US Federal $7,500 Electric Vehicle Credit Expiry Date By Automaker

[R.S]

Yah, although with the proposed legislative extension to the EV credit, maybe not...

The one where Democrats propose 10 more years of unlimited tax credits? You know who is in charge of congress and senate right now? Maybe after the midterms, but this proposed bill will not be passed.

I'm almost a bit annoyed why they even propose something as unpopular as this. Maybe to make a better deal later? We need a discussion about the stupidity of fixed 200k per OEM. Maybe replace it with a fixed number of total cars, that Republicans can live with, something equivalent in cost. Maybe a total of 2 million and then a phaseout like today.

When will we know for sure whether the 200k sale was reached in Q2 or not?
(Given that Tesla so far has done their utmost to help implement the government's chosen subsidy policies, reaching 200k in Q2 would be a serious mismanagement of resources).

I am interested as a non-US person because I expect the Model 3 export to start only after the tax credit has been cut in half, and likely only take off for real once it is down to 25%.

Btw, as a reservation holder in Germany I have mixed expectations about the start of deliveries here. I expect German reviewers to literally orgasm over even the tiniest of panel gaps,(*) so I expect German sales to start only when the build quality is top notch. Which in one sense is good. On the other hand, I still hope for the promised delivery in 'Early 2019'.

(*) I couldn't find it, but somewhere in there must be a pun regarding a Freudian slit.

Reservation holder in Germany here, too. But I have family in the US with 2 reservations, one of them for a base 3, so I can wait a bit longer, if it means they can get the full, or a higher partial credit.

 

[Daniel in SD]

I'm almost a bit annoyed why they even propose something as unpopular as this. Maybe to make a better deal later? We need a discussion about the stupidity of fixed 200k per OEM. Maybe replace it with a fixed number of total cars, that Republicans can live with, something equivalent in cost. Maybe a total of 2 million and then a phaseout like today.

That would make the most sense and it would benefit GM and Tesla the most which are both US companies. Maybe Tesla can create a spinoff company "Tesduh" to get another 200k

 

[Thunder7ga]

The current administration is all about America first, why not update the EV program to remain 200k for non-American built vehicles, but make it UNLIMITED for American made ones?

 

[gaswalla]

You all know that the Tesla Model 3 is the only truly American made pure-EV vehicle.. The Chevy Bolt is primarily made in South Korea, with final assembly in the US

 

[ℬête Noire]

You all know that the Tesla Model 3 is the only truly American made pure-EV vehicle.. The Chevy Bolt is primarily made in South Korea, with final assembly in the US

Tesla still imports in some parts, that's just the reality of modern manufacturing of complex products, but yeah, the Bolt control, info-entailment, and power systems, powertrain, really just about everything with electricity flowing through it is import parts. From what I've been able to dig up the Bolt is well above average for imported parts, and that's not particularly surprising since all the core design was done by GM's Korea arm (GMDAT). The Bolt body is based off a heavily modified GMDAT Aevo body (sold as Sonic in NA).

 

[T34ME]

I've decided to add to the debate. A few months ago, 'someone' from Customer Service told me that Elon and upper management was keeping a very close eye on the 200K expiry to take advantage of a full 6 months of the $7500 credit phase out. Consequently, I think the 200K threshold was not reached in June unless there was some colossal error in math or accounting........and someone's head will role.

 

[Knightshade]

there are only two options.

1. Tesla is above 200k

2. Insideevs has missed something big

They're well aware of what they might have missed. They mention it in the article itself

If Tesla chose to re-schedule or delay most of the deliveries planned for the last week of June, it might have been possible to push back the 200,000th sale to July. Unless the buyer reports the change there is no way for us to know it has occurred. So our traditional estimate methods may not apply if Tesla has taken this action

There's been many indications this is exactly what Tesla did, specifically to avoid hitting 200k.

 

[vigge50]

Well, apparently Tesla could have delivered number 200,000 in June without starting the counting. IRC don’t count the day the car is sold to a customer but the day the car is written on the customer wish can be several days och weeks later. The good thing about this is that maybe Tesla delivered number 200 000 in June but it was counted in July. The bad thing is that you can take delivery in late December with the knowledge that the tax credit get cut in half by the new year but if it takes until January before IRS register your car you will only get $3750. This feels like a big mess.

11,362 Estimated Tesla Deliveries, IRS Language On 200k Unclear

 

[Thomas Edison]

Well, apparently Tesla could have delivered number 200,000 in June without starting the counting. IRC don’t count the day the car is sold to a customer but the day the car is written on the customer wish can be several days och weeks later. The good thing about this is that maybe Tesla delivered number 200 000 in June but it was counted in July. The bad thing is that you can take delivery in late December with the knowledge that the tax credit get cut in half by the new year but if it takes until January before IRS register your car you will only get $3750. This feels like a big mess.

