Tesla EV Tax Credits coming back?

[PineNut]

Well, I'll have to correct myself regarding the House bill HR 5376.

On page 1250 they define "domestic assembly" as:

DOMESTIC ASSEMBLY QUALIFICATION
The term ‘domestic assembly qualifications’ means,
with respect to any new qualified plug-in electric vehicle, that the final assembly of such vehicle occurs
at a plant, factory, or other place which is located
in the United States and operating under a collective
bargaining agreement negotiated by an employee organization (as defined in section 412(c)(4)), determined in a manner consistent with section
22 7701(a)(46).

I had searched for the word "union" and didn't find it, but now I see they called it "collective bargaining agreement".

I now think a Tesla could qualify for an $8,000 credit.

 

[Hookemhorns]

Seems like 10k, not 8k, or is cnet mistaken?

EV tax credit increase to $12,500 makes the cut in Biden's Build Back Better framework

The White House says it has reached a deal with Democrats on the multitrillion-dollar plan, and EV tax credit boosts are part of it.

www.cnet.com

Looks like 8K is right for now.....

Under the currently available bill for reading:

https://www.congress.gov/bill/117th-congress/house-bill/5376/text (dated yesterday, 9/27)

Search for "vehicle credit for individuals" or "136401" to find the paragraphs about EV rebates

The rebate is $7500 for most normal EVs (battery over 50KwH)

Plus $500 for domestic content (including the requirement that the batteries are made in the US. Where are LFP batteries for the M3 made?)

Plus $4500 if built in a union plant.

So looks like currently it's $8,000 for Teslas that come in under the price cap (3s and Ys) and have US-made batteries).

A few other tidbits:
- Purchased after Dec 31, 2021
- There are incentives (basically up to $2500) for purchasing a used EV
- You can do it for multiple EV purchases in a year
- The credit starts decreasing after a joint income of $800,000 (or $400,000 for an individual)
- It appears a dealer can reduce the price they charge you by the amount of the credit, and the government will send the credit to them (that's how I read it, but some reference to other laws that I didn't follow). If so that means buyers get the credit immediately on purchase. Looks like that would not reduce the sales tax, since it is treated as a "down/partial payment"
- I don't know how to find where Tesla is in fact eligible because I don't see the wording that gets rid of the 200,000 vehicle limit. But every press article I read seems to think that's true

 

[Corndart]

Well, I'll have to correct myself regarding the House bill HR 5376.

On page 1250 they define "domestic assembly" as:



I had searched for the word "union" and didn't find it, but now I see they called it "collective bargaining agreement".

I now think a Tesla could qualify for an $8,000 credit.

That was my conclusion as well but Reddit and others have latched on to a $10k scenario. Who knows. They haven't passed anything yet and now punted the vote again.

 

[Corndart]

Currently the delivery + destination charge is fixed by law.

I would agree these charges are non-negotiable, but dispute the "by law" aspect - source?

 

[PineNut]

I would agree these charges are non-negotiable, but dispute the "by law" aspect - source?

I explained this in much more detail and provided a link to the actual bill, but that link has caused my post to be invisible until approved by a moderator since I'm a new poster.

 

[jsmay311]

So they are leaving the BS in where GM & Ford get more money for making PHEVs than Tesla makes to produce full on BEVs.

Leaving the union aspect out of it...
There are battery requirement minimums AND gasoline capacity maximums for PHEV's. The combination greatly reduces the credits applied towards them. Read page 1241-42:
Before 2027
40kwh minimum battery pack
2.5gal maximum gas tank

After 2027
50kwh minimum battery pack
2.5gal maximum gas tank

This looks sorta like a BMW i3 style consolation. Not tracking PHEV's enough know who else would be assisted by this weird "straddle".

It looks like PHEVs would be exempt from the gas tank size restriction since their battery capacities will likely be under 40kWh anyway. (So situations like the absurdly small 1.9-gallon gas tank in the i3 REx caused by ill-advised CARB rules should hopefully be avoided.)

