Tesla EV Tax Credits coming back?

[eleven24]

the best chance of an EV tax credit coming back by way of some bill is if it is part of the Infrastructure Bill, which again, I think is most likely to be passed by the Dems on reconciliation basis.

Personally, living in the Northeast, I want the infrastructure bill passed just so we can get some of these pothole laden roads filled! I suspect to get that done the EV credit would be likely one of the first concessions made by the Democrats, though I hope not.

Biden's initial proposal was $174 billion on the EV infrastructure. My assumption would be that means not only the EV tax credit, but also the charging network, and perhaps manufacturer incentives. Republicans countered with $4 billion. I'd say they're pretty far apart. However, Obama's EV funding was $2.4 billion back in 2009 and that got the initial tax credit. Pretty sure all of that $2.4B went to EV tax credits. There is an argument to be had for providing the consumer with $4B in credits and leaving the manufacturers and 3rd parties to build out the rest of the infrastructure.

 

[PatrickTM]

Personally, living in the Northeast, I want the infrastructure bill passed just so we can get some of these pothole laden roads filled! I suspect to get that done the EV credit would be likely one of the first concessions made by the Democrats, though I hope not.

Biden's initial proposal was $174 billion on the EV infrastructure. My assumption would be that means not only the EV tax credit, but also the charging network, and perhaps manufacturer incentives. Republicans countered with $4 billion. I'd say they're pretty far apart. However, Obama's EV funding was $2.4 billion back in 2009 and that got the initial tax credit. Pretty sure all of that $2.4B went to EV tax credits. There is an argument to be had for providing the consumer with $4B in credits and leaving the manufacturers and 3rd parties to build out the rest of the infrastructure.

Completely agree on the northeast pothole situation. Some towns are much worse than others (looking at you, Somerville, MA!)

I think type-2/Level 2 3rd party charging infra can be built out organically. Those are cheap/free in many situations. DCFC, on the other hand, will need some form of external funding since the economics of them just don’t work. A Tesla Supercharger (250kw) install is about $150k, and an Electrify America (350kw) install is about $350k. Plus maintenance, insurance, and potential land lease payments. That means currently, each DCFC will not be profitable for several decades of 24/7 fully occupied charging stalls with customers paying full price. We know that VW, Ford, and others are giving out three years of free unlimited DCFC. Many Tesla users have free supercharger referral miles, legacy unlimited supercharging, and other promos…so not a lot of people are paying full price.

In other words, they will not be profitable (at current build out costs and cheap charging prices). There won’t be strong organic investment unless you’re forced to (EA) or if you have insane stock prices (TSLA).

 

[k.alexander]

Oh please, as if any of the money would actually get spent the way you think, on the potholes that you care about! <end of rant>

 

[eleven24]

Completely agree on the northeast pothole situation. Some towns are much worse than others (looking at you, Somerville, MA!)

I think type-2/Level 2 3rd party charging infra can be built out organically. Those are cheap/free in many situations. DCFC, on the other hand, will need some form of external funding since the economics of them just don’t work. A Tesla Supercharger (250kw) install is about $150k, and an Electrify America (350kw) install is about $350k. Plus maintenance, insurance, and potential land lease payments. That means currently, each DCFC will not be profitable for several decades of 24/7 fully occupied charging stalls with customers paying full price. We know that VW, Ford, and others are giving out three years of free unlimited DCFC. Many Tesla users have free supercharger referral miles, legacy unlimited supercharging, and other promos…so not a lot of people are paying full price.

In other words, they will not be profitable (at current build out costs and cheap charging prices). There won’t be strong organic investment unless you’re forced to (EA) or if you have insane stock prices (TSLA).

I think we're at the tipping point where clearly the driving dynamics of an EV are on par with, or exceeding those of ICE vehicles. Early on the cost savings of electric vs gasoline compensated for the range and performance loss in an electric vs ICE. Now I'd say the biggest argument against EV's is the number of charging stations vs gas stations, along with the time it takes to stop and charge vs fueling up.

That said, are we reaching the point where the value of an EV is the vehicle itself and not the cost savings? Once we get to that point, accepting an equal cost per mile to drive an EV versus an ICE, then we'll see the explosion of charging stations as they'll become profitable. Regardless of what Congress decides on in the short term, it's inevitable that EV's will replace ICE's in the long term. How much they want to delay that is directly proportional to the amount of money big oil is stuffing into their pockets.

 

[PNWLeccy]

I regret not placing an order when the had the Standard Range at $40K

Absolutely! With the $4k price increase, that makes it ineligible for a $2.5k WA tax credit so it has effectively increased by $7.5k all in, if I could snag one. Pretty bummed about that

 

[Jasaka25]

I would order. Gas savings plus I’m sure the higher trade in amount atm. Once the chips shortage is fixed the used car market is going to drop in value. We traded while things were up.