11,362 Estimated Tesla Deliveries, IRS Language On 200k Unclear

 

[mongo]

Well, apparently Tesla could have delivered number 200,000 in June without starting the counting. IRC don’t count the day the car is sold to a customer but the day the car is written on the customer wish can be several days och weeks later. The good thing about this is that maybe Tesla delivered number 200 000 in June but it was counted in July. The bad thing is that you can take delivery in late December with the knowledge that the tax credit get cut in half by the new year but if it takes until January before IRS register your car you will only get $3750. This feels like a big mess.

11,362 Estimated Tesla Deliveries, IRS Language On 200k Unclear

You're only looking at the buyer 'acquire' side.
The OEM 'sold' side can (and likely is) different. The OEM has to count sales to retail dealerships. There is no acquiring at that point.

Good article covering a lot of the nuance. Although, it seems to be ignoring whether title transfer is retroactive to sales date (vs paperwork completion date).

 

[FlatSix911]

Well, apparently Tesla could have delivered number 200,000 in June without starting the counting. IRC don’t count the day the car is sold to a customer but the day the car is written on the customer wish can be several days och weeks later. The good thing about this is that maybe Tesla delivered number 200 000 in June but it was counted in July. The bad thing is that you can take delivery in late December with the knowledge that the tax credit get cut in half by the new year but if it takes until January before IRS register your car you will only get $3750. This feels like a big mess.

11,362 Estimated Tesla Deliveries, IRS Language On 200k Unclear

The Bottom Line is Tesla delivered 11,362 vehicles in June, and 205,383 to date in the US... the final interpretation is now up to the IRS

Our tentative determination:
Steven and I still aren’t 100% convinced that Tesla would knowingly cross this threshold for a mere 5,000 units sold. So we chose to hold off on publishing the numbers in our sales chart and reached out to Tesla for comment. Despite getting in touch with Tesla more than once, we never received a confirmation. But we also were not given a denial or correction as would usually happen.

If this interpretation is correct, then we believe Tesla passed 200k sales in June. But, if the IRS may not consider the vehicle to be legally ‘sold’ or ‘acquired’ until the title transfer is complete, it could mean Tesla did NOT trigger the rebate phase-out period.* If this interpretation is not correct, keep in mind that historical estimates going back 7+ years will not be 100% accurate. So even though our quarterly numbers seem to have panned out as we expected them to, Tesla may not have crossed 200,000 sales.

 

[R.S]

Well, apparently Tesla could have delivered number 200,000 in June without starting the counting. IRC don’t count the day the car is sold to a customer but the day the car is written on the customer wish can be several days och weeks later. The good thing about this is that maybe Tesla delivered number 200 000 in June but it was counted in July. The bad thing is that you can take delivery in late December with the knowledge that the tax credit get cut in half by the new year but if it takes until January before IRS register your car you will only get $3750. This feels like a big mess.

11,362 Estimated Tesla Deliveries, IRS Language On 200k Unclear

That's the theory, there has still been no comment from Tesla, if they crossed 200k, or not. If it's really like described in the article, there will be a lot of confusion and angry people.

I don't currently live in the US and haven't bought my S there, but can you, if you buy in December, claim your tax credit for that year? If you can, then I would doubt that the idea, this article proposed, is true. Because then you could claim your full tax credit in December, even though the car would be counted as a January car.

 

[mongo]

The Bottom Line is Tesla delivered 11,362 vehicles in June, and 205,383 to date in the US... the final interpretation is now up to the IRS

No.....that is their made up bottom line, not THE bottom line (I know, figure of speach, but next to single digit precision...)

Without the Canada numbers, they can't determine the US numbers.

Without clarity of the impact of government/ municipal sales (non-taxpayer) then cannot say how many US sales count.

Also not clear: status and quantity of cars sold in the US for shipment to unsupported countries.

It is also possible Tesla bought their own cars for use as demos in states they cannot have dealerships. These would be for resale and also may not count.

If Tesla has not confirmed passing 200k, it indicates (to me) they believe they have not, but are waiting on official word. It would be really strange for them to tell the IRS, "we sold 205k, but you tell us if we didn't."

 

[xyeahtony]

The Bottom Line is Tesla delivered 11,362 vehicles in June, and 205,383 to date in the US... the final interpretation is now up to the IRS

\

Unless it comes from the IRS, or Tesla, it is not the bottom line and all speculative. Delivery numbers and estimates by these blog sites are all guesses. These websites are all preying on people's uncertainty and creating clickbait.

