Certainly makes sense due to the number of passengers.
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IRS weighs in on tax rebate, mostly bad news for Model Y
- Thread starter Hookemhorns
- Start date
Even 55k is too high a limit. We need to force car manufacturers to produce electric vehicles at near gas equivalent in terms of total cost of ownership. An EV sedan could be around $10k more expensive than an equivalent ICE sedan, and likewise for SUVs. $40k for a car and $50k for a (real) SUV would allow the average consumer to comfortably adopt electric.
ElectroCat
Member
The same sentiment here. My Model Y was the most expensive vehicle I've ever purchased. And while I could see myself reaching a little bit more for an MYP at the right price.. I don't ever see myself paying more than $60K for a vehicle. The idea of buying a $70K or $80K Model Y.. just doesn't even compute in my brain.
We also have to be realistic about EV adoption. If the idea is to get most people to give up their ICE for EVs over the next 10-15 years.. then it's not going to happen with $55K sedans or $80K SUVs. Most people I know either have never purchased a new vehicle.. or if they did we are talking about $30-$40K range. With gas prices back down to very reasonable amounts.. I just don't ever see the average consumer switching to an EV.. at current pricing levels. They might as well be giving those $7,500 rebates on new Range Rovers and Bentleys.
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ucmndd
Well-Known Member
The average new car transaction price in 2022 was ~$48,000, so I'd argue $55k is almost exactly correct to achieve equivalency after a $7500 tax credit (to say nothing of additional benefits like fuel cost and maintenance).
Snow Drift
[Off-Road Assist] Activated
Until it’s a POS reduction, the credit will seem out of reach to your average buyer. Making someone wait for a refund, which they won’t understand, isn’t going to work.
Yes, of course they can lease and get it right away. If they understand that.
While I agree the new car price has risen tremendously in general, I think that's also a bubble that's going to pop. Especially with the rising interest rates. We simply cannot continue this trend of many people having $1,000 monthly car payments until something bad happens:
More People Had $1,000 Car Payments in 2022 Than We've Seen in a Decade
The number of people paying over a grand a month for their car rose to nearly 16 percent at the end of the year.
jalopnik.com
If these numbers are right.. almost 20% of vehicle trade-ins are currently underwater on their loans. This means a lot of people are taking bad decisions.. and trading them in for even worst decisions.
Not just that, but until it's a POS reduction, most folks will need to finance/pay interest on the $7500 they hope to recoup at the end of year (about $2K in interest alone over a standard loan term - assuming no early payments and whatnot.)
SageBrush
REJECT Fascism
Perhaps correct, but fairly useless without context. Trend lines over a decade, corrected for inflation, would show a useful picture.
Jalopnik is a propaganda rag
This figure likely includes a lot of commercial vehicles. To make an apples to apples comparison, we ought to look at prices of electric sedans vs ICE sedans, electric SUVs vs ICE SUVs, etc. Most consumers don't pay anywhere wear 48k for a vehicle.
What confuses me is the subsidy for hybrid vehicles. Pure electric vehicles are more costly to build and are better for the environment but get the same subsidy. The likely outcome of the currently structured tax credit is the proliferation of hybrid vehicles and the slowdown of fully electric vehicles.
Given the price differences between PHEVs and EVs, and limited selection of EVs under $50K, I would be surprised if people are cross-shopping the two. A Ford Escape PHEV is around $38K (before any tax credit); not too far off the ICE price and still 20% cheaper than the closest EV SUV (the ID4.) With gas prices dropping, interest rates rising, recession etc etc., its gonna be hard for folks to justify spending an extra $20-30K on a BEV (not including difficulties and costs setting up L2 charging at home.) It seems like a decent middle ground until the cheaper options come as PHEVs can handle a lot of daily driving in full electric.
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BitJam
Active Member
It's very unfortunate that the government is subsidizing PHEVs. They are the worst of both worlds. People are going to buy PHEVs "now" instead of waiting a year or two to buy a BEV. IMO the purpose of this was to help out the troubled traditional automakers who are having a hard time transitioning to BEVs. They'll throw a small battery and motor onto an ICE vehicle, get the subsidy, sell a ton of them and delay bankruptcy for a few years. The sad thing is this will also delay the automakers' transitions to making BEVs and delay our transition to a sustainable future.
