Guys lost in the BS about Ford yesterday was that they are building their own EV plant. I think they would get pretty pissed if Trump pulled this as by the time they bring an EV to market, Tesla and probably GM will be over 200,000 and the price of EV will be way down. Thus leaving Ford to be one of the last to market and with $7,500 in extra profit per car for them.
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JeffK
Well-Known Member
Clarification: it doesn't lower the initial costs of the EV.
If they make enough income to claim the full $7500 tax credit, then they can claim it when they do their taxes in the following year.
Haxster
Member
Well, it "sort of " does. Not the "initial" cost, but the effective cost of one EV over another.
Here's how:
If a prospective buyer, who's income qualifies them for the $7,500 tax credit, is deciding between a $40K Bolt (who's tax credits have completely run out) and a just-introduced $40K Ford EVX, then their effective cost is $7,500 less for the Ford.
With a ~20% net cost price advantage, Ford's EVX sales could be strong against the Bolt. To be competitive, GM would probably need to discount the Bolt and lose profits (if there were any to begin with).
Of course, all of this tax credit stuff could instantly become history with a Presidential Executive Order
You're mostly right. Yes, it is only US sales that are counted. Once the 200,000th car is sold in the US it phases out over the next year and half or so, like this:
For the rest of the quarter that the 200,000th car was sold in and for the entire next quarter everyone who takes delivery will still get the full credit.
For the two quarters after that everyone who takes delivery will get half the credit ($3750).
For the two quarters after that everyone who takes delivery will get a quarter of the credit ($1875).
Dan Detweiler
Active Member
Well, it "sort of " does. Not the "initial" cost, but the effective cost of one EV over another.
Here's how:
If a prospective buyer, who's income qualifies them for the $7,500 tax credit, is deciding between a $40K Bolt (who's tax credits have completely run out) and a just-introduced $40K Ford EVX, then their effective cost is $7,500 less for the Ford.
With a ~20% net cost price advantage, Ford's EVX sales could be strong against the Bolt. To be competitive, GM would probably need to discount the Bolt and lose profits (if there were any to begin with).
Of course, all of this tax credit stuff could instantly become history with a Presidential Executive Order
This is basically what I was getting at. I know how the tax credit works. The second point is Ford coming to market last or close to the end will be able to take advantage of low battery cost. It wouldn't surprise me in the future if one of the big auto makers just buys their batteries directly from Tesla.
Ah... Now we know why taxes weren't revealed. Someone doesn't want us to know that he took the Tax credit for his Tesla.
Obviously you are technically correct, but indirectly Ford will surely capture much of the benefit. In 2001 the Arizona legislature passed a bill to provide generous tax rebates for alt fuel vehicles. (The way the bill was written caused an uproar given that you could add an aftermarket small propane tank to a luxobarge ICE and get thousands back, but that's another story.) I purchased a Chevy Cavalier factory bi-fuel car and received about $7000 back from the state if I recall correctly. The car was cheap to run as I could almost exclusively run on cng and could use car pool lanes for my lengthy commute. As for the $7000, I believe Chevrolet actually captured most of that benefit by the much higher sales price I paid for the bi-fuel vs pure ICE Cavalier. (I had very little leverage to dicker on price.) This isn't an issue for Teslas since price is not negotiable but surely will be for any other car purchase such as a Bolt, i.e., I'll bet Bolt prices will be much more negotiable after the credit disappears. But to be fair, Tesla may also need to drop list prices somewhat when the tax credit disappears.
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