IRS weighs in on tax rebate, mostly bad news for Model Y

[SageBrush]

Better option - eliminate the $80k MSRP tier entirely.

I don't see the point of favoring SUVs with a higher cap.
If the Gov wants to engage in a little fun class warfare, then I suggest the EV credit starts to decline on a sliding scale past the median cost of a new passenger car.

 

[Hiline]

Just tell them to look at their previous year's 1040, Line 24. If it is $7,500 or more, they will most likely get the full credit this year.

People can't comprehend that Total Tax liability is the complete amount of taxes they will pay, vs owing some money in April. You can get your normal refund and the credit, to provide a giant refund check.

That is exactly what I tell people, but it does not help those people who have internalized a misunderstanding.

Blame it on the lack of basic financial literacy in American education.

 

[hmmwv]

There is much we could discuss in speculating how this will unfold and I feel like many people are making assertions without fully understanding the bill. Starting next January, a vehicle will be disqualified from the credit entirely if it contains any battery components from China and the other foreign entities of concern. Start January 2025, a vehicle will be disqualified from the credit entirely if it contains any critical battery minerals from foreign entities of concern.

Everyone is busy frantically fighting the MSRP fire right now but just wait until the end of year approaches and more people clue into this other shoe that's about to drop: the number of vehicles qualifying for any of the credit will almost surely plummet regardless of MSRP, the material sourcing requirements are the really onerous aspect.

I absolutely agree with you that MSRP caps will be a trivial matter once the battery component and mineral content rules kick in.
This gets me thinking, the whole idea of the IRA is to **** China bring BEV supply chain home, but if you use MSRP caps to disqualify one of the largest battery consumer (compact crossover from multiple manufacturers) then this goal will not be achieved. If only the undesirable vehicles qualify then there is less incentive for companies like Tesla, GM, and Ford to even try to meet the battery component / mineral content goal. Since they won't qualify anyway why not do the opposite, buy whole packs from CATL/BYD, at least that'll save some cost and partially offset the IRA disadvantage.

 

[randmness]

Since they won't qualify anyway why not do the opposite, buy whole packs from CATL/BYD, at least that'll save some cost and partially offset the IRA disadvantage.

I would be surprised if the US didn’t eventually levy tariffs on these components and resources (similar to what we already do for steel, trucks, etc etc.)

 

[texas_star_TM3]

K

I absolutely agree with you that MSRP caps will be a trivial matter once the battery component and mineral content rules kick in.
This gets me thinking, the whole idea of the IRA is to **** China bring BEV supply chain home, but if you use MSRP caps to disqualify one of the largest battery consumer (compact crossover from multiple manufacturers) then this goal will not be achieved. If only the undesirable vehicles qualify then there is less incentive for companies like Tesla, GM, and Ford to even try to meet the battery component / mineral content goal. Since they won't qualify anyway why not do the opposite, buy whole packs from CATL/BYD, at least that'll save some cost and partially offset the IRA disadvantage.

Undesirable vehicles like the Model 3, Ioniq5 , KIA EV, ID.4 ? God forbid we are attempting to encourage the production of affordable EVs with our tax dollars and not subsidizing a Model Y Performance…

 

[Snow Drift]

Model X and Rivian SUV have 8” or more clearance in highest setting. Those classify as SUVs …. Not the IRS problem that Tesla wants 6 figures for a Model X and well above $80k

Yes, MX has the ride height when lifted, but I don't think it's going to have a large off-road/rock crawling fanbase. The others I listed do go off road at times.

I still think it should be based on packaging. Even if you took a Ford Explorer and lowered it to car ride height, it's still an SUV body.

The Model Y might only be an inch or so more in ground clearance, but the overall design is taller. It is an SUV, not a hatchback or wagon (which are basically a sedan with a different rear).

Another Tesla Model Y size comparison shows higher ride height, easier entry

The Tesla Model Y starts shipping next month, but much still isn’t known. Tesla hasn’t released size specs yet, so...

electrek.co

 

[Eto Demerzel]

If you want to tell the IRS to follow EPA guidelines (and full intent of the IRA) instead of CAFE, that would follow consumer and manufacturer labelling of 'suv's
IRS wants the feedback

Federal Register :: Request Access

 

[cdub]

Is the Model Y an SUV? Not really.

