Tesla EV Tax Credits coming back?

[CowherPower]

What if the law doesn’t pass?

Exactly this. There's no reason to think that passage of these expanded credits is a done deal. In fact, the Republicans have proposed to add a federal tax surcharge for EV owners, a tax that Biden has flat out rejected.

That's a very valid scenario...then I would be losing $2000 I would have paid on renting the car...With the upshot being $7500 pay out I am thinking of taking the gamble...Just wondering if the situation is as simple as this or am I not thinking through...

Also - I wouldn't want to pay down the loan if I can get it financed at <2% and if the inflation for the next couple of years stays above it (and I can invest it 'wisely')...

Personally I think it's way too risky to rent a car on the expectation that something will pass in your favor in the near term. Betting on action by Congress is fool's gold. While I do believe some sort of bill will pass by the end of the year to re-activate a tax credit on a Tesla purchase, it's still very much up in the air on whether that bill will be retroactive to May 24th. I can easily see the language of the bill getting knocked down during negotiations to save money by changing it so it's only good from the day of signing rather than retroactive.

I decided not to wait. I took delivery a few days ago and have been having a blast with my new Model Y. If a bill passes in the next three months that restores a non-retroactive credit I will obviously be sad, but I suspect by that time I will have spent enough time in my new car that I will probably be OK with my decision.

By the way, here's a picture of my new wheels.

 

[Tha_Ape]

I am not hinging my car buying decision on a law that may or may not pass. If thats the deciding factor, you should really consider another car. I will consider it a nice bonus if it passes and its retro active, but the all of these supply issues with mircochips etc, Prices keep going up and they're taking stuff out of cars. So you may end up getting a tax break, but you also might pay more and get less. I didnt feel like gambling.

 

[OB1Kenobi]

Who knows what lawmakers will do? They can pass it or not pass, it could be retroactive or not, if it's retroactive, from what date? Too many unknowns in play, and you should make money decisions based upon the best available data and evidence. I would never spend $2000 based on faith in our federal legislature, that's for sure. I would only do so if the bill had already passed the Senate and House, Biden had committed to sign it, and the only way you would get the money would be to delay your delivery. Outside of that, you're just gambling. If you went to Vegas and gambled away two grand playing blackjack, would you be upset? If yes, then don't spend it. If you end up getting screwed because you took delivery before you could take advantage of a new tax break, you certainly won't be the only one...

 

[nate704]

Also, the biggest question should be if it will be "fully refundable" or not. If not not many people can qualify or not even close to benefit you.

 

[k.alexander]

From a very rough calculation, a married couple has to be making about $55k to have over $7,500 in fed tax obligations.
Remember, we're not talking about a situation where you usually get $7,500 or more in a refund at the end of the year, we're talking about where you owe $7,500 or more throughout the year in various fed income taxes.

 

[ElectricBro]

I am not hinging my car buying decision on a law that may or may not pass. If thats the deciding factor, you should really consider another car. I will consider it a nice bonus if it passes and its retro active, but the all of these supply issues with mircochips etc, Prices keep going up and they're taking stuff out of cars. So you may end up getting a tax break, but you also might pay more and get less. I didnt feel like gambling.

+1. Also, take into the fact that, the current pre-owned market has skyrocketed. Trading in your existing vehicle now can lock in your "profit" in selling your old car at a higher price.

It is highly possible that even if the new tax credit bill could be passed, by that time the chip shortage issue has been mitigated and the pre-owned market is cooled down, then you get much less in trading in your old car, which totally offsets the tax credit you gain.

 

[sgalla04]

+1. Also, take into the fact that, the current pre-owned market has skyrocketed. Trading in your existing vehicle now can lock in your "profit" in selling your old car at a higher price.

It is highly possible that even if the new tax credit bill could be passed, by that time the chip shortage issue has been mitigated and the pre-owned market is cooled down, then you get much less in trading in your old car, which totally offsets the tax credit you gain.

When I was showing off my new MY to my family on Father’s Day I said, “my used car went up $3,000 since March and the Tesla sticker price went up $2,500 (+$200 in sales tax) since I ordered it. So I basically “saved” $5,700.”

My brother-in-law said, “I can’t believe you didn’t buy 2 Teslas by that logic!!” Haha.

 

[PatrickTM]

From a very rough calculation, a married couple has to be making about $55k to have over $7,500 in fed tax obligations.
Remember, we're not talking about a situation where you usually get $7,500 or more in a refund at the end of the year, we're talking about where you owe $7,500 or more throughout the year in various fed income taxes.

You're on the right track but a bit off on the calculations. You need a federal income tax liability of $7,500, not total federal tax liability. Your calculation included FICA (Social Security and Medicare), which is not part of the EV tax credit program.

A married couple filing jointly needs to make $91,000 of taxable income in 2021 under current tax rates to owe $7,500 of federal income tax, and be eligible for the full refund.

 

[k.alexander]

You're on the right track but a bit off on the calculations. You need a federal income tax liability of $7,500, not total federal tax liability. Your calculation included FICA (Social Security and Medicare), which is not part of the EV tax credit program.

A married couple filing jointly needs to make $91,000 of taxable income in 2021 under current tax rates to owe $7,500 of federal income tax, and be eligible for the full refund.

Excellent, thank you for the correction!

