Tesla $7500 Tax Credit Coming Back?

[Unclepaul]

Imagine that if Tesla sees a ton of people delaying their deliveries for tax reasons, they will simply cancel that order and put you into the back of the line.
Since they need to make regular deliveries as they are produced, perhaps they will just go down their list until delivery can be accepted.

 

[Tippytj2]

If it passes, I think the biggest question for current prospective buyers is how and when it will be determined if a vehicle meets the battery assembly and raw materials requirements. In the bill it says they will use VIN numbers and confirmation from manufacturers, but that leaves a ton to be interpreted on both the government and manufacturer sides, and based on some of the sources in this thread, tracking at least the materials components of the battery could prove difficult, if not impossible. I suppose Tesla could simply choose not to participate given demand is high anyway, and really the same could be said for other EV manufacturers who are also enjoying great demand (most have crazy markups, except bolt/EUV). But it seems they’re giving the government and manufacturers until the end of the year to interpret the bill and confirm the battery portions of the requirement. It’s very possible many or most manufacturers will not qualify for up to several years due to the verbiage until domestic production and assembly can be ramped up, if that’s even possible in that timeline. I hope it passes; it will be fascinating to see how it plays out.

 

[nate704]

The current proposed bill is full of crap languages that make people confused, and it needs to be ironed out significantly.

 

[KingKai]

In the new bill, are the income limits from the previous year or the current year? If it's effective on 1/1/23, I assume it is based off 2022 income?

 

[acarney]

Imagine that if Tesla sees a ton of people delaying their deliveries for tax reasons, they will simply cancel that order and put you into the back of the line.
Since they need to make regular deliveries as they are produced, perhaps they will just go down their list until delivery can be accepted.

I wonder if it's already happening. I ordered a Performance Y on July 18th and was showing Sep 16th to Oct 14th... today I got notified that I'm matched with a VIN!

 

[randmness]

Has it been confirmed that the Model Y qualifies? I'm still curious to see what vehicles will actually qualify (ie which vehicles meet the origin thresholds for the battery critical minerals and battery components.)

Proposed Tax Break for Buying Electric Vehicles Is Too Hard to Get, Auto Makers Say

Draft rules for battery parts and minerals mean few current vehicles would be eligible, say lobbyists.

www.wsj.com

"Tesla has been investing in a battery supply chain for longer than traditional auto makers. Still, its vehicles likely wouldn’t qualify for tax credits under the proposed rules, people familiar with the company said. The company didn’t reply to a request for comment."

We have a Model Y reservation coming up in 12/2022, so I am curious to see if this passed (and the Y is eligible), if we could delay it to 2023. The current price of the LR is already $7K more than what we reserved it at, so probably not worth creating a new reservation.

 

[PineNut]

"Tesla has been investing in a battery supply chain for longer than traditional auto makers. Still, its vehicles likely wouldn’t qualify for tax credits under the proposed rules, people familiar with the company said. The company didn’t reply to a request for comment."

I don't subscribe to wsj.com so I can't read the details about the statement that Tesla vehicles "likely wouldn't qualify for tax credits".

The Tesla models manufactured in the US should at least qualify for a $3750 credit, half the maximum of $7500. The other half of the credit depends on where the battery and its components come from and that part isn't very clear, IMO.

The bill does state that initially 40% "of the value of the applicable critical minerals" (which include cobalt, lithium, nickel, manganese and others) must be "extracted or processed in any country with which the United States has a free trade agreement in effect". Based on your graphs, that will probably be very difficult to achieve, not only for Tesla but for anyone. And that percentage increases by 10% each year reaching 80% after 2026. I don't know what they mean by "value" other than the cost of each component in the battery compared to the total cost of the battery. Also, there may be ways around this requirement since you can also count materials which are recycled in North America.

I'm also not clear about my earlier question posted here regarding what happens when the bill is signed. Before the bill is signed I think you could sign a commitment to purchase an EV in 2022 (if that's possible) which qualifies under current law and still get your tax credit in 2023 even if that EV no longer qualifies with the new law (for EVs such as the Ioniq 5 or EV6). But some people think it goes even further than that where if you purchase such vehicle in 2022 after the new law is signed, you cannot get any credit even if you receive the vehicle in 2022.

Hopefully the bill will get some modifications to make things clearer before it's signed.

 

[randmness]

The Tesla models manufactured in the US should at least qualify for a $3750 credit, half the maximum of $7500. The other half of the credit depends on where the battery and its components come from and that part isn't very clear, IMO.

I think it mostly depends on where the battery materials and components come from. For example, the SR3 uses a LFP battery (manufactured by CATL in China.) Its possible this car will not be eligible for any part of the credit. I think there is movement to move LFP production to Freemont but I dunno if that is happening by 2023.

