Elon is well aware of how tax incentives effect demand for his cars. He has already announced that about March 2022 he will be delivering Plaid models to China. That market has gone over 2 years without S/X shippments, and the demand for prestigeous models is high over there. These models are priced well above the expected price caps for the incentives.
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Tesla EV Tax Credits coming back?
- Thread starter hnguy054
- Start date
I feel the entire argument about salary limits misses the forest for the trees. The goal of the legislation is to push EV adoption over ICE cars over a long timeframe. A rebate on EV cars is an effective way of achieving this. Irrespective of income levels, people are going to be incentivized to purchase an EV/PHEV (a nice gateway into a full EV) with such a policy in place. "Affordability" is a rather subjective term.
I'll offer myself as an example. Between my wife and I, we make more than enough to "afford" a Model Y or perhaps even a fancier car. But we drive 10+ year old cars because they work and are paid off and we choose to be more prudent with how we spend our money. There are others around us who probably make half our combined income who own less than 2 year old cars and even more expensive cars like the Model S / X. For them, affordability means something very different. For us, just because we have the money to spend on something, doesn't mean it is automatically affordable and worth spending on. At the end of the day, we're all on this planet this one time and people can choose to spend their money how they please and different people have different tolerance levels for how willingly they are going to part with their hard earned money on something that is more a splurge and less a necessity. The goal of the EV subsidy is to appeal to all of these folks. I'd probably wait several more years before taking the plunge with an EV if it hadn't been for the EV incentives being on the horizon. I'm sure I wouldn't be the only person in my situation.
As others have pointed out, the other side of the coin with boosting demand via this incentive is forcing manufacturers to respond with increased supply. The big automakers have been dragging their feet on EVs for a very long time and this will force them to respond. If you reduce the pool of people this subsidy applies to, you minimize the impact on demand and thus the impact you can exert on the supply curve as well.
Personally, I'm fine with the larger limits on income as long as they limit the dollar amount on the MSRP for vehicles eligible for the subsidy. At the end of the day, the M3 and MY are Tesla's entry-level offerings and you need the MSRP limit to capture these high volume EV vehicles from Tesla and other manufacturers so the policy can provide some meaningful long-term benefit.
I'll offer myself as an example. Between my wife and I, we make more than enough to "afford" a Model Y or perhaps even a fancier car. But we drive 10+ year old cars because they work and are paid off and we choose to be more prudent with how we spend our money. There are others around us who probably make half our combined income who own less than 2 year old cars and even more expensive cars like the Model S / X. For them, affordability means something very different. For us, just because we have the money to spend on something, doesn't mean it is automatically affordable and worth spending on. At the end of the day, we're all on this planet this one time and people can choose to spend their money how they please and different people have different tolerance levels for how willingly they are going to part with their hard earned money on something that is more a splurge and less a necessity. The goal of the EV subsidy is to appeal to all of these folks. I'd probably wait several more years before taking the plunge with an EV if it hadn't been for the EV incentives being on the horizon. I'm sure I wouldn't be the only person in my situation.
As others have pointed out, the other side of the coin with boosting demand via this incentive is forcing manufacturers to respond with increased supply. The big automakers have been dragging their feet on EVs for a very long time and this will force them to respond. If you reduce the pool of people this subsidy applies to, you minimize the impact on demand and thus the impact you can exert on the supply curve as well.
Personally, I'm fine with the larger limits on income as long as they limit the dollar amount on the MSRP for vehicles eligible for the subsidy. At the end of the day, the M3 and MY are Tesla's entry-level offerings and you need the MSRP limit to capture these high volume EV vehicles from Tesla and other manufacturers so the policy can provide some meaningful long-term benefit.
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SageBrush
REJECT Fascism
ElectricIAC
Good-Natured Rascal
Right. So incentivize taking a heavy polluting vehicle off the road by offering an incentive toward a new EV or PHEV to someone who otherwise would not financially have that option.
Sounds pretty equitable to me.
ElectricIAC
Good-Natured Rascal
SageBrush
REJECT Fascism
That would be one path, but if would be the expensive one. The efficient mechanism is to improve the series of used car trades that culminate in one more EV on the roads and one less clunker.
Sing along with me, to the tune of 'the ankle bone is connected to the knee bone, the knee bone is connected to the hip bone ..."
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Lol. Grub hub? They definitely will cancel and many more just won’t order. Teslas and most good EVs aren’t cheap compared to a forester hybrid or something. $8,000 is a good chunk of change.
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I have an oder in NJ that still has the 2k tax credit with scheduled delivery in may. The total cost is 54.600. Standard wheels gray.
If I put it on hold, then I would lose the 2k NJ tax rebate. Based on the bill so far it looks like the credit could be as low as 4500. Is there a chance that the tax credit will be higher? would you wait or just purchase it based on my cost?
If I put it on hold, then I would lose the 2k NJ tax rebate. Based on the bill so far it looks like the credit could be as low as 4500. Is there a chance that the tax credit will be higher? would you wait or just purchase it based on my cost?
ElectricIAC
Good-Natured Rascal
How is it more expensive to target an incentive based on need/efficacy vs Yet another blank cheque tax loophole for those of us fortunate enough to be able to afford these cars irrespectively?
I’m making the argument for those who would consider an EV if not for financial constraints.
ElectricIAC
Good-Natured Rascal
They they never actually cared about cleaner air and shouldn’t expect the rest of us to foot the bill for their laughable attempt at virtue signaling.
ElectricIAC
Good-Natured Rascal
Your money to gamble with…
Knowing Tesla though, they’ll probably find some way to wiggle out of those orders people placed at cheaper MSRP’s and purposely delayed. I’d take the sure thing now.
Or those who can afford it, those for which it is an OPTION without the tax credit, and for which the credit is big enough to make the choice an EV.
The point is getting more EVs on the road, not make value judgements about who “deserves” something.
SageBrush
REJECT Fascism
@ElectricIAC , you have not responded to my question.
What is more important to you:
What is more important to you:
- Getting more EVs on the road
- Preventing 'undeserving' folks from getting a tax credit ?
ElectricIAC
Good-Natured Rascal
Combine both and incentivize further EV proliferation where it will make the most impact.
I thought I tried to explain that in the parent post? Large limits on net income removes a large pool of people from the eligibility pool, which drastically reduces the net impact such policy can exert on the demand side of things. This in turn limits the ability to boost manufacturing to increase supply to keep up with the demand. It isn't that incentives stop working to encourage demand even at the $150k - $500k income ranges. If anyone in that income bracket is looking to buy a $40k-$50k-ish SUV, they would still be incentivized to purchase an EV over an ICE vehicle. The goal here is to move as much of the population towards EVs as possible while also acting as a big stimulus to American EV manufacturing so they can remain competitive through this global transition. Constraining by income too much just isn't going to move the needle much.
pepperoni
Member
ElectricIAC
Good-Natured Rascal
The 150K+ HHI segment I know and deal with on a daily basis is going to buy the car they want, when they want it regardless of any carrot you put in front of them.
Lol. No kidding. That’s the whole point of the EV rebate. To get people that wouldn’t ever make the EV leap to make the jump.
why put it on hold if the delivery is in May 2022?
Not the ones I deal with, including myself. I drive a 10 year old Jeep and was planning on driving it for at least another 3 years but the EV rebate definitely influences my decision. And I am already a huge Tesla fan and I know my next car is an EV. EVs are rare around here and most people in my area won’t bother without an incentive.
Can’t assume your situation applies to all. Just because a family makes $150,000 doesn’t mean they can just buy whatever they want with compete disregard to the costs.
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