 

[Viv1984]

Hey guys! Looking for some advice. I'm looking at getting a Model Y in the near future. I was planning on buying one earlier this year and already put the $100 for the price lock, but then the tax credit new broke and I decided to wait a little bit to see if it passes. I got my car valued at about $15.5k trade in and in CA we get $1500 plus another $4k for my county. I'm currently spending about $80 a week in gas and it's probably going up to $100-$120 range soon between returning to work in person and things opening back up. I also have solar at home, so I'm guessing electricity costs will be minimal. Is it worth putting in the order now or waiting to see if it passes? I'm guessing if I order in the next week or two, delivery wouldn't be until September at the earliest and I can hope the bill has been voted on by then.

On a side note, I'm excited for this. I've always owned sedans (Civic, Altima, Maxima), this will be my first crossover.

Thanks!

 

[Schulz1983]

Hey guys! Looking for some advice. I'm looking at getting a Model Y in the near future. I was planning on buying one earlier this year and already put the $100 for the price lock, but then the tax credit new broke and I decided to wait a little bit to see if it passes. I got my car valued at about $15.5k trade in and in CA we get $1500 plus another $4k for my county. I'm currently spending about $80 a week in gas and it's probably going up to $100-$120 range soon between returning to work in person and things opening back up. I also have solar at home, so I'm guessing electricity costs will be minimal. Is it worth putting in the order now or waiting to see if it passes? I'm guessing if I order in the next week or two, delivery wouldn't be until September at the earliest and I can hope the bill has been voted on by then.

On a side note, I'm excited for this. I've always owned sedans (Civic, Altima, Maxima), this will be my first crossover.

Thanks!

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.

 

[PNWLeccy]

I think our plan is to sell or trade in our 2018 M3 LR RWD since it is going for more than we paid for it 2 years ago. We're going to get the Model Y as it'll be better insulated from depreciation, even if/when the tax credit passes. I think there will be more demand for newer models w/ heat pump and crossovers, in general, than holding on to the M3.

It's a delicate balance of weighing the current value of our M3 with the rising prices of MY and a possible tax credit. In the end, this might not be the perfect timing but I'd also hate if the M3 dropped back to where it was a few months ago (-$6-7k) and the MY continued it's semi-regular price increases while no credit passes. I'm kicking myself that I didn't order the MY earlier to lock in the price when it was at $49k but if I buy now, I'm still better off by about $3-4k than I was just months ago.

 

[fayeznajeeb]

I think our plan is to sell or trade in our 2018 M3 LR RWD since it is going for more than we paid for it 2 years ago. We're going to get the Model Y as it'll be better insulated from depreciation, even if/when the tax credit passes. I think there will be more demand for newer models w/ heat pump and crossovers, in general, than holding on to the M3.

It's a delicate balance of weighing the current value of our M3 with the rising prices of MY and a possible tax credit. In the end, this might not be the perfect timing but I'd also hate if the M3 dropped back to where it was a few months ago (-$6-7k) and the MY continued it's semi-regular price increases while no credit passes. I'm kicking myself that I didn't order the MY earlier to lock in the price when it was at $49k but if I buy now, I'm still better off by about $3-4k than I was just months ago.

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

 

[fayeznajeeb]

The day tax credit gets announced, I'm playing an order for MY! Cant wait.

 

[Schulz1983]

The day tax credit gets announced, I'm playing an order for MY! Cant wait.

The day tax credits get announced Tesla will raise the price $10k.

 

[sgalla04]

The day tax credits get announced Tesla will raise the price $10k.

The day tax credit gets announced, I'm playing an order for MY! Cant wait.

Yeah, not sure why you wouldn't put in an order now and place a hold. The price is just going to continue to rise.

 

[vijayk]

Personally I think it's way too risky to rent a car on the expectation that something will pass in your favor in the near term. Betting on action by Congress is fool's gold. While I do believe some sort of bill will pass by the end of the year to re-activate a tax credit on a Tesla purchase, it's still very much up in the air on whether that bill will be retroactive to May 24th. I can easily see the language of the bill getting knocked down during negotiations to save money by changing it so it's only good from the day of signing rather than retroactive.

I decided not to wait. I took delivery a few days ago and have been having a blast with my new Model Y. If a bill passes in the next three months that restores a non-retroactive credit I will obviously be sad, but I suspect by that time I will have spent enough time in my new car that I will probably be OK with my decision.

By the way, here's a picture of my new wheels.

Yeah I've decided to take the order this quarter ( fingers crossed Tesla can give me by then)...basically I'm assigning $5K for the pleasure of driving the car 3 months more thanks all for the comments...

 

[Mrkrazyk]

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

 

[eleven24]

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

Speaking on extending the EV tax credits Senator Cornyn of Texas said, "This is a frontal assault on my state. This is an ideological jihad against the status quo... where many jobs in our country depend on the oil and gas sector". With the division in politics today, and the collective hive mind of each side this statement is enough for me to not base my Tesla purchase on the hopes of the EV credit returning.

I put my order in this past weekend. If the EV credit is available to me I'll be stunned, but happy. If it becomes available but I missed out, I'll be disappointed but happy that it helps the environment at EV market.

Honestly though, I don't see it happening any time soon.

 

[k.alexander]

A Texas Republican senator being anti-EV does not surprise me.

Again, my personal opinion, which is completely speculative, as I do not work or have connections on the Hill, is that 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.

If anyone wants to weigh in on the opinion above, especially if you have a better understanding of what's going on with the bills over the last week or two (seems like nothing much), I would welcome the input.