 

[Autolycus]

Uggg.. wrt the InsideEVs piece, as an attorney I am highly annoyed by pieces that are providing something that looks and feels like legal analysis but that does not actually quote or cite the relevant statutory and regulatory language. The IRS website might be a useful source of information, but there is no point in trying to interpret statements on it without first considering the actual law.

 

[wdolson]

I looked at the IRS page on this:
Plug In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service

The key passage for determination is:
"For purposes of the 30D credit, a vehicle is not considered acquired prior to the time when title to the vehicle passes to the taxpayer under state law."

There is also a FAQ about the 2009 tax law that started the EV credit. There are several questions about the EV credit at the bottom of the page:
Energy Incentives for Individuals: Questions and Answers | Internal Revenue Service

It clarifies that the time for the credit is when title transfers, not when the contract is signed. Some people who bought their cars on Dec 31 some years may have claimed the credit in the wrong year, but the IRS may have decided to look the other way.

The laws vary by state, but here is a generic page about title transfers:
Changing Vehicle Ownership: Why Title Transfers Matter | DMV.ORG
https://www.dmv.org/articles/changing-vehicle-ownership-why-title-transfers-matter/
Under normal circumstances I think Tesla transfers titles the next working day after a delivery, but they may have slow walked end of the month deliveries so they are filing the paperwork for transfer on a bunch of cars this week.

Also some people in countries where Tesla does not sell cars have bought cars in the US and shipped them to their countries. I believe director peter Jackson exported the first Model S to New Zealand. Under the regulation, cars that are not put into service in the US, but sold in the US do not qualify.

Some people who bought EVs in the US did not claim the credit. For example people with largely tax free incomes who bought their car out of savings would not owe enough tax to bother with the credit. It's unclear whether unclaimed credits count against the 200K or not. If they don't, that may have lowered the number of cars sold under the program.

Privately exported cars may have lowered the limit a little, but I suspect Tesla was probably able to skate in just under the limit by slow walking title transfers at the end of June to the limits of state law in each state. That may have kept them just under the limit with the IRS until this week.

We won't know for sure until Tesla says something about it and o far they have been quiet. They may be waiting for some kind of certification from the IRS.

 

[mongo]

I looked at the IRS page on this:
Plug In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service

The key passage for determination is:
"For purposes of the 30D credit, a vehicle is not considered acquired prior to the time when title to the vehicle passes to the taxpayer under state law."

There is also a FAQ about the 2009 tax law that started the EV credit. There are several questions about the EV credit at the bottom of the page:
Energy Incentives for Individuals: Questions and Answers | Internal Revenue Service

It clarifies that the time for the credit is when title transfers, not when the contract is signed. Some people who bought their cars on Dec 31 some years may have claimed the credit in the wrong year, but the IRS may have decided to look the other way.

The laws vary by state, but here is a generic page about title transfers:
Changing Vehicle Ownership: Why Title Transfers Matter | DMV.ORG
Under normal circumstances I think Tesla transfers titles the next working day after a delivery, but they may have slow walked end of the month deliveries so they are filing the paperwork for transfer on a bunch of cars this week.

Also some people in countries where Tesla does not sell cars have bought cars in the US and shipped them to their countries. I believe director peter Jackson exported the first Model S to New Zealand. Under the regulation, cars that are not put into service in the US, but sold in the US do not qualify.

Some people who bought EVs in the US did not claim the credit. For example people with largely tax free incomes who bought their car out of savings would not owe enough tax to bother with the credit. It's unclear whether unclaimed credits count against the 200K or not. If they don't, that may have lowered the number of cars sold under the program.

Privately exported cars may have lowered the limit a little, but I suspect Tesla was probably able to skate in just under the limit by slow walking title transfers at the end of June to the limits of state law in each state. That may have kept them just under the limit with the IRS until this week.

We won't know for sure until Tesla says something about it and o far they have been quiet. They may be waiting for some kind of certification from the IRS.

That is the key passage for purchasers.
The key passage for Tesla is

.05 Quarterly Reporting of Sales of Qualified Vehicles. A manufacturer (or, in the case of a foreign vehicle manufacturer, its domestic distributor) that has received an acknowledgment of its certification from the Service must submit to the Service, in accordance with section 6 of this notice, a report of the number of qualified plug-in electric drive motor vehicles sold by the manufacturer (or, in the case of a foreign vehicle manufacturer, its domestic distributor) to consumers or retail dealers during the calendar quarter. The quarterly report must contain the following:

(1) The name, address, and taxpayer identification number of the reporting entity.

(2) The number of qualified vehicles sold by the reporting entity to consumers or retail dealers during the calendar quarter.

(3) The make, model, model year, and any other appropriate identifiers of the qualified vehicles sold during the calendar quarter.

