Extension of Federal EV Tax Credit with the New Congress?

[CarlK]

There were bills, some even introduced by Republicans, to extend the EV tax credit another few years for all auto manufactures. None has even passed the Republican controlled committee. This obviously is not of their interest or is their priority. Maybe there will be better chance that we might see things to happen now. In its current form the quota really punishes companies that took risks and invested money early to pave the way while rewards the rest that were sitting on the sidelines. Not to mention the two companies that will be reaching the quota, Tesla and GM, are both American companies. Hope this will happen.

 

[wdolson]

GM will be lobbying for it, but I'm not optimistic. The existing program barely survived last year's tax bill.

 

[boaterva]

Since the Senate hasn’t really changed, not sure how the chances have. And I don’t think there are any omnibus bills to bury it in...

 

[HankLloydRight]

In its current form the quota really punishes companies that took risks and invested money early to pave the way while rewards the rest that were sitting on the sidelines.

But it already rewarded Tesla and GM for taking those risks in the form of the tax credits for the first 200,000 cars sold. The purpose of the tax credits was to spur innovation, not reward companies once they're profitable and market leaders.

As-is the tax credit did it's job fully for Tesla. I personally see no reason for taxpayers to continue to feel the burden of more tax credits just because it's Tesla and we love Tesla and Tesla should get all the good stuff. No, let the tax credits stand to spur more innovation/competition in the EV market with new and up and coming players to give them a competitive advantage. Tesla does not need that now at the expense of the US Taxpayers.

As Elon Musk has said:

"If we're all in a ship together and the ship has some holes in it, and we're sort of bailing water out of it, and we have a great design for a bucket, then even if we're bailing out way better than everyone else, we should probably still share the bucket design."

I know that's with respect to releasing the patents, but really, isn't the goal for worldwide sustainable energy and transport?

 

[CarlK]

But it already rewarded Tesla and GM for taking those risks in the form of the tax credits for the first 200,000 cars sold. The purpose of the tax credits was to spur innovation, not reward companies once they're profitable and market leaders.

As-is the tax credit did it's job fully for Tesla. I personally see no reason for taxpayers to continue to feel the burden of more tax credits just because it's Tesla and we love Tesla and Tesla should get all the good stuff. No, let the tax credits stand to spur more innovation/competition in the EV market with new and up and coming players to give them a competitive advantage. Tesla does not need that now at the expense of the US Taxpayers.

As Elon Musk has said:


I know that's with respect to releasing the patents, but really, isn't the goal for worldwide sustainable energy and transport?

Agreed that it has already rewarded Tesla for taking the risk. Don't even want to argue if tax money should be used, even though I do think, considering its benefit to the society and the country, this is far better use of tax money compares to many other things we do. Continue the incentive will help more innovation and risk taking for what it not even 1% accomplished.

The bottom line is still this quota is not fair since it punishes the trailblazer and rewards those who did not contribute. Regardless if it gets extended at least it should end for everyone at the same time whether it's three years from now or today.

 

[HankLloydRight]

since it punishes the trailblazer

How is it punishing the trailblazer? The trailblazers have already reaped the benefit of the tax credit for 200,000 cars each over the last several years. The incentive to spur innovation has succeeded and both companies are now past the R&D phase and are making hundreds of thousands of cars, and at a profit. I don't see how that' a punishment because they reached the end of the quota after benefiting for so many years.

and rewards those who did not contribute.

How is it rewarding those who did not contribute? Any other EV car maker still has to design, manufacture, and sell a car to get the benefit. There are no rewards unless they actually contribute, which means investing hundreds of millions of dollars first.

Regardless if it gets extended at least it should end for everyone at the same time whether it's three years from now or today.

So a new EV upstart that spends that kind of money over two years, and sells one car before the tax credit expires in three years -- that's fair? Not all EV companies are on the same development timeline.

 

[CarlK]

Those late comers are forced to do it only because of Tesla. The only risk they have now is NOT to do it. If Tesla slows down or even failed none of them would take any risks on EV and will continue to sell as many high margin ICE cars as they possibly could. I'm only talking about those big boys. New companies certainly deserve help but it's pretty obvious now this is a tough business you can't expect any new company to make a dent. Tesla is an unique exception we probably will not see another one in our lifetime.

 

[HankLloydRight]

Those late comers are forced to do it only because of Tesla.

Forced? Maybe they've accelerated their R&D and development due to Tesla's lead, but they've been developing EVs for quite a while now and will continue to do so. There's only so much oil in the ground, and when that dries up, whoever is in the lead for EVs will thrive. All the major car companies know this, but it's like turning the Titanic.. companies that can turn faster (or just fast enough) will avoid the iceberg. The rest will sink.

The only risk they have now is NOT to do it.

There are a lot more risks than that.

t it's pretty obvious now this is a tough business you can't expect any new company to make a dent.

And that's what they said about Tesla. And Tucker. And Delorean. All these companies made "dents" in automotive history.

Tesla is an unique exception we probably will not see another one in our lifetime.