As described on page 1245, the available credit amounts are defined as follows:

• Base amount = $4,000 (described in paragraph 2)
• Extra amount for battery capacity over 40 kWh and gas tank capacity under 2.5 gallons = $3,500 (described in paragraph 3)
• Domestic+union assembly = $4,500 (described in paragraph 4)
• Domestic battery cells = $500 (described in paragraph 5)

So a Ford or GM PHEV would be eligible for $4000+$4500 (+$500?) = $8,500-$9,000 (assuming domestic+union assembly, a battery under 40kWh OR a gas tank over 2.5 gallons, and maybe domestic battery cells.) vs $4000+$3500+$500 = $8,000 for a Tesla.

Also, I saw on page 1245 that it specifies a minimum qualifying battery capacity of 10 kWh. So I think that would exclude the Prius Prime (which I believe has a 8.8 kWh battery).

Lastly, it mentions that 2- and 3-wheeled plug-in vehicles are eligible for the credit (on page 1250), with the minimum battery capacity for such vehicles reduced from 10kWh to 2.5kWh and adding a minimum speed of 45mph. So potentially good news for Aptera and the various electric motorcycle companies (if I'm reading it right).

 

[Ogre]

Lastly, it mentions that 2- and 3-wheeled plug-in vehicles are eligible for the credit (on page 1250), with the minimum battery capacity for such vehicles reduced from 10kWh to 2.5kWh and adding a minimum speed of 45mph. So potentially good news for Aptera and the various electric motorcycle companies (if I'm reading it right).

Arcimoto is a local company who produces a “Fun Utility Vehicle”, a 3 wheeled tandem town car/ scooter thing. It looks like it will be eligible for about $5500 in subsidies which makes me quite happy. That means I might be able to pick one up for right around $12k. I should be able to roll that sucker right into the bed of the Cybertruck.

 

[voxel]

I would agree these charges are non-negotiable, but dispute the "by law" aspect - source?

Ok, I'm wrong.

The only law is the Moroney label that must list the destination charges. All manufacturers currently apply the same destination fee (for every class of vehicle they make - the fees differ between carmakers) no matter if the car is bought in LA or Miami or NYC ("equalization delivery") including Tesla except they have an addition transport fee for inventory cars.

 

[Spam2Yam]

maybe it will be point of sale based starting jan 1 2022 and a tax credit for deliveries may 24th 2021 -

 

[zikronix]

Y’all owe 7500.00 in taxes? It’s a tax credit. Not a refund or rebate.

 

[rjpjnk]

You don't have to owe anything. It's just counting total tax liability.

 

[jsmay311]

Y’all owe 7500.00 in taxes? It’s a tax credit. Not a refund or rebate.

It's right there in the title of the section on page 1240, line 11:

"SEC. 136401. REFUNDABLE NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CREDIT FOR INDIVIDUALS"

And, yes, I'm pretty sure the vast majority of Tesla buyers have annual federal income tax liabilities exceeding $7500 anyway.

 

[zikronix]

It's right there in the title of the section on page 1240, line 11:

"SEC. 136401. REFUNDABLE NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CREDIT FOR INDIVIDUALS"

And, yes, I'm pretty sure the vast majority of Tesla buyers have annual federal income tax liabilities exceeding $7500 anyway.

I missed that. Thanks!

 

[Ogre]

Looks like 8K is right for now.....

Under the currently available bill for reading:

https://www.congress.gov/bill/117th-congress/house-bill/5376/text (dated yesterday, 9/27)

Search for "vehicle credit for individuals" or "136401" to find the paragraphs about EV rebates

The rebate is $7500 for most normal EVs (battery over 50KwH)

Plus $500 for domestic content (including the requirement that the batteries are made in the US. Where are LFP batteries for the M3 made?)

Plus $4500 if built in a union plant.

So looks like currently it's $8,000 for Teslas that come in under the price cap (3s and Ys) and have US-made batteries).