I’m really curious to see the final rules for what vehicles will qualify. Assuming this passes, I believe congress has to come up with the threshold definitions this year. Currently, it seems like the vast majority of the EV models for sale today will not be eligible for the full $7500 for the next couple years potentially. I know there is movement for more US refinement, but that’s probably a few years away for most.

 

[Rocket_man]

I think it mostly depends on where the battery materials and components come from. For example, the SR3 uses a LFP battery (manufactured by CATL in China.) Its possible this car will not be eligible for any part of the credit. I think there is movement to move LFP production to Freemont but I dunno if that is happening by 2023.

I’m really curious to see the final rules for what vehicles will qualify. Assuming this passes, I believe congress has to come up with the threshold definitions this year. Currently, it seems like the vast majority of the EV models for sale today will not be eligible for the full $7500 for the next couple years potentially. I know there is movement for more US refinement, but that’s probably a few years away for most.

I might be mistaken, but I think the LFP Cells are made by CATL in China but are integrated into a battery pack here in the US either in Navada or Freemont. If so that could qualify for the 1/2 credit.

 

[BikerPeaBody]

I wonder if it's already happening. I ordered a Performance Y on July 18th and was showing Sep 16th to Oct 14th... today I got notified that I'm matched with a VIN!

I ordered a couple weeks ago but has October as the latest delivery date.
do you plan on delaying if the bill passes to get the $7,500 or $3,500?

 

[acarney]

I ordered a couple weeks ago but has October as the latest delivery date.
do you plan on delaying if the bill passes to get the $7,500 or $3,500?

They want me to take delivery Tuesday. With my trade value the new car is $4,500 out of pocket. If rates go up one point and my trade goes down three or four thousand that basically would wash away any tax credit. I think I’m just going to go for it now. My Model Y is about 22 months old. I just don’t think I’ll be in a better position in three and a half months…

 

[patmurphey]

As far as lithium goes in interpreting the bill on raw materials how does one sort out the difference with China refining and mining elsewhere? If the mining location counts, how do you verify the source of any refined product? The bill is horribly flawed and the decision on dealing with the potential of any Tesla tax credit is not going to be clear anytime soon.

 

[PineNut]

I guess at some point, hopefully sooner than later, we'll see a list of makes/models of EVs/PHEVs which qualify for the new tax credit plus the amount they would qualify for.

Just updating the IRS site would be a good start...

IRS Section 30D List

 

[Thunder7ga]

I guess at some point, hopefully sooner than later, we'll see a list of makes/models of EVs/PHEVs which qualify for the new tax credit plus the amount they would qualify for.

Just updating the IRS site would be a good start...

IRS Section 30D List

I'm sure they will once it's actually passed...no need to do it ahead of time until things are settled and the President signs.

 

[yobigd20]

My understanding is that no tesla will be eligble for the ev tax credit anymore bc they dont meet the made in usa requirement for the battery materials.

 

[Thunder7ga]

My understanding is that no tesla will be eligble for the ev tax credit anymore bc they dont meet the made in usa requirement for the battery materials.

The way the bill passed as written by the Senate seems that way for sure....the House still has to debate and see if they will accept it as written or make changes. If they make changes it'll have to go back to the Senate...still not a law yet....but the way it's currently written seems unfavorable...but let's see what happens.

 

[yobigd20]

The way the bill passed as written by the Senate seems that way for sure....the House still has to debate and see if they will accept it as written or make changes. If they make changes it'll have to go back to the Senate...still not a law yet....but the way it's currently written seems unfavorable...but let's see what happens.

Well that sucks. I have 2 vehicles on order. A Model Y and an R1S but it looks like i wouldnt get credit for either. I dont think i would pass the income limit anyway. Havent run my tax numbers yet but i cashed out a lot of crypto this year which i think will put me over the income threshold anyway. Oh well. Though its not clear to me if they are basing it on '22 tax return or projected '23. But on the plus side if enough people are canceling now then perhaps my build will get pushed up and ill get my MY sooner

 

[GlmnAlyAirCar]

and 2021

and 2020 lol

 

[patmurphey]

...Though its not clear to me if they are basing it on '22 tax return or projected '23...

It will be latest filed. Believe me the IRS can easily verify like they did for the Covid checks. You could qualify in most of 2023 with your 2021 return using extensions to delay filing 2022.

 

[UoMDeacon]

Anyone have an idea how the income limit is going to work? Is it a hard stop if the AGI is $300k and you get $0 in tax incentives for a Model Y? Or will it be a graduated decrease?