Tesla EV Tax Credits coming back?

[CowherPower]

Here's an interesting article which speculates about when the $12.5k EV credits might be passed.

While I would love to wait for a huge EV credit to come around soon on the Tesla Model Y that I have on order, I have no faith that this will happen anytime soon. This part of the article makes it pretty clear that one side of the aisle is clearly against EV credits...

When could the bill be passed?​

The bill currently has twenty-five co-signers, which aside from Independent Senator Angus King, are all Democrats. During the Senate Finance committee hearing, Republicans voiced their opposition and in the end, the measure on whether to bring the bill to a vote passed along a party-line vote.

Senator Lindsey Graham of South Caroline argued that major us automakers have already stated that by 2035 their fleets will be electric adding that “To my Republican colleagues, it’s just a matter of time until most cars … will be running on something other than gasoline.” Senator Bill Cassidy of Louisiana argued that working-class families are not buying electric vehicles and that federal funds should not be used to subsidize consumers who do not need the support.

 

[schlacterdream]

Tesla is raising their prices because of basic economics- Law of supply and demand. They have far more demand for their Teslas than they can make. So they raise prices. The tax credit will only increase demand. Michael Eisner, former CEO at Disney said it best. We will keep raising our prices 10% until attendance falls off by 10%.

People should stop depending on the government to save them. If you need the government to help pay for a Tesla then you shouldn't be buying a Tesla. There are plenty of good reasons to buy a Tesla if you can afford one, but FOMO is a fools errand.

It is not just about Tesla demand, while thst is partially responsible, biggest issue is significant shortage in chips causing price hike thst then companies have to pass to consumers. So essentially price hike plus delivery delays as a result.

 

[OCJeff]

Not really Tesla related, but a good friend of mine has been selling Nissan for 30 years. They are not allowed to even sell cars for MSRP. They must charge $3-10k over MSRP. Even friends and family they can‘t sell for less than MSRP.

Crazy times and Tesla can’t sell for over list price so they have just been increasing list.

 

[Hexo09]

one side of the aisle is clearly against EV credits...

Fixed.

 

[Zorg]

I hadn't watched the video of the session, just read the pertinent parts of the PDF files in the links. I watched some of the proceedings this morning and found some of it rather humorous. Like the question from Sen Langford who asked if Union workers make EV's with lower carbon footprint than non-union workers, or why is there a $2500 bonus for union workers? I was thinking maybe I should ask my senators to propose a $2500 bonus for NRA members.

Clearly, each side knows how to pander to their voters.

 

[CyberTorque]

I would expect significant price increases if a Tesla purchase has a refundable $10,000 tax incentive. Probably $5K or more, even though I feel like that should not be allowed. Tesla changes their prices based on the direction the wind is blowing these days.

Price increase but add/delete features: air suspension, AutoPilot will be optional, tow hitch on all models, add homelink (again.).

 

[patmurphey]

The only way any of this will pass is if it is part of an omnibus bill rammed through the Senate with reconciliation, sadly. It's also true that new credits will be nothing but a windfall for Tesla, already selling every car they can build, and with upcoming manufacturing savings they wont have to lower prices.

But, no matter what credits will accelerate the adoption of EVs by those who haven't been able to afford them to date.

 

[doomsday997]

The only way any of this will pass is if it is part of an omnibus bill rammed through the Senate with reconciliation, sadly. It's also true that new credits will be nothing but a windfall for Tesla, already selling every car they can build, and with upcoming manufacturing savings they wont have to lower prices.

But, no matter what credits will accelerate the adoption of EVs by those who haven't been able to afford them to date.

Exactly this bill will be filibustered in the senate for sure, you can see this from the party line committee vote. Only way it can pass is through reconciliation which is far from assured. Honestly the non refundable credit kind of sucked anyway, unless you owed you got nothing.

 

[Roy2001]

The bill proposed is only for EVs less than $80,000. The base MX is $89,990 and will not qualify. There isn't even a purchase price phase out, so it qualifies for $0.

You can 100% delay order for 90 days. If you email [email protected] then they may work with you depending on your situation.

Thank you for info!

I think Tesla can disable the Autopilot feature on MX and charge for $79k, then ask $10k to enable that. Or restrict range to 200 miles for $10k less, than buyers can buy the extra range later on.

 

[sgalla04]

Thank you for info!

I think Tesla can disable the Autopilot feature on MX and charge for $79k, then ask $10k to enable that. Or restrict range to 200 miles for $10k less, than buyers can buy the extra range later on.

That’s awesome if they will do that. I know they released a limited range M3 in Canada so they could be under their federal limit. And then buyers can pay for the range upgrade later.

