Tesla $7500 Tax Credit Coming Back?

[KurtSanders]

Wow, the short list of countries with Free Trade Agreements (.eg No Japan, Africa, China, etc) coupled with exclusions for MAGI, MSRP and battery composition will certainly restrict many buyers. I expect that this will be a nightmare for IRS Compliance department to audit. Perfect!

 

[KurtSanders]

Crazy exclusions (MAGI, MSRP, Battery Composition, starts in 2023, only a limited list of Free Trade Countries, etc). Typical congress bill to reward only a few!

Read more in the 'Tesla Tax Credit Coming Back?'
Tesla Tax Credit Coming Back?

 

[Stuart Watson]

Government should stay the **** away from the markets ! I’d argue that it’s a wrongful waste of taxpayer money.

 

[TomServo]

I have an EDD of Aug - Sep. I will do my math and see if it makes financial sense to walk away from my current order and wait to reorder and 2023 Y. And by then who knows what new features Tesla will be including. So I wonder how many folks there are like me that might delay delivery.

Now if Tesla starts increasing prices to get a “taste of the gate” then my $67,990 PMY could still be about equal. The devil is in the math and what Tesla does with pricing. Today there is a $5500 delta.

 

[Seminole]

But only if the vehicle is eligible in 2022 by current rules. That excludes GM and Tesla, and partially excludes Toyota towards the end of the year.

It reads to me like an either or. If you would have qualified before this but the new limitations on price or income disqualify you, you get a credit under the old plan as long as you have an order placed. Anyone who qualifies for the new plan is eligible by is from the day of passage forward.

 

[AmpManMYP]

I have an EDD of Aug - Sep. I will do my math and see if it makes financial sense to walk away from my current order and wait to reorder and 2023 Y. And by then who knows what new features Tesla will be including. So I wonder how many folks there are like me that might delay delivery.

Now if Tesla starts increasing prices to get a “taste of the gate” then my $67,990 PMY could still be about equal. The devil is in the math and what Tesla does with pricing. Today there is a $5500 delta.

Couldn't you just change your current order from MYP to MYLR? That will push your EDD to early next year, and you'll get the price in effect when you originally ordered. Then round about December you could change the order back to MYP if that's what you really wanted. And thus you'd get the new tax credit...

I'm debating doing just that, as we're on track to get our new MYP in the next couple of weeks. I've got a M3 SR+ that will need to be sold after we get the Y, but would keep it if we push the order out. With apparently declining used Tesla values (gas crunch easing?), that complicates the savings calculation WRT shooting for the tax credit. Carvana is offering more than we paid for the 2019 M3, but that will probably not be the case in 6 months...

That and we'd like to have the use of the new MY for the rest of the year (need it for towing small boats/trailers, since we got rid of our old ICE SUV).

Decisions, decisions.

 

[TomServo]

Couldn't you just change your current order from MYP to MYLR? That will push your EDD to early next year, and you'll get the price in effect when you originally ordered. Then round about December you could change the order back to MYP if that's what you really wanted. And thus you'd get the new tax credit...

I'm debating doing just that, as we're on track to get our new MYP in the next couple of weeks. I've got a M3 SR+ that will need to be sold after we get the Y, but would keep it if we push the order out. With apparently declining used Tesla values (gas crunch easing?), that complicates the savings calculation WRT shooting for the tax credit. Carvana is offering more than we paid for the 2019 M3, but that will probably not be the case in 6 months...

That and we'd like to have the use of the new MY for the rest of the year (need it for towing small boats/trailers, since we got rid of our old ICE SUV).

Decisions, decisions.

Never thought of that.... thanks for the tip.

Now I'm beginning to wonder if Tesla won't reduce the price to prevent folks from doing that. When I bought my 2020 in July 2020 I was a week from delivery when Tesla lowered the price by $3K which I got. It's happened before and Elon has hinted at lower prices at some point. This might trigger it. This could cause EO4Q issues for them.

What was the price of a LR Y on May 11th?

 

[voxel]

Government should stay the **** away from the markets ! I’d argue that it’s a wrongful waste of taxpayer money.

Agreed but Tesla, GM, Ford, Toyota, BMW already benefited from the credits and to be consistent they should just allow the existing 10 year old credits expire naturally.

This bill basically forces Hyundai, Kia, VW, BMW, Toyota, etc. to move EV production to US and US freed trade countries.

 

[pepperoni]

New Vehicle Credit

1. Manufacturer caps eliminated. (Page 370, line 15)
2. Credit applies for vehicles purchased beginning January 1, 2023. (Page 386, line 1).
3. Transition provision for EVs with written sales orders dated in 2022 prior to the date of President signing the bill but delivered in 2023 allows purchaser to claim the “old” credit in 2023. (Page 386, line 20).
4. Vehicle must be assembled in North America to qualify for new credit. (Page 366, line 15).
5. North American assembly requirement applies to vehicles sold after the date of adoption of the bill. (Page 386, line 3)
6. $7,500 credit is broke into two binary pieces meaning the vehicle either qualifies for each piece of the credit or it doesn’t. No longer based on size of battery. (Page 366, line 6)
7. $3,750 of the new credit is based upon the vehicle having at least 40% of its battery critical minerals from the United States or countries with a free trade agreement with the United States. This is a list of countries with free trade agreements with the US.(Page 371)
8. The other $3,750 of the new credit is based on at least 50% of the battery components of the vehicle coming from the United States or countries with a free trade agreement with the US. (Page 372, line 13)
9. The 40% minerals requirement increases to 50% in 2024, 60% in 2025, 70% in 2026 and 80% in 2027. (page 371 line 23)
10. The 50% battery components requirement increases to 60% in 2024, 70% in 2026, 80% in 2027, 90% in 2028 and 100% in 2029. (Page line 373)
11. The government has until the end of the year to develop guidance on the battery requirements. (Page 374)
12. Beginning in 2025, any vehicle with battery minerals or components from a foreign entity of concern are excluded from the tax credit. (Page 374, line 20).
13. One credit per vehicle. (Page 375, line 12)
14. Modified gross income limit of $150k for individuals, $225k for head of household, and $300k for joint returns. Definition of MAGI (page 375, line 22)
15. MSRP of vehicle must be $80k or less for SUVs, Vans and Trucks. $55k for all other vehicles. (Page 377, line 4)
16. Dealer can apply credit at time of sale. Dealer must disclose to buyer the MSRP of the vehicle, the applicable tax credit amount and the amount of any other available incentive applicable to the purchase. (Page 378, line 6)
17. Credit terminates December 31, 2032.