A few other tidbits:
- Purchased after Dec 31, 2021
- There are incentives (basically up to $2500) for purchasing a used EV
- You can do it for multiple EV purchases in a year
- The credit starts decreasing after a joint income of $800,000 (or $400,000 for an individual)
- It appears a dealer can reduce the price they charge you by the amount of the credit, and the government will send the credit to them (that's how I read it, but some reference to other laws that I didn't follow). If so that means buyers get the credit immediately on purchase. Looks like that would not reduce the sales tax, since it is treated as a "down/partial payment"
- I don't know how to find where Tesla is in fact eligible because I don't see the wording that gets rid of the 200,000 vehicle limit. But every press article I read seems to think that's true

I’m pretty sure this is completely separate from the existing legislation with the 200,000 vehicle limit. There is a clause in here which prevents double dipping, but this does not eliminate the old one.

The way I think it’s going to work is companies that haven’t shipped 200k vehicles will still be able to continue claiming their vehicles under the previous legislation. So Rivian and Ford will be able to continue shipping trucks for $85-90k under the old legislation claiming $7500. They can’t claim them under *both*, but it seems like will be able to use both incentives at the same time.

So Ford sells a Mustang for $50k, it gets goes under this incentive. They sell a F150 Lariat Extreme for $95k, they can claim it under the old rule and collect $7500 and deduct 1 vehicle from their 200k quota…

Someone correct me if it’s less stupid than this, but that’s the way I read it.

 

[jsmay311]

I’m pretty sure this is completely separate from the existing legislation with the 200,000 vehicle limit. There is a clause in here which prevents double dipping, but this does not eliminate the old one.

The way I think it’s going to work is companies that haven’t shipped 200k vehicles will still be able to continue claiming their vehicles under the previous legislation. So Rivian and Ford will be able to continue shipping trucks for $85-90k under the old legislation claiming $7500. They can’t claim them under *both*, but it seems like will be able to use both incentives at the same time.

So Ford sells a Mustang for $50k, it gets goes under this incentive. They sell a F150 Lariat Extreme for $95k, they can claim it under the old rule and collect $7500 and deduct 1 vehicle from their 200k quota…

Someone correct me if it’s less stupid than this, but that’s the way I read it.

The text released on 10/28 has a section on page 1258 titled "REPEAL OF NONREFUNDABLE NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CREDIT".

The legalese can be hard to follow, but I'm pretty sure that "nonrefundable" credit referred to is the current one, and this says it will be repealed and replaced with the new refundable credit.

 

[Ogre]

The text released on 10/28 has a section on page 1258 titled "REPEAL OF NONREFUNDABLE NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE CREDIT".

The legalese can be hard to follow, but I'm pretty sure that "nonrefundable" credit referred to is the current one, and this says it will be repealed and replaced with the new refundable credit.

Wow, that would be pretty savage for Rivian buyers, I know a lot of the early orders are over the $74k pickup limit.

Rivian better get cranking on their production. 1/ day isn’t going to cut it if their customers are losing $7500 after the first of the year.

 

[doomsday997]

Remember this is just a framework so details can still change and modifications made. That being said it looks like all the massive cuts were made and EV tax incentives survived, so IF a reconciliation bill does indeed pass looks like credits will certainly be a part of it

 

[Darmie]

... And when will this be law? Seeing the bias this administration has towards Tesla, I don't think we'll see any of it. They surly don't want to aid selling any Tesla vehicle.

 

[bro1999]

... And when will this be law?

Need to ask Joe Manchin, Kyrsten Sinema, and the House progressives.

 

[doomsday997]

... And when will this be law? Seeing the bias this administration has towards Tesla, I don't think we'll see any of it. They surly don't want to aid selling any Tesla vehicle.

If it becomes law it will have to be within the next few weeks, after that they will have to focus on the budget and debt ceiling which has to be taken care of by December 4th or the govt will shut down and we will default. Then starting January we go officially into election season which would greatly hurt the bills chances. It’s pretty much now or never.