Retroactive & at-sale full $7500 EV tax credit (Electric Credit Access Ready at Sale [CARS] Act)

[Mardak]

Ha… These legislators (' staff?). I received an email response from my Representative about my support for the Electric CARS Act, and everything was about the H.R. 848 GREEN Act instead. I don't quite recall if I included "H.R. 1271" in my original message, but I'm pretty sure I didn't include the other bill, so I suppose at least someone did look up information even though it was wrong. I guess I'll write up another message specifically mentioning the bill number.

 

[ThomasD]

So the tax credit can be rolled into your car payment? The manufacture can write the 7500 off on their taxes. So if they sold 50,000 cars they could write off 375,000,000 dollars at tax time?

 

[Nakk]

OK, I'll be the unpopular one here. Rather than extend the credit, it should be eliminated entirely. No credit for anyone who wasn't already due one the day the bill is signed. The credit was designed to incentivize car makers to build EVs. That mission is accomplished. Every automaker knows now that they must make the switch to EV or die. No incentive required. All a credit is now is a industry bail out bill. Fine if you want that, but call it that. Rather than waste money on an EV credit, expand the credit on E-bikes and solar energy. Those two things would have far more bang for the buck in fighting climate change. We've got the ball rolling with EVs, let's get infrastructure moving along too.

I'm not a fan of punishing coal or oil. Rather, let's help solar get moving faster, and then let the market drive the move to clean energy, just like EVs are killing ICE vehicles right now. That will move the ball much faster than fighting an industry and putting it's employees out of work. Let the market push clean energy and we'll have it sooner with less pain. Tesla has already proven that "This is the way."

 

[dreamwave6]

OK, I'll be the unpopular one here. Rather than extend the credit, it should be eliminated entirely. No credit for anyone who wasn't already due one the day the bill is signed. The credit was designed to incentivize car makers to build EVs. That mission is accomplished. Every automaker knows now that they must make the switch to EV or die. No incentive required. All a credit is now is a industry bail out bill. Fine if you want that, but call it that. Rather than waste money on an EV credit, expand the credit on E-bikes and solar energy. Those two things would have far more bang for the buck in fighting climate change. We've got the ball rolling with EVs, let's get infrastructure moving along too.

I'm not a fan of punishing coal or oil. Rather, let's help solar get moving faster, and then let the market drive the move to clean energy, just like EVs are killing ICE vehicles right now. That will move the ball much faster than fighting an industry and putting it's employees out of work. Let the market push clean energy and we'll have it sooner with less pain. Tesla has already proven that "This is the way."

While that may have been the purpose of the original EV credit, that doesn’t mean it is or should be the impetus for this new law. While all automakers are transitioning to EVs, most have a very long way to go. Meanwhile, consumers-at-large continue to need to be pushed to EVs. That’s what these new EV credit proposals on the docket are all about.

 

[cedcor]

OK, I'll be the unpopular one here. Rather than extend the credit, it should be eliminated entirely. No credit for anyone who wasn't already due one the day the bill is signed. The credit was designed to incentivize car makers to build EVs. That mission is accomplished. Every automaker knows now that they must make the switch to EV or die. No incentive required. All a credit is now is a industry bail out bill. Fine if you want that, but call it that. Rather than waste money on an EV credit, expand the credit on E-bikes and solar energy. Those two things would have far more bang for the buck in fighting climate change. We've got the ball rolling with EVs, let's get infrastructure moving along too.

I'm not a fan of punishing coal or oil. Rather, let's help solar get moving faster, and then let the market drive the move to clean energy, just like EVs are killing ICE vehicles right now. That will move the ball much faster than fighting an industry and putting it's employees out of work. Let the market push clean energy and we'll have it sooner with less pain. Tesla has already proven that "This is the way."

What about fossil fuel subsidies? Propping up both fossil fuels and clean energy is pointless.

I’m not sure about eliminating all EV incentives. I think it could be more targeted by income or graded by MSRP, but it has to be universal to all manufacturers. The exception would be if you want to incentivize domestic manufacturing more (eg. Extra $1000 for domestic built cars). Maybe we need a more targeted EV incentive to actually replace ICE vehicles. Cash for polluting ICE vehicles program?

I’m skeptical we’re at EV or die levels of adoption yet so don’t believe we can throw the EV parade just yet.

 

[Mardak]

So the tax credit can be rolled into your car payment?

Effectively yes. This bill should make it so that your purchase price is $7500 lower. You can simulate this by entering a $7500 larger downpayment for the loan although unclear how it will interact with sales tax calculations. For a 48-month loan, the payments should go down by about $165/mo, which is slightly higher than just the credit divided by the term as there's interest saved too.

 

[Mardak]

What about fossil fuel subsidies? Propping up both fossil fuels and clean energy is pointless.