Disagree. There will always be automotive upstarts. Most will fail, but some will succeed. And even if that's true, that should entitle Tesla to reap continued benefit from the tax credits? I'm not following.

 

[Kichwas]

Musk noted in his interview on recode decode that history has only seen two automakers that have not failed. Ford and Tesla. Every other company out there only exists because at some point a government stepped in to give all it’s billionaires a ton more money and not make them have to fix their own mess like Tesla had to do this year...

So future innovatiors coming in are not really that likely unless they get treated a lot better than Musk got...

 

[wdolson]

Musk noted in his interview on recode decode that history has only seen two automakers that have not failed. Ford and Tesla. Every other company out there only exists because at some point a government stepped in to give all it’s billionaires a ton more money and not make them have to fix their own mess like Tesla had to do this year...

So future innovatiors coming in are not really that likely unless they get treated a lot better than Musk got...

I think he said Tesla and Ford are the only two that didn't go bankrupt. After the economic collapse every existing car maker got some help from the government. Tesla and Ford got loans. Tesla's was small and they paid it back early. Ford is still paying on theirs.

One of the criticisms the haters like to heap on Tesla is that Tesla only exists thanks to government handouts. Not true, but if Tesla is able to make it without tax credits for sales when all their competition have them, that kills their argument. People will still make it because they're ignorant, but it will be easily refuted.

In the market place Tesla will be at a bit of a disadvantage with no incentive left and the competition has them. Someone cross hopping an EV from Audi or Jaguar with Tesla would find a $7500 tax credit for the competition's vehicles, but not on the Tesla. That will drive some sales to the competition. However Tesla has a superior product where it counts (range and infrastructure) and more proven designs. The Model 3 with no incentives will likely be selling for about the same price as similar vehicles with incentives.

Tesla has rumored the new S and X will come out late next year, close to the time the incentive runs out entirely. As part of the refresh they could announce new prices that happen to be about $7-$8K less than current prices, but because the cars will be different, it won't be possible to make an exact comparison.

 

[CarlK]

Forced?

Yes forced. This is why.

http://redgreenandblue.org/2018/09/17/11-charts-show-tesla-trashing-legacy-automakers/

 

[HankLloydRight]

Yes forced. This is why.

http://redgreenandblue.org/2018/09/17/11-charts-show-tesla-trashing-legacy-automakers/

So Tesla is successful.

Not sure where you get "forced" out of that.

Like I said, any ICE business that doesn't see the tide turning is destined to fail. Tesla or no Tesla.

 

[CarlK]

So Tesla is successful.

Not sure where you get "forced" out of that.

Like I said, any ICE business that doesn't see the tide turning is destined to fail. Tesla or no Tesla.

Take Tesla out of those charts do you think they still see the tide turning?

 

[HankLloydRight]

Take Tesla out of those charts do you think they still see the tide turning?

Yes, but maybe not as fast. But I'm not seeing "forced" I would call it accelerated competition. You said "Those late comers are forced to do it only because of Tesla.".. I'm saying it's not only because of Tesla. There are many other factors. Maybe the late-comers making moves because the other big players are starting to innovate, not just Tesla.

 

[CarlK]

Some new development today.

Tesla Joins GM, Nissan to Press for Extended Electric Car Credit

Again it should be available, or end, at the same time for all auto companies. You lose it if you decide not to join. It's only fair.

 

[cpa]

Some new development today.

Tesla Joins GM, Nissan to Press for Extended Electric Car Credit

Again it should be available, or end, at the same time for all auto companies. You lose it if you decide not to join. It's only fair.

I am not arguing with you. But who ever said that the Congress of the United States of America and their pet projects that get implemented through the Internal Revenue Code was ever fair? I have been doing this for forty years.

 

[Magellan55]

Tesla might be quietly lowering prices in anticipation of the tax credit going away, at least on S/X. I bought a S100D this summer for $112k list (red+cream+PUP+EAP); 5 months later that same config now costs only $105k. The only thing I got that a new owner won't is free supercharging, which I haven't even used yet. Oh, I get free lifetime LTE too, so maybe that's worth what, $2000?

 

[voyager]

How are Tesla sales in the U.S. going since Tesla hit its 200,000 EVs tax credit ceiling?
Are Americans still entitled to a tax credit? Do individual states take care of that?

 

[wdolson]

How are Tesla sales in the U.S. going since Tesla hit its 200,000 EVs tax credit ceiling?
Are Americans still entitled to a tax credit? Do individual states take care of that?

Strong. The Model 3 is one of the best selling cars in the US and both Model S and X sales are up from last year. This site tracks US sales:
Monthly Plug-In Sales Scorecard

The early months of a quarter have lower S/X sales than the end because they make the export cars the first 6 weeks of a quarter and concentrate on domestic at the end.

 

[Big Dog]

How are Tesla sales in the U.S. going since Tesla hit its 200,000 EVs tax credit ceiling?
Are Americans still entitled to a tax credit? Do individual states take care of that?

To be clear, the full tax credit is still available for all deliveries through Dec 31, so any drop off as a result of the reduced tax credit won't be realized until next year.