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Potential New EV Tax Credit for 2021

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glide

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Jun 6, 2018
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Tesla to get access to $7,000 tax credit on 400,000 more electric cars in the US with new incentive reform - Electrek

This is pretty huge. If I can get $7k off a Model 3 Performance at current prices, I'm not sure there will be any reason to even test drive any of the ICE cars on my list. I feel like this could almost be game over for the other sports sedans out there. Might hurt Tesla sales in the short term tho. Thoughts?
Do you make less than $40K a year?

If not, you aren’t getting any credit. And that’s if this passes to begin with.
 

nvx1977

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Nov 25, 2017
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Tax credits offset your tax liability. If you owe the IRS more than $7000, and you meet the criteria for your EV purchase, you'll get the full credit. The tax liability also includes any salary withheld by your company (which is just your tax liability paid earlier in the year).

Because this is a non-refundable tax credit, if your tax liability is less than $7000, the tax credit will zero out your liability, but the remainder is lost. You can't carry it over to the next year.
 
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stopcrazypp

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Dec 8, 2007
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Do you make less than $40K a year?

If not, you aren’t getting any credit. And that’s if this passes to begin with.
Income limits only apply to the used car provision of the law in section 402 (which does not have volume limits). The new car portion (section 401) is the same as previous, there is no income limit. The only change is it extends things to 600k units while excluding volume in the period in between where this new law didn't exist yet for manufacturers who already reached past 200k units (like Tesla):
Sec. 401. Modification of limitations on new qualified plug-in electric drive motor vehicle credit (§30D). The provision expands the qualified plug-in electric drive motor vehicle credit under Section 30D to apply a new transition period for vehicle sales of a manufacturer between 200,000 and 600,000 electric vehicles (EVs), under which the credit is reduced by $500. The provision replaces the current phaseout period (which begins at 200,000 vehicles) with a phaseout period that instead begins during the second calendar quarter after the 600,000-vehicle threshold is reached. At the start of the new phaseout period, the credit is reduced by 50% for one quarter and terminates thereafter. For manufacturers that pass the 200,000-vehicle threshold before the enactment of this bill, the number of vehicles sold in between 200,000 and those sold on the date of enactment are excluded to determine when the 600,000-vehicle threshold is reached. The provision extends the 2-wheeled plug-in electric vehicle credit through 2026. It also extends the 3-wheeled plug-in electric vehicle credit through 2026.

Used car provision, which is new and completely different:
Sec. 402. Credit for previously-owned qualified plug-in electric drive motor vehicles (§25E). The provision creates a new refundable credit for buyers of used plug-in electric cars from date of enactment through 2026. Buyers can claim a base credit of $1,250 for the purchase of qualifying used EVs, with additional incentives for battery capacity. The credit is capped at the lesser of $2,500 credit or 30% of the sale price. To qualify for this credit, used EVs must generally meet the eligibility requirements in the existing Section 30D credit for new EVs, not exceed a sale price of $25,000, and be a model year that is at least two years earlier than the date of sale. Buyers with up to $30,000 ($60,000 for married couples filing jointly) in adjusted gross income can claim the full amount of the credit. The credit phases out so that buyers with below $40,000 ($70,000 for married couples filing a joint return) in AGI may be eligible for a reduced credit. Buyers must purchase the vehicle from a dealership for personal use and cannot claim the credit more than once every three years. The credit only applies to the first resale of a used EV and includes restrictions on sales between related parties.

Discussed extensively already in another thread.
Federal Tax Credit may be coming back for Tesla purchases

Link to summary (page 4 describes it):
https://mikethompson.house.gov/sites/mikethompson.house.gov/files/GREEN Act 2021 sxs.pdf
Seriously, people perhaps need to look directly at the source and ignore the reporting, which often gets things wrong (even though it seems so clear cut in the source).

A lot of people had been confused about this difference. As another put it, logically an income limit would not be compatible with the per manufacturer volume limit, given it would make it impossible to determine how many cars already used the volume until the given income taxes were filed for the year already. Under the phase out provisions, the volume is supposed to be determined every quarter, so that definitely would not work. That's why the new car part has no income limits and the used car part has no volume limits.
 
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ItsNotAboutTheMoney

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Jul 12, 2012
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do you have any supporting documentation on this? Not saying it's untrue, but that seems like a strange arbitrary number since it doesn't match up with any of the existing tax brackets.

You can search for the bill:
- New vehicle limit raised to 600,00, and ignores sales after expiration, so Tesla would have a window.
--Adds a used PEV credit for lower income households.
The number is chosen, I believe to cover the bottom 50% of households.
 

Mengy

Active Member
Feb 18, 2020
1,419
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PA
I was planning on buying my Model Y sometime in mid 2022.

However, if this new GREEN Act goes into effect and Tesla's qualify again for a $7000 tax rebate, I might be tempted to buy a MY sooner. That 400K window won't last more than a year or so with Tesla's US production levels.

Very interesting.
 