Some would consider the largest "fossil fuel subsidy" as the lack of legislation imposing a carbon tax, but there has been push back to implement a new tax as it would be "too politically difficult." So not having a carbon tax while providing clean energy subsidies is basically the current status quo, and that is probably due to the practical nature of politics being able to pass EV credits, solar incentives, charging infrastructure, etc. In some sense, expanding the EV credit as proposed with the Electric CARS Act behaves like a negative carbon tax as the relative price difference between ICE vehicles and EVs reflects a disincentive to buy polluting vehicles, and this bill makes it a "good regressive tax (credit)" in that the flat $7500 EV incentive is a much larger percentage of a lower income buyer.

 

[ReversePolarity]

Picked up 12/31/2020 =X

 

[cedcor]

Some would consider the largest "fossil fuel subsidy" as the lack of legislation imposing a carbon tax, but there has been push back to implement a new tax as it would be "too politically difficult." So not having a carbon tax while providing clean energy subsidies is basically the current status quo, and that is probably due to the practical nature of politics being able to pass EV credits, solar incentives, charging infrastructure, etc. In some sense, expanding the EV credit as proposed with the Electric CARS Act behaves like a negative carbon tax as the relative price difference between ICE vehicles and EVs reflects a disincentive to buy polluting vehicles, and this bill makes it a "good regressive tax (credit)" in that the flat $7500 EV incentive is a much larger percentage of a lower income buyer.

So true. I think the Dems must resort to any means possible to further EV adoption even if it is a “negative carbon tax” as you put it. You almost need a generational change in politics to leave our reliance on fossil fuels behind.

 

[polyphonic54]

Retroactive is a waste of money if the goal is to drive new sales. But it’s YOUR money to begin with. Also not fare to cap per manufacturer as that rewards the laggards. Very conflicted here!

I kinda wish they would use it for more public L2 charging.

 

[Mardak]

I guess I'll write up another message specifically mentioning the bill number.

I got an actual response from an aide (instead of mostly boilerplate "I will keep your thoughts in mind"). Turns out I forgot that I had written to the Representative separately about the problems of GREEN Act's per-manufacturer date-of-enactment limits, but the official response was so generic that I didn't connect the dots correctly.

Anybody get more useful responses from legislators or aides?

 

[DaddysCar]

Rather, let's help solar get moving faster, and then let the market drive the move to clean energy, just like EVs are killing ICE vehicles right now.

I take your point, but how best to achieve this?

 

[dreamwave6]

I take your point, but how best to achieve this?

One word: EDUCATION

 

[Mardak]

But it’s YOUR money to begin with

That's an interesting distinction as this bill doesn't make the credit refundable (unlike the recent tax changes for recovery rebate, child tax credit, child care credit, etc.), so the EV credit only returns "your money" that you could have owed in taxes (potentially across 5 years with this bill). Unclear how that distinction falls if assigned to the seller who then passes on the savings to the buyer while allowing the seller to keep "their money" -- although at a high level, if either the buyer or seller had enough taxes to claim the full credit, it seems to be within the spirit of letting people keep their money.

 

[alloverx]

Well if you want to reward Tesla & GM for previous efforts, you could say any carmaker over 200,000 units gets a $10,000 credit versus $7500 under 200,000 units.
I'd rather see the money going to provide gas stations/Parks with Fast chargers.
Or Have folks with income below $50K get $10,000 credit spread over 5 years.
Or standardizing CCS and charging signage so its obvious where chargers are.
Or Heck even pay for Chademo cars to get free CCS adapters and remove Chademo chargers from the US
Or force all EV charging locations to report the charger status to a central website realtime so folks could monitor (I am sure other dubious things would come of this) but the intent is to make EV charging easy and reliable. Perhaps this would only be needed for the next 3/4 years.
Or force each state to have new homes/apartments/condo built with EV chargers in mind.
Or get schools buses converted to EVs within 5 years.

 

[RRKR]

Any update when this bill will be coming for discussion...
Is it make sense to wait for this bill to buy the Y?

 

[Mardak]

Any update when this bill will be coming for discussion...
Is it make sense to wait for this bill to buy the Y?

Generally these bills need to go through committee first, so House Ways and Means and/or Senate Finance committees. Alternatively, they get amended to some other bill similar to how the American Rescue Plan changed many things at once.

If you think this bill will pass, the retroactive behavior makes it so your purchase anytime this year count for getting the credit when you file your taxes. If you need the purchase price reduced by the credit at sale time, then you would need to wait for this bill to pass.

 

[acarney]

I think we're starting to get to the point where we don't need that credit as much. Think of all the people with big SUVs and trucks that are $40k+ (when they don't actually need it for work or towing a boat or something) and everyone with a BMW, MB, or Lexus that's near $40k or more. There is a huge amount of people out there that could afford to switch to EVs, and the more that switch the cheaper things will get.

