California Considering Making Electric Cars Cheaper at the Dealership

[voyager]

Federal tax credits for electric vehicles won't last forever, especially under the Trump administration. While it's difficult to quantify exactly how many people saw the $7,500 rebate as the deciding factor to "go green," there is little doubt that it factored into the final purchasing choice of some buyers. California is considering a bill that would provide discounts to EV shoppers at the time of purchase, essentially reducing the sticker price before the car even leaves the lot.

California Considering Making Electric Cars Cheaper at the Dealership

 

[EV-lutioin]

On the surface this seems like a good idea, move the rebate to the front of the transaction so that EV's are cheaper by comparison at the dealer. However, I'm not sure I trust the dealers....what's going to stop the dealer from jacking up the price by the same amount as the rebate so they can recoup some or all of the rebate for themselves.

 

[four-walling]

On the surface this seems like a good idea, move the rebate to the front of the transaction so that EV's are cheaper by comparison at the dealer. However, I'm not sure I trust the dealers....what's going to stop the dealer from jacking up the price by the same amount as the rebate so they can recoup some or all of the rebate for themselves.

Desirable ICE cars have had addendums forever...why not EV's?

 

[SageBrush]

On the surface this seems like a good idea, move the rebate to the front of the transaction so that EV's are cheaper by comparison at the dealer. However, I'm not sure I trust the dealers....what's going to stop the dealer from jacking up the price by the same amount as the rebate so they can recoup some or all of the rebate for themselves.

The same thing that prevented dealerships from jacking up the price of the car based on the eventual rebate the consumer receives at tax time: Nothing

Except the fact that the rebate is not universal -- in either case.

 

[BluestarE3]

On the surface this seems like a good idea, move the rebate to the front of the transaction so that EV's are cheaper by comparison at the dealer. However, I'm not sure I trust the dealers....what's going to stop the dealer from jacking up the price by the same amount as the rebate so they can recoup some or all of the rebate for themselves.

Well, competition should help deter that type of predatory pricing. If a dealership for a manufacturer of existing EVs jacks up the price to take advantage of the point-of-sale rebate, consumers will go to a different dealership that hasn't raised prices. If all dealers for a given brand in California collude to jack up their prices for an EV, buyers can shop at an out-of-state dealer where the rebate doesn't exist, or buy another brand of EV whose dealers don't do that.

It'll be interesting to see if this legislation passes, when it will take effect and how much the rebate will be. This may have some bearing on when some California Model 3 reservation holders will want their cars. Ideally, it would be after the California rebate takes effect, but before the Federal tax credit starts winding down.

 

[SageBrush]

I've read economic analyses in the past that estimate on average 50% of a consumer rebate gets siphoned off by middle-men. I'm not saying it would happen here, only that it would be typical.

 

[BluestarE3]

I've read economic analyses in the past that estimate on average 50% of a consumer rebate gets siphoned off by middle-men. I'm not saying it would happen here, only that it would be typical.

All the more reason, then, to buy a Tesla and avoid the middleman.

 

[miimura]

So, if the state implements the rebate in the dealer transaction, will you have to pay sales tax on the full amount before the rebate? You do for the Federal Tax Credit, even if it's passed through to you in a lease. Since the existing CVRP rebate is after-the-fact, you've also paid sales tax on that too. The State should exempt any incentive in the sales contract from sales tax.