Most accounts say used car values/prices are going to be high throughout this year at least. Also, take it for what you will, but according to CNBC, the chip shortage is possibly going to last until 2023.

 

[sgalla04]

Is this group still confident that EV credits for Tesla will be reinstated? The way infrastructure bill is going, I am not sure any more. I placed my order in Apr and put it on hold and just itching to take the delivery. Not sure how long I can hold

I think there will be something in 2022. If optimistic is $12,500 ($10,000 for Tesla) fully refundable for a less than $80,000 EV, then I’d say pessimistic is probably $7,000 non-refundable for manufacturers over the # of EVs sold limit (e.g. Tesla & GM).

 

[PatrickTM]

I think we're at the tipping point where clearly the driving dynamics of an EV are on par with, or exceeding those of ICE vehicles. Early on the cost savings of electric vs gasoline compensated for the range and performance loss in an electric vs ICE. Now I'd say the biggest argument against EV's is the number of charging stations vs gas stations, along with the time it takes to stop and charge vs fueling up.

That said, are we reaching the point where the value of an EV is the vehicle itself and not the cost savings? Once we get to that point, accepting an equal cost per mile to drive an EV versus an ICE, then we'll see the explosion of charging stations as they'll become profitable. Regardless of what Congress decides on in the short term, it's inevitable that EV's will replace ICE's in the long term. How much they want to delay that is directly proportional to the amount of money big oil is stuffing into their pockets.

Agree on the superiority of EV from ownership experience perspective. Yes, I would pay more for EV than ICE. The maintenance savings is icing on the cake.

I wasn’t talking about cost savings for the owner, but rather profitability from the DCFC facility owner. Owning a gas station makes money. A little bit on the fuel, a lot on the food/drinks. Owning a DCFC loses money. How can we make owning DCFCs profitable? A govt infrastructure investment will help. But there needs to be sustainable profit long term.

 

[eleven24]

Agree on the superiority of EV from ownership experience perspective. Yes, I would pay more for EV than ICE. The maintenance savings is icing on the cake.

I wasn’t talking about cost savings for the owner, but rather profitability from the DCFC facility owner. Owning a gas station makes money. A little bit on the fuel, a lot on the food/drinks. Owning a DCFC loses money. How can we make owning DCFCs profitable? A govt infrastructure investment will help. But there needs to be sustainable profit long term.

Just saw today a bipartisan group of 20 Senators agreed on the framework for the infrastructure bill with roughly the same amount ($974B over 5 years) allocated.

Timing wise, the Senate is on a 2-week leave starting tomorrow (Thursday) and will also be out of session from early August through mid September. That would leave 3 weeks in July to get it done, which is impossible.

Great news in reaching a bipartisan agreement, but looks to me like it is unlikely to happen until late 2021.

 

[TwelveVoltMan]

Just saw today a bipartisan group of 20 Senators agreed on the framework for the infrastructure bill with roughly the same amount ($974B over 5 years) allocated.

Timing wise, the Senate is on a 2-week leave starting tomorrow (Thursday) and will also be out of session from early August through mid September. That would leave 3 weeks in July to get it done, which is impossible.

Great news in reaching a bipartisan agreement, but looks to me like it is unlikely to happen until late 2021.

This doesn’t give me warm fuzzy feelings about a tax credit for 2021.

 

[DanCar]

womp womp

https://money.usnews.com/investing/news/articles/2021-06-24/us-infrastructure-deal-would-fund-electric-buses-charging-stations

quote:
A bipartisan $1.2 trillion infrastructure framework does not contain new money for electric vehicle rebates but would spend $15 billion to boost EV charging stations and buy electric school and transit buses, the White House said in a fact sheet.

 

[dancudds]

womp womp

https://money.usnews.com/investing/news/articles/2021-06-24/us-infrastructure-deal-would-fund-electric-buses-charging-stations

quote:
A bipartisan $1.2 trillion infrastructure framework does not contain new money for electric vehicle rebates but would spend $15 billion to boost EV charging stations and buy electric school and transit buses, the White House said in a fact sheet.

ergh - I'm still not swayed to change my MY pickup tomorrow to a lease. EV prices are close to ICE now so we'll probably still see wider adoption. Plugging the infra problem is still the most important adoption consideration IMO. How about adding an escalator tax on gasoline for the next 10+ years to make ICE a real hobbyist pursuit.

 

[sgalla04]

womp womp

https://money.usnews.com/investing/news/articles/2021-06-24/us-infrastructure-deal-would-fund-electric-buses-charging-stations

quote:
A bipartisan $1.2 trillion infrastructure framework does not contain new money for electric vehicle rebates but would spend $15 billion to boost EV charging stations and buy electric school and transit buses, the White House said in a fact sheet.

At least EV owners won’t have to pay for it via a direct fee for driving an EV:

“The deal dropped two funding ideas that had been considered: a per mile fee on electric vehicles and indexing gasoline taxes to adjust for inflation.”