Should it be cheaper. YES

I hope this rule inspires Tesla to make the cars freaking affordable and 49k again.

 

[Snow Drift]

If you want to tell the IRS to follow EPA guidelines (and full intent of the IRA) instead of CAFE, that would follow consumer and manufacturer labelling of 'suv's
IRS wants the feedback

Federal Register :: Request Access

Just to be clear, the IRS does not want our opinion on what is an SUV. They are asking for feedback on the IRS form 8936 submitted for the Credit.

Request for Comments: Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on:

(a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;
(b) the accuracy of the agency's estimate of the burden of the collection of information;
(c) ways to enhance the quality, utility, and clarity of the information to be collected;
(d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and
(e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.

 

[texas_star_TM3]

Is the Model Y an SUV? Not really.

Should it be cheaper. YES

I hope this rule inspires Tesla to make the cars freaking affordable and 49k again.

bingo. all the complaints about the Model Y falling under $55k cap don't realize that there might be a benefit if the Model Y would cost $55k or less...

 

[CHILLIBAJJI]

bingo. all the complaints about the Model Y falling under $55k cap don't realize that there might be a benefit if the Model Y would cost $55k or less...

new buyers want it at 55 plus tax credit...
already owners want to stay at 66k and have IRS increase the limit to 80k to preserve the resale value....

all new buyers simply waiting... unless thay are infactuated by model y and rich...

 

[cdub]

unless thay are infactuated

All users on this site are totally infactuated.

 

[tangers]

new buyers want it at 55 plus tax credit...
already owners want to stay at 66k and have IRS increase the limit to 80k to preserve the resale value....

all new buyers simply waiting... unless thay are infactuated by model y and rich...

Agree. But 55k plus tax credit is definitely not going to happen. Car manufacturers can always find a way to eat some of your tax credit. This has happened in the past.

 

[texas_star_TM3]

Agree. But 55k plus tax credit is definitely not going to happen. Car manufacturers can always find a way to eat some of your tax credit. This has happened in the past.

why not? The Model Y ain't a $66k vehicle tbh. Maybe offer a lower range, RWD version only... VW is offering the large ID.4 at under $40k starting... and Hyundai is offering the Ioniq5 at slightly above $40k starting...

 

[CHILLIBAJJI]

anything can happen.... remember TESLA delivered new cars - perhaps built at higher material costs - at the old prices until Nov 2022.
Doesn't seem like Tesla prices are tied to raw material prices... it's not like they are upping and dowing prices based on the cost of the car that was just built...
it's probably about margins/volumes...

 

[tangers]

why not? The Model Y ain't a $66k vehicle tbh. Maybe offer a lower range, RWD version only... VW is offering the large ID.4 at under $40k starting... and Hyundai is offering the Ioniq5 at slightly above $40k starting...

Just check my local ID.4 inventory . More than 100 available and all above $50k msrp. Interesting.

 

[cdub]

Agree. But 55k plus tax credit is definitely not going to happen. Car manufacturers can always find a way to eat some of your tax credit. This has happened in the past.

Why not? The Y long range used to be $48 or $49 and the standard range was $39.

 

[tangers]

Why not? The Y long range used to be $48 or $49 and the standard range was $39.

yes, but you also know when was that price right? The car was only $500 dollars back in the 50s.

 

[ucmndd]

yes, but you also know when was that price right? The car was only $500 dollars back in the 50s.

Right, because 70 years of typical inflation is exactly the same thing as the massive opportunistic ~60% run-up in Model Y prices in the last 2 years.

Brilliant.

 

[cdub]

but you also know when was that price right?

March 2021

Tesla Car Price History

2022-23 2022-2023 History Tesla Model Line 2022 Trim,Max Range (EPA),Top Speed,0-60 Acc.,Max Tow Capacity (US),Pre-2022 Intro. Price,2021 EOY Price,M-X Plaid Req 6-seat option,M-3 LR & M-Y Price increase,All Cars Price increase,M-3 LR & P Price increase,M-Y SR AWD Intro (OTM),All LR (& M-Y P) P...

docs.google.com