I haven’t heard of Tesla doing that in the US. Maybe they will do something similar if Teslas begin to qualify again. And I haven’t heard Autopilot as a $10,000 option. I know FSD is $10,000. But that’s great if they’ll do that too!

 

[TravelFree]

And I haven’t heard Autopilot as a $10,000 option. I know FSD is $10,000. But that’s great if they’ll do that too!

EAP was $4000 when it was separate.

The problem with doing the add-ons later is most buyers of expensive cars are so wealthy they don't need the tax credit because they have tax attorneys who can protect their income from high taxes in other ways, Those who want a Model X and are not super wealthy, do so with financing and they need to include the options in the price of the car as they don't have $10k stuffed under the mattress.

 

[PatrickTM]

It is not just about Tesla demand, while thst is partially responsible, biggest issue is significant shortage in chips causing price hike thst then companies have to pass to consumers. So essentially price hike plus delivery delays as a result.

Yeah, chip shortages are definitely a problem.

I just watched this short documentary last night, and though current chip shortage is a problem, there is a shortage of just almost everything right now. This has been a problem in the making for decades, Covid was just the match that lit the gasoline, so to speak.

 

[SageBrush]

The problem with doing the add-ons later is most buyers of expensive cars are so wealthy they don't need the tax credit because they have tax attorneys who can protect their income from high taxes in other ways

How about those people who just want a discount on the car price, unrelated to whether payment is now or later ?
I know I fall in that group, and I don't have a tax attorney in my pocket nor do I finance.

 

[TravelFree]

How about those people who just want a discount on the car price, unrelated to whether payment is now or later ?
I know I fall in that group, and I don't have a tax attorney in my pocket nor do I finance.

Depends on what you are willing to give up to get that discount. Timing is everything. If the Government tax credit comes I'll take it like the rest, but presently, all I wanted to wait for is the new center console on the Model Y. Now those who wait for the Tax credit will not only be paying a couple thousand more, but also may have to pay $4000 more for FSD. Plus the new MY no longer have lumbar adjustments in the passenger seat. Loss of RADAR too which may be a moot subject if Tesla decides no RADAR is better based on the testing. All we really know is what is for now.

I also have to respect that some people work really hard to make the money they have earned. I decided to just go for the FSD option because the cash to buy it came pretty easy with a couple of trades in the stock market. I'm retired and live off SS income so the extras comes only when I make the easy money. Then I have to decide- do I get more satisfaction with FSD or a new car, or do I just let it ride on my balance sheet. Once a person has enough, making more and more is just greedy. At some point the numbers in the Roth IRA doesn't add to the quality or fun in life. Spending a little of it is more important.

 

[SageBrush]

Depends on what you are willing to give up to get that discount.

I am not looking for financial planning advice, but thanks.
My post was meant to point out that you skipped a large group of potential buyers who do not have to finance but will decide to buy based on tax credits.

 

[baron 619]

My theory about the tax credit is that it will pass since the Ford Lightning was announced. They won't pass it simply to benefit Tesla, but instead pass it to benefit an American company with one of the best selling trucks in the country. I will say though that Ford should already be eligible for a tax credit already but this bill just enhances that and helps with sales overall. Just my opinion.

 

[Spidey616]

My theory about the tax credit is that it will pass since the Ford Lightning was announced. They won't pass it simply to benefit Tesla, but instead pass it to benefit an American company with one of the best selling trucks in the country. I will say though that Ford should already be eligible for a tax credit already but this bill just enhances that and helps with sales overall. Just my opinion.

Ford is eligible for the current $7500 credit as they hadn’t exceeded the number threshold. However since they are union the current text would have the rebate be $10k.

 

[sgalla04]

Ford is eligible for the current $7500 credit as they hadn’t exceeded the number threshold. However since they are union the current text would have the rebate be $10k.

Actually Ford would qualify for the full $12,500 since the most recent bill has an additional $2,500 for American Made. If this were to pass as written.

The chairman’s mark of the Clean Energy for America Act is available here, and modifications to the chairman’s mark are available here.

 

[ToasterStrudel]

From what I know, these types of tax incentives are typically applicable to an entire tax year, as that’s much simpler than a specific date it’s passed. So if it passes in next 3 months(ish), it would most likely apply to 2021 taxes but if it passes at the end of the year it would probably only start in 2022.

I would bet it passes and relatively soon, applying to all of 2021 purchases.

This would be so great

 

[sgalla04]

This would be so great

I don’t disagree with @CPisHere but his post was earlier in the year. The most recent bill that has passed through committee, if approved as written, will apply to Teslas purchased under $80,000 after May 24, 2021 as a $7,500 non-refundable tax credit and on Jan 1, 2022 as a $10,000 refundable tax credit.

Other American manufacturers who use union labor qualify for another $2,500.