 

[OUengineer]

Just saw today a bipartisan group of 20 Senators agreed on the framework for the infrastructure bill with roughly the same amount ($974B over 5 years) allocated.

Timing wise, the Senate is on a 2-week leave starting tomorrow (Thursday) and will also be out of session from early August through mid September. That would leave 3 weeks in July to get it done, which is impossible.

Great news in reaching a bipartisan agreement, but looks to me like it is unlikely to happen until late 2021.

Pretty much exactly what I was expecting (and hoping) for. I decided to take delivery on my car now and not wait until next year for a possible tax credit. It just felt like with the Green Act and Clean Energy for America Act being introduced recently, that it was anticipated the Infrastructure Bill would not include EV credits.

And I personally don't think there should be EV credits. The cars are so much better than ICE now, they will sell themselves as more and more people have friends and colleagues that buy them. Right now, it takes a few months to get a good one anyways, it doesn't even make sense to try to increase demand yet. My hope is that instead of going to EV rebates, we will provide more money to charging infrastructure and solar panel credits, in particular. I really really want solar, but it's such a bad financial decision with a 20-25 year payoff that it's not even a consideration right now. A 10k credit for that would go a long way in the right direction.

 

[sgalla04]

Pretty much exactly what I was expecting (and hoping) for. I decided to take delivery on my car now and not wait until next year for a possible tax credit. It just felt like with the Green Act and Clean Energy for America Act being introduced recently, that it was anticipated the Infrastructure Bill would not include EV credits.

And I personally don't think there should be EV credits. The cars are so much better than ICE now, they will sell themselves as more and more people have friends and colleagues that buy them. Right now, it takes a few months to get a good one anyways, it doesn't even make sense to try to increase demand yet. My hope is that instead of going to EV rebates, we will provide more money to charging infrastructure and solar panel credits, in particular. I really really want solar, but it's such a bad financial decision with a 20-25 year payoff that it's not even a consideration right now. A 10k credit for that would go a long way in the right direction.

I really like your enthusiasm and agree directionally with your points. However, the vast majority of Americans can’t afford EVs compared to economy ICE cars. Most people on this forum and our friends and colleagues are not “the majority of Americans.” I hope they do institute EV credits, even if there is a tax liability needed or max sale price so it drives more EV adoption.

 

[Firocity]

EV Credits are still coming. There is going to be a second infrastructure bill that will get passed via reconciliation that will most likely have the EV credits in it. Biden said he won't sign the Bi-partisan bill without a second bill with all the extra goodies he didn't get. So I wouldn't rule them out just yet.

 

[TwelveVoltMan]

I really like your enthusiasm and agree directionally with your points. However, the vast majority of Americans can’t afford EVs compared to economy ICE cars. Most people on this forum and our friends and colleagues are not “the majority of Americans.” I hope they do institute EV credits, even if there is a tax liability needed or max sale price so it drives more EV adoption.

This. Spot on.

 

[k.alexander]

EV Credits are still coming. There is going to be a second infrastructure bill that will get passed via reconciliation that will most likely have the EV credits in it. Biden said he won't sign the Bi-partisan bill without a second bill with all the extra goodies he didn't get. So I wouldn't rule them out just yet.

Where did you see this about Biden and a second bill? Thanks

 

[Firocity]

Where did you see this about Biden and a second bill? Thanks

“I expect that in the coming months this summer, before the fiscal year is over, that we will have voted on this bill, the infrastructure bill, as well as voted on the budget resolution. But if only one comes to me, this is the only one that comes to me, I’m not signing it. It’s in tandem,” Biden told reporters at the White House."

Biden says he won’t sign bipartisan bill without reconciliation bill

President Biden on Thursday said he won’t sign the bipartisan infrastructure deal if Congress doesn’t also pass a reconciliation bill, committing to a dual track system to get both bills passed.…

thehill.com

 

[OUengineer]

EV Credits are still coming. There is going to be a second infrastructure bill that will get passed via reconciliation that will most likely have the EV credits in it. Biden said he won't sign the Bi-partisan bill without a second bill with all the extra goodies he didn't get. So I wouldn't rule them out just yet.

I agree there is likely to still be some credits at some point, but I would expect them late Fall of this year at the earliest. This would mean that if it is non-refundable, then you would not have much time to arrange your taxes to take advantage, which then moves it to next year for most people.

For myself, I would lose the 2500 CO tax credit and who knows how the value of my current car and the price of a new Tesla would change by that time. I expect my current car value to be several thousand lower and a Tesla to be several thousand higher (already is currently 1500 more than when I placed my order in early April). All of which is to say, I'm excited to take delivery of my car this weekend, even without the credit.

But for anyone needing the financial incentive, being patient and waiting until next year could certainly pay off.