While everyone’s talking about getting a $7,000 cheaper car. Though somewhat unlikely, it’s possible that Tesla increases prices a little if such a tax credit gets passed. I mean they just basically raised the base price of the S/X with the aesthetic refresh.
 

Scott Fairchild

2014S,2016 X 90,2018 3, 2019 XRvn, 2021 Y, 2014S
Mar 27, 2016
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Melbourne fl
Contrary to some's popular belief, the EV tax credit is still alive and well as part of the $3.5 T social infrastructure package that can be passed by the Democratic majority.

Dems propose new $12,500 electric car rebate, Tesla left with $4,500 disadvantage

 
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Scott Fairchild

2014S,2016 X 90,2018 3, 2019 XRvn, 2021 Y, 2014S
Mar 27, 2016
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861
Melbourne fl
For the sake of our country I hope the $3.5 T social infrastructure package does not pass. Besides very little is for infrastructure.
I am sure it will accomplish much more than the $1.9 trillion tax giveaway to corporations and the top 1% or the $9 Trillion spent in the last four years.
 
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I feel that a product should stand on it's own merit without government subsidies. Yes there were subsidies for some Tesla lower priced vehicles in the beginning, but I think Tesla would have been just as successful with out them. Look at today, Tesla has proven that their vehicles are still in high demand even without the subsidies and despite the vehicles higher purchase cost. It seems that everything Musk touches turns to gold, either he is a genius or is is very smart when it comes to hiring the right people. I own a used model X and I didn't purchase the Model X based on subsidies and besides, the old subsidies or the proposed new ones wouldn't have applied to my purchase even if I had of purchased new. I am 67 and I have driven diesel VW's sense the first Rabbit diesel and several diesel pickups, and for the longest time the only non diesel was my Harley, so my friends have told me that I was the last person they expected to buy a Tesla. But to be honest, my wife and I love the car and it is nice to not have to purchase diesel that is over $1.00 higher than last Dec. and once my friends or family ride in our Tesla, they are impressed. I live in a smaller town and I am sure I have the only Tesla here and I get a lot of complements and questions about the car. Once I was parked on the side of the road and a pickup drove by rolling coal which now that I am older, this is pretty darn stupid on his part. I used to delete my pickups when younger, but now and I have come to realize there isn't a need to today and why pollute anymore than we have to. I own a 2017 Ford crew cab long box 6.7 diesel and it has so much torque and hoarse power there is no need to delete it, even if I could find a supplier in the states, and with the catalyst and urea injection plus the diesel particulate filter, it is very clean..
 
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Scott Fairchild

2014S,2016 X 90,2018 3, 2019 XRvn, 2021 Y, 2014S
Mar 27, 2016
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861
Melbourne fl

This has very little to do with the merits of the vehicle,​

Current research reveals that:​

Electric vehicles save you money​

Electric vehicles cut your emissions​

Electric vehicles offer you a better driving experience​

Electric vehicles cut your oil use​

Electric vehicles are convenient and support an energy-efficient environment​

The climate crisis is self-evident and must be reversed to counter the current environmental effects and the destructive environmental effects of those who came before us, like coal rollers, deleted pick up trucks and diesel emissions from Diesel Gate, where Volkswagen violated the Clean Air Act as 590,000 diesel motor vehicles were equipped with “defeat devices” in the form of computer software, which was designed to cheat on federal emissions tests.​


In 2019, the United States imported about 3% of the petroleum it consumed, and the transportation sector accounts for approximately 30% of total U.S. energy needs and 70% of U.S. petroleum consumption. Using more energy-efficient vehicles like hybrid and plug-in electric vehicles is an important part of continuing this successful trend of minimizing imported petroleum.

Across all models, research finds that the monetary incentives are consistently positive and statistically significant.


1632782657240.png


Research shows that every $1000 offered as a rebate or tax credit increases average sales of electric vehicles by 2.6%. We also find that HOV lane access is a significant contributor to adoption, the effect is a 4.7% increase corresponding to density of HOV lanes (every 100 vehicles per hour).

EV subsidies are critical to saving the planet for future generations and should be increased and maintained until the planet is running on self-sustainable energy.

Without TESLA, would anyone ever think those vehicle manufacturers would be turning to produce electric vehicles, especially in the face of the oil boys lobbyists? Come on, Man!

Let's look at subsidies that destroy the planet and eliminate them immediately!:
The Environmental and Energy Study Institute reported that direct subsidies to the fossil fuel industry in the US alone totaled $20 billion per year, with 80% going toward oil and gas. In addition, from 2019 to 2023, tax subsidies are expected to reduce federal revenue by around $11.5 billion. Perhaps it's time for oil to stand or fall on its own.

It warms my heart to see a giga-factory in the heart of oil-rich Texas and perhaps with his recent application to market clean energy in Texas, Musk can also put the polluting Electric Reliability Council of Texas (ERCOT) out of business as well and replace the Texas grid with one that works.


Perhaps a $3 per gallon tax (for environmental reconstruction) would accelerate the transition to EVs as well.
 
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