I would love to see this money dumped into public EV charging. Build level 2 chargers at all national and state parks and recreation areas. Build fast charging on smaller routes that EA or Tesla hasn't gone after yet. Build charging out like crazy. Open the bid process for private companies to win the funds and build out the network but put restrictions on how many chargers per location, that they all have app activation as well as simple credit card swipe, and a "fail over" of free if they app and credit reader are offline. Require funds awarded are used within 1 year and projects are completed within 2 years or something. How great would it to see a network like EA has, but twice or three times the size within a year or two? How great would it be to know you have a charger every 100 miles that will work ALL. THE. TIME. Maybe the family that can't afford a $50k Tesla then could buy a $35k car with a smaller battery and 200 mile range because they know they can still road trip since chargers are everywhere.

How wonderful would it be to know we can visit our national parks and actually see what we're trying to save AND charge the car out in the middle of nowhere national park because we have ~10kW level 2s?

 

[Mardak]

I think we're starting to get to the point where we don't need that credit as much.

This gets back to the original intent of the EV credit as its per-manufacturer limits seems to encourage manufacturers to invest in EV production. The Electric CARS Act effectively converts it to encourage consumers of all income levels to buy EVs. Perhaps the original credit intent isn't as necessary anymore as manufacturers are indeed making EVs now, so we can avoid manufacturers capturing the credit for themselves. Unclear if potential buyers would still "need" the credit as you suggest competition should drive down prices while improving value, but removing the credit also has a bad image of "EV credit was mainly available to the rich and is taken away when the rest could start using it."

To your other point about charging infrastructure, yes it would be great to get that as well. Charging up on Mt. Rainier for several hours should get back ~100 miles, which should then be enough to reach a Level 3 charger especially when going downhill. Although it would seem like there would need to be many charging stations for popular destinations as it would be quite unfortunate for those who really "need" to charge to leave.

 

[acarney]

This gets back to the original intent of the EV credit as its per-manufacturer limits seems to encourage manufacturers to invest in EV production. The Electric CARS Act effectively converts it to encourage consumers of all income levels to buy EVs. Perhaps the original credit intent isn't as necessary anymore as manufacturers are indeed making EVs now, so we can avoid manufacturers capturing the credit for themselves. Unclear if potential buyers would still "need" the credit as you suggest competition should drive down prices while improving value, but removing the credit also has a bad image of "EV credit was mainly available to the rich and is taken away when the rest could start using it."

To your other point about charging infrastructure, yes it would be great to get that as well. Charging up on Mt. Rainier for several hours should get back ~100 miles, which should then be enough to reach a Level 3 charger especially when going downhill. Although it would seem like there would need to be many charging stations for popular destinations as it would be quite unfortunate for those who really "need" to charge to leave.

Yes, eventually there will need to be a number of chargers at those locations unless things change on the route up there. If we have slightly longer range (say 100 to 125kWh batteries in something the size of a 3 or Y and more locations of fast chargers (so maybe one at the base of the mountain rather than 75 miles away or something) you likely wouldn't need to charge while up on the hill. For the near term though (5 years or so) I think having a number of level two chargers at these areas would be a huge benefit to making EVs more available to the general public. I've already seen a couple areas where it would push my LR model Y to get there and back to a fast charger. Take a family that doesn't care about doing the math, adding a safe buffer for range loss while parked, etc and this is still a pinch point where they'll rather buy a $38k gas SUV or something so they "don't have to worry about road tripping with the kids in the summer."

Right now we probably could get away with 10 to 20 level 2 chargers at the main locations and maybe 8 to 10 at less frequented places.

The other huge issue is reliability and ease of use. Again I watched a youtube review video just published the other night on a MachE first edition and again they had trouble at an EA station. They had two or three errors; it worked, but required trying two or three stalls and plugging/unplugging a few times. This is from a channel that seems to want to promote the EA network just as much as the Tesla network and is extremely pro-EV, even non Tesla ones. If you were thinking of dropping $40k on a family car and were watching youtube to figure out if your wife and child would be disrupted by you owning an EV or not and every youtube video you watched the charger gave you issues, required moving cars, maybe required calling in to start the charge, etc, would you buy the EV?

We've had a few years of 3rd parties trying their "best" and industry standards. Now I think it's time government stepped in and created a frame work. I don't want them regulating Tesla of a private company that's building out a network, but they could come up with a baseline speed (150kW or 250kW), a connector (CCS), one industry standard handshake between charger and car, and credit card swipe and app API (so can be integrated into other public apps), and then put out a request for private companies to bid on doing the work. Likely these stations will have a lot of overlap with the market (most cars support CCS or could with an adapter). Potentially rather then building from popular to infrequent these government funded stations should work in the opposite way; stations on rural roads, state routes rather than interstates, routes towards national parks, coastal areas, winter activities areas, etc.

I still personally wouldn't recommend a non-Tesla EV to any of my friends unless they could afford it just as a second car that they didn't care if they didn't do road trips in. Not because I don't think they CAN'T do road trips, but that you have more stress doing them or more hassle compared to a gas car. It's still a big deal.

ATMs and vending machines and a number of other point of sale locations work dang near perfect all the time, I can't figure out why there are so many issues with chargers STILL.