase out according to the original rules. That seems reasonable to me.

 

[comanchepilot]

Well, it would be nice if people were very altruistic, but they aren't, so it's a responsibility of the government to try to limit the harm caused to society by the actions of individuals. It's economic and social pragmatism

what does a cash payment have to do with 'limiting the harm caused to society by the actions of individuals?"

You want a climate debate - lets have it. But thats not my point.

You want to encourage the design of EV's - do it like that do in Calif. Can't sell an ICE car without having EVs for sale.

Incentives end up giving wealthy money. It has always worked that way because no one EVER designs a bare bones EV because they don't have to because of a $10k incentive.

My wife has a momentarily expiring lease on a MB Class B. They took a $22k vehicle [ in Europe] and turned it into a $50k vehicle in the US because they could with $10k of incentives. We had a $325 monthly lease payment for a Benz. People thought we were nuts when we said how much the car cost us.

Now because MB did not create a viable EV - they instead created an EV to continue selling cars in Calif - there is nothing available.

Have you looked at the ugliest car on the planet? The BMW i3?

do manufacturers think that EV buyers want to be tortured? Prius? Double ugly?

Why can't an EV be attractive, cost only a few $$$ more than an ICE car and have decent range?

Give me a pick up or a sports car - why is everything EV ugly or a sedan?

 

[hacer]

what does a cash payment have to do with 'limiting the harm caused to society by the actions of individuals?"

You want a climate debate - lets have it. But thats not my point.

You want to encourage the design of EV's - do it like that do in Calif. Can't sell an ICE car without having EVs for sale.

Incentives end up giving wealthy money. It has always worked that way because no one EVER designs a bare bones EV because they don't have to because of a $10k incentive.

My wife has a momentarily expiring lease on a MB Class B. They took a $22k vehicle [ in Europe] and turned it into a $50k vehicle in the US because they could with $10k of incentives. We had a $325 monthly lease payment for a Benz. People thought we were nuts when we said how much the car cost us.

Now because MB did not create a viable EV - they instead created an EV to continue selling cars in Calif - there is nothing available.

Have you looked at the ugliest car on the planet? The BMW i3?

do manufacturers think that EV buyers want to be tortured? Prius? Double ugly?

Why can't an EV be attractive, cost only a few $$$ more than an ICE car and have decent range?

Give me a pick up or a sports car - why is everything EV ugly or a sedan?

The original intent of the subsidy was too almost level the playing field compared to gas powered vehicles. At the time the present-value of the tax credits given to oil companies amortized over the life of all gas vehicles worked out to ~$10k/vehicle. So they set the credit at 3/4 of that. Still today ice vehicles get an effective fuel subsidy of more than $10k over vehicle life with direct tax credits to the oil companies.

Those subsidies should be terminated but that's not going to happen any time soon.

 

[3mp_kwh]

Bush signed the tax-credit as part of an "energy independence" effort. Those were the mutually accepted politics, at the time.

I really don't think it matters much, if the credit doesn't get killed. Weak-sauce PHEVs count against the 200k limit. The makers of these cars choose a strategy not to materially compete with BEVs. They feel they have more to gain by wasting the credits, than by beating Tesla.