How does the EV tax credit work for the model Y?

[dino007]

I think after march its just the model 3 RWD that wouldn’t fully qualify cause its an lfp battery that it’s completely sourced from outside of the country?

MYLR M3LR and M3P should still be the full 7500 IF price stays the same

I mean worse case scenario if prices stay as is they all just half qualify after march i suppose if the battery requirements affect all models

 

[theothertom]

I think personally this is more so true after Elon met with the administration on Friday.

Elon has previously said that tax credits aren't necessary for EVs.

Regarding the ruling, Manchin is making waves to not gut the bill, especially the battery materials part. My *guess* is that the IRS *might* give manufacturers leeway until the end of the year to get their reporting in order, but after that the battery material clause will go into effect.

A wild card is that other countries are pushing back saying that the law violates current free trade agreements.
So bottom line, who knows?

 

[patmurphey]

...A wild card is that other countries are pushing back saying that the law violates current free trade agreements...

They don't mention the last few years while they were getting unrestricted $7,500 credits while Tesla was not...

 

[N8Howell33]

I think after march its just the model 3 RWD that wouldn’t fully qualify cause its an lfp battery that it’s completely sourced from outside of the country?

MYLR M3LR and M3P should still be the full 7500 IF price stays the same

I mean worse case scenario if prices stay as is they all just half qualify after march i suppose if the battery requirements affect all models

I would be shocked if base Model Y doesn't fully qualify. Tesla is the most american made car EV or not. I assume this applies to battery sourcing as well.

 

[240vPlug]

Unless something changes it looks to me like the credit will be halved based on the language. Battery materials sourcing would disqualify them from half the credit. I believe Tesla knows this which is why they gave an incentive last year starting at $3,750. Once they realized the IRS was going to delay until March they increased it to $7,500.

A couple of things could happen:

1) Tesla changes their suppliers and meets sourcing requirements...gets full credit
2) IRS delays sourcing requirements until next year or later this year.
3) credit is halved and Tesla gives incentive of $3,750
4) credit is halved and neither Tesla or the IRS does anything.

 

[patmurphey]

I believe that the Treasury department has until 2024 to make a determination of compliance with the sourcing requirements by various manufactures, could be later if it proves difficult. It is, therefore, possible that the credit could remain $7,500 for batteries manufactured under the rules until final determination.

 

[theothertom]

I assume this applies to battery sourcing as well.

I don't think any manufacturer gets cobalt from the US or one of its free trade partners. According to my understanding, that disqualifies ALL manufacturers from the full credit.
We'll have to wait to see how the IRS rules in March, but I'm not hopeful.

 

[EVforme34]

What if you are purchasing a vehicle with your parent? You are over the income requirement but your parent qualifies for the $7500 rebate. Would they be able to claim the full $7500 on their tax return as long as your are both on the title of the vehicle?

 

[240vPlug]

What if you are purchasing a vehicle with your parent? You are over the income requirement but your parent qualifies for the $7500 rebate. Would they be able to claim the full $7500 on their tax return as long as your are both on the title of the vehicle?

If they purchase the vehicle they should be able to claim the credit. It's not a "rebate" though. It's important to note this. You have to have a tax liability of $7,500 or greater to see the full benefit of the credit.

As far as the sourcing I think that's a tough one for sure. I have read there is a lithium mine opening up here in the US. I don't know of any that qualify under those requirements either.

Under the current credit Hyundai/Kia don't qualify for anything since the Ioniq 5 and EV6 are built in Korea.

I don't think anyone should bank on the tax credit. I'm sure automakers will try to adjust but the tax credit the way it is right now is not that good. If the government wants to incentivise EV they need to do a POS credit. Take it right off the price of the car before you finance it. Makes it much easier for the consumer.

This new credit is so complicated the IRS can't even figure it out. Doesn't instill confidence that one will receive the credit at tax time.

 

[N8Howell33]

I don't think any manufacturer gets cobalt from the US or one of its free trade partners. According to my understanding, that disqualifies ALL manufacturers from the full credit.
We'll have to wait to see how the IRS rules in March, but I'm not hopeful.

good point, I guess we will see

 

[patmurphey]

I don't think any manufacturer gets cobalt from the US or one of its free trade partners. According to my understanding, that disqualifies ALL manufacturers from the full credit.
We'll have to wait to see how the IRS rules in March, but I'm not hopeful.

The raw material requirements are phased in with value percentages. The full credit might be easily reached with 100% foreign cobalt. At any rate the Treasury has until 2024 for the raw material provision determinations, separate from the March battery ruling.