I agree with you that this is a no-brainer from a consumer's perspective. The subsidy will make it irresistible financially and will fool people into thinking they are helping sustainability.
ucmndd
Well-Known Member
Given the significantly constrained availability of raw materials for batteries during a period of transition, is it more sustainable to put one long range Model Y on the road or five PHEVs?
This is not as easy a question to answer as you pretend it is.
ZenRockGarden
Active Member
While car prices have increased so has most everything including wages. Did anyone imagine you could earn $22 an hour as an Apple Store host, or $18 at McDonalds? Yes EV’s are absolutely expensive and no not Everyone will be able to jump in but in time as they improve the values will go up and likely the price will lower. Many do however need to remember it’s Not the cost to buy, it’s the cost to Own a car. And Anyone that thinks the cost of gas won’t be an issue again is kidding themselves let alone miraculously not contributing to destroy our planet for our future.
BitJam
Active Member
Battery material supplies are ramping up rapidly. My concern is people buying a PHEV due to the EV tax credit and then regretting that decision in just a few years, well under the lifetime of the car. It's more sustainable for people to wait a couple of years so they can buy a BEV instead of buying a PHEV now. Either those PHEVs won't see a full life or they will delay the adoption of BEVs for many people by 5 or 10 years.
We should be phasing out PHEVs, not spiking their production and consumption. If the majority of the EV tax credit money goes towards PHEVs, it will be a colossal waste and possibly an ecological disaster if people feel they need to scrap/ditch their PHEVs in well under half the expected lifetime.
As Tony Seba predicted and then explained the price of batteries continues to fall exponentially and the price of renewable electricity is also falling rapidly. Most people are probably unaware of these trends and many will be duped into buying a PHEV now when it would be better for them and for the planet to wait a few years. The environmental cost of building a new car is massive. Duping people into buying new cars they will regret buying/owning in just a couple of years is a giant waste.
It's counterproductive to make a huge investment in old technology that has a 10+ year lifespan when a more affordable new technology is just a few years away. At some point it will make sense for people to default on their PHEV loan, let the car get repoed, and buy a cheaper BEV instead. It would be smart to minimize the number of people put into this situation, not maximize it.
SageBrush
REJECT Fascism
I agree it is difficult, but only because it is very unclear how much the PHEV battery will be used. The European experience was/is poor. This problem is doubly true when other perks are also in play. E.g. in CA, so-called ALT vehicles gained popularity as a way to use the HOV highway lanes. Driving on electricity was a lesser -- sometimes nil -- consideration. So take a PHEV that is subsidized, has perks the consumer wants, and can be plugged in. The plug-in part will be ignored by those who bought the car for either or both of the other two perks.
Anecdote: I owned a LEAF and a PHEV when our Model 3 came home, and my wife and I had to decide which of the two older cars to sell. We could not agree, so we left it to the market. I wanted to sell the PHEV specifically because I thought my wife would succumb to convenience/forgetfulness and not charge the PHEV daily.
This argument kinda reminds me of the expression that it is expensive to be poor. If folks can’t afford it today, it won’t matter how future proof something is.
The median US income is around $55K, with something like 2/3 of Americans living paycheck to paycheck. If someone needs a car today, they’re likely already stretching their budget to get something in the $30K-ish range. Unless the government is going to subsidize BEVs down to that range, adoption is going to hit a wall if they don’t get drastically cheaper. There’s also the argument that the government subsidies will keep the prices artificially high.
With that being said, I do think the OEMs share some of this blame tho. Nearly every announcement of a new EV has a disclaimer that the cheaper models will be released sometime later. In markets with decent cheaper competition, you’re seeing OEMs adjust pricing to compete; in China, the LRY was recently cut to $45K. Why should it be incentivized to buy at $67K?
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SageBrush
REJECT Fascism
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