Used Vehicle Credit

1. Tax credit of 30% of value of used EV with $4,000 cap (Page 387, line 23).
2. Used vehicle must be at least two model years old at time of sale. (Page 389, line 7).
3. The original use of the vehicle must have occurred with an individual other than the one claiming the used tax credit. (Page 389, line 10).
4. Used vehicle must be purchased from a dealer. (Page 390, line 3).
5. Used vehicle price must be $25k or less. (Page 390, line 5).
6. Used vehicle qualifies for tax credit only once in its lifetime. (Page 390, line 7)
7. Purchaser must be an individual (no businesses) to qualify for used credit. (Page 390, line 14).
8. Purchaser may only claim one used vehicle credit per three years. (Page 390, line 20).
9. Modified gross income cap of $75k for individuals, $112,500 for head of household and $150k for joint returns. (Page 388).
10. Credit may be applied at time of sale by dealer. (Page 391, line 15).
11. Credit terminates on December 31, 2032. (Page 391, line 12).

View attachment 833890

Where can I find the full text of this bill? Is there a phase out on the income limit, or is anyone who makes a penny more than $300K MAGI not qualified?

 

[rlzalusky]

Assuming it passes a lot of recent people may cancel and Tesla will push up a lot of people thinking they are 2023 safe. They will then cancel orders and people playing shenanigans. Unless you have the latest high price which it would make sense to cancel I would just bite the bullet.

 

[kithytom]

New MYP coming

 

[fstop11]

Hmmm, since I still have a Cybertruck on preorder, maybe I can get the credit next time...

 

[LeonC]

Couldn't you just change your current order from MYP to MYLR? That will push your EDD to early next year, and you'll get the price in effect when you originally ordered. Then round about December you could change the order back to MYP if that's what you really wanted. And thus you'd get the new tax credit...

I'm debating doing just that, as we're on track to get our new MYP in the next couple of weeks. I've got a M3 SR+ that will need to be sold after we get the Y, but would keep it if we push the order out. With apparently declining used Tesla values (gas crunch easing?), that complicates the savings calculation WRT shooting for the tax credit. Carvana is offering more than we paid for the 2019 M3, but that will probably not be the case in 6 months...

That and we'd like to have the use of the new MY for the rest of the year (need it for towing small boats/trailers, since we got rid of our old ICE SUV).

Decisions, decisions.

Thinking about the same thing

 

[patmurphey]

First, they have a problem with votes, Leahy is out recovering, Durbin and Murkowski also have attendance problems, Senate votes require physical presence.

Second, the really ugly part is that plugin hybrids with 7kwh batteries qualify for the full credit. That will delay the phaseout of ICE cars - just add a cheap chargeable 7kwh battery to as many ICE models as you want.

 

[voxel]

First, they have a problem with votes, Leahy is out recovering, Durbin and Murkowski also have attendance problems, Senate votes require physical presence.

Second, the really ugly part is that plugin hybrids with 7kwh batteries qualify for the full credit. That will delay the phaseout of ICE cars - just add a cheap chargeable 7kwh battery to as many ICE models as you want.

With two - does it matter? The whole goal of the bill is "America First" - to move back production of EVs and PHEVs to US/Canada/Mexico. Most EV tax credits are going to VW, BMW, Toyota, Hyundai, Kia, etc. who build everything overseas.

Also at this point, we don't know about the battery requirements since the bill says they will be worked out. Even 7 kWh PHEV is a whole lot better than an ICE car. Driving in EV mode in the city will reduce carbon emissions.

 

[whisperingshad]

Lucky original M3P owners that got state and fed rebates and bought at a low price, plus any grants

 

[orion2001]

Government should stay the **** away from the markets ! I’d argue that it’s a wrongful waste of taxpayer money.

Right. So we're cool with the tens of billions in subsidies for Oil & Gas companies every year that have actively hurt the transition to clean energy for decades though? The market isn't really "free". It never has been. And this isn't charity either. This is an investment in retaining and growing this technology space and keeping the US competitive. Because other countries would be happy to monopolize the market, and nothing would make China and other countries happier than to see the US put no effort in investing in this space while they pour billions into helping this sector grow domestically.

 

[nate704]

I see this thread is about to go south...3...2...1....

 

[LeonC]

I see this thread is about to go south...3...2...1....

why?

 

[tdroney]

Leave it to the politicians to write garbage rules like that. Good luck collecting on this if it does pass. 50% of the rebate depends on 50% of the battery materials from free trade countries? With Russia and China dominating those markets it will take some fast talking to make that work.
Did you see the part where the dealers can capture that rebate?