(4) A declaration, applicable to the quarterly report and any accompanying documents, signed by a person currently authorized to bind the manufacturer (or, in the case of a foreign vehicle manufacturer, its domestic distributor) in these matters, in the following form: “Under penalties of perjury, I declare that I have examined this report, including accompanying documents, and to the best of my knowledge and belief, the facts presented in support of this report are true, correct, and complete.”

By my reading, GM must declare the vehicles at the time of sale to the dealership. A wholly different time frame than when the vehicle is acquired from the dealership.
I also favor the concept that this excludes municipal and government sales (neither consumers nor retail dealers). US sales expressly for export are hazy, but Tesla would have worked that out with the IRS in previous quarters.

And yes, Tesla is undoubtedly (in my mind) waiting for the IRS confirmation on sub 200k sales in Q2.

.06 Acknowledgment of Quarterly Report. The Service will review the original signed quarterly report and issue an acknowledgment letter to the vehicle manufacturer (or, in the case of a foreign vehicle manufacturer, its domestic distributor) within 30 days of receipt of the report. This acknowledgment letter will state whether purchasers may continue to rely on the certification.

 

[ItsNotAboutTheMoney]

I looked at the IRS page on this:
Plug In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service

The key passage for determination is:
"For purposes of the 30D credit, a vehicle is not considered acquired prior to the time when title to the vehicle passes to the taxpayer under state law."

There is also a FAQ about the 2009 tax law that started the EV credit. There are several questions about the EV credit at the bottom of the page:
Energy Incentives for Individuals: Questions and Answers | Internal Revenue Service

It clarifies that the time for the credit is when title transfers, not when the contract is signed. Some people who bought their cars on Dec 31 some years may have claimed the credit in the wrong year, but the IRS may have decided to look the other way.

The laws vary by state, but here is a generic page about title transfers:
Changing Vehicle Ownership: Why Title Transfers Matter | DMV.ORG
https://www.dmv.org/articles/changing-vehicle-ownership-why-title-transfers-matter/
Under normal circumstances I think Tesla transfers titles the next working day after a delivery, but they may have slow walked end of the month deliveries so they are filing the paperwork for transfer on a bunch of cars this week.

Also some people in countries where Tesla does not sell cars have bought cars in the US and shipped them to their countries. I believe director peter Jackson exported the first Model S to New Zealand. Under the regulation, cars that are not put into service in the US, but sold in the US do not qualify.

Some people who bought EVs in the US did not claim the credit. For example people with largely tax free incomes who bought their car out of savings would not owe enough tax to bother with the credit. It's unclear whether unclaimed credits count against the 200K or not. If they don't, that may have lowered the number of cars sold under the program.

Privately exported cars may have lowered the limit a little, but I suspect Tesla was probably able to skate in just under the limit by slow walking title transfers at the end of June to the limits of state law in each state. That may have kept them just under the limit with the IRS until this week.

We won't know for sure until Tesla says something about it and o far they have been quiet. They may be waiting for some kind of certification from the IRS.

Here's the law:
26 U.S. Code § 30D - New qualified plug-in electric drive motor vehicles

The timing for calculation of the credit is acquisition, and acquisition is noted to depend on state law.
But the time when the clock begins is defined as being based on the _sale_ of qualified vehicles.
The definition of a qualified vehicle mentions:
- purchase for use, not resale
- use primarily in the USA
- acquisition

So, IANAL, but there is some potential weasel room in those.
As noted, some purchases were shipped overseas.
Some vehicles were purchased for resale. Could be costly to check title records to determine that, though.
And, if acquisition is required for qualification one could weasel that the sale of a qualified vehicle didn't actually happen until acquisition.

 

[FlatSix911]

No.....that is their made up bottom line, not THE bottom line (I know, figure of speach, but next to single digit precision...)

Without the Canada numbers, they can't determine the US numbers. Without clarity of the impact of government/ municipal sales (non-taxpayer) then cannot say how many US sales count. Also not clear: status and quantity of cars sold in the US for shipment to unsupported countries.

It is also possible Tesla bought their own cars for use as demos in states they cannot have dealerships. These would be for resale and also may not count. If Tesla has not confirmed passing 200k, it indicates (to me) they believe they have not, but are waiting on official word. It would be really strange for them to tell the IRS, "we sold 205k, but you tell us if we didn't."

The US total already accounts for the 2,250 vehicles delivered to Canada in June.
Why We Believe Tesla Passed 200k U.S. Deliveries in June

 

[mongo]

The US total already accounts for the 2,250 vehicles delivered to Canada in June.
Why We Believe Tesla Passed 200k U.S. Deliveries in June

I should have said offical numbers. From the Onatrio threads alone I'd guess over 3k at International Center.