Tax Credit Amendment

[mrodriguez]

Non-binding amendment added to Senate budget bill which would drastically alter tax credit. Not official changes at this point, but something to watch.

https://arstechnica.com/cars/2021/08/senate-votes-to-restrict-ev-tax-credits-despite-climate-crisis/

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[sevengroove]

Wow, I'm definitely conflicted with this. On one hand, it's great that they're looking to divert more of the credit to lower income buyers. But I don't know if they got the cutoff points right. $100k in income and $40k max EV price? I don't think there's a single electric CUV/SUV on the market under that price point, and that is the most popular vehicle segment in the country.

Additionally, there is no indication that these caps will result in more money going to those who need it. If the net result is that the federal government is spending less on the EV tax credits, I would consider that a big fail.

And this is all before even taking into account that Rivians would not be eligible. A sliding scale of credits based on income and price would be far more appropriate in my opinion.

Edit: here's a hypothetical credit matrix.

Income below	EV Price Across
	<=$40,000	<=$60,000	<=$80,000	<=$100,000
<=$70,000/year	$10,000	$7,500	$5,000	$4,250
<=$100,000/year	$7,500	$5,000	$4,250	$3,000
<=$150,000/year	$5,000	$4,250	$3,000	$2,000
$150,000+/year	$1,500	$1,500	$1,500	$1,500

 

[mrodriguez]

Wow, I'm definitely conflicted with this. On one hand, it's great that they're looking to divert more of the credit to lower income buyers. But I don't know if they got the cutoff points right. $100k in income and $40k max EV price? I don't think there's a single electric CUV/SUV on the market under that price point, and that is the most popular vehicle segment in the country.

Additionally, there is no indication that these caps will result in more money going to those who need it. If the net result is that the federal government is spending less on the EV tax credits, I would consider that a big fail.

And this is all before even taking into account that Rivians would not be eligible. A sliding scale of credits based on income and price would be far more appropriate in my opinion.

I think you hit the nail on the head and the levels need adjusting. At this point in EV production there are simply not enough at $40k to choose from. Additionally $100k is really not all that much.

 

[Autolycus]

Oof. That'd be rough for me. I hope the House rejects this one.

 

[nfrank]

This is ridiculous. The purpose of the tax credit is to move people away from gas guzzlers to zero emission vehicles. The best selling vehicles in America (trucks) are mostly over $40,000 sales price and are the biggest polluters. If a vehicle is small and under $40k then the effect of the credit isn't as much.

The rebate should be based on battery size. That's what will match closely with what type of car the new EV is replacing. If someone wants a Leaf to replace their Camry then the rebate should be less. If someone replaces their old F-150 with a Lightning, then the rebate should be more. The tax payers will displace the most emissions for their money if they only based the tax credit on battery size.

 

[bigdogrod]

yeah i just quoted from electrek on that topic as well. the normal working man gets friggen screwed by both r and d. there's no winning. why not drop the incentives and tax the f out of ev's that are way outside what the normal person can afford. how's this list from electrek hit 'ya, and it's not even the full list, i stopped at 6 figures. oh by the way, it's not just r1t and r1s owners.... ford and chevy will feel the bite of this b.s. too....

Electric Vehicle	MSRP (USD)	Release Date
Porsche Taycan Turbo S	$185,000	Available
Lucid Air Dream Edition	$169,000	Second half of 2021
Porsche Taycan Turbo	$150,900	Available
Tesla Model S Plaid+	$139,990	Mid 2022
Audi RS e-tron GT	$139,900	December 2021
Lucid Air Grand Touring	$139,000	Second half 2021 TBC
Bollinger Motors B1	$125,000	Late 2021
Bollinger Motors B2	$125,000	Late 2021
Tesla Model S Plaid	$119,990	August 2021
Tesla Model X Plaid	$119,990	Jan/Feb 2022
Bollinger Motors Chassis Cab	$110,000	Late 2021
Porsche Taycan 4S	$103,800	Available
Audi e-tron GT	$99,900	December 2021
Mercedes-Benz EQS	$113,000 (est.)	Fall 2021

 

[nfrank]

Is the tax incentive to reduce financial hardships or is it there to reduce carbon emissions? I think it's there to reduce carbon emissions. If that's the case then scale the tax credit based on battery size. So many people are driving around in Chevy Tahoes that I think can be convinced of an EV. The tax payer will get what they pay for if we switch someone buying a $60k Tahoe into a $75k R1S by using the tax credit.

The truth is people who earn $100k+/yr create the most carbon emissions. Those are the people we need to convince to reduce their footprints first. Better yet, give the tax credit based on miles driven per year. If a person drives a shit ton then those are the people government subsidies should target.

 

[LoneStar]

It's DOA just like the bigger "Infrastructure" bill is

 

[Trekkie]

The average price of a new car in the united states is about $40,750 or so. This is political theater by the senator, just look at the crap they spewed to twitter.

The only cars that will get the full credit will be 80 mile EVs like the Mini or some other short range junk.

It's not a done deal, just disappointing. A bunch of new American car manufacturers are appearing and trying to make some of the most 'made in america' cars driving innovation and while we hand out millions to billions to legacy oil companies still they screw with a simple incentive and target the middle class to not benefit from it.

 

[DucRider]

The rebate should be based on battery size.

As a point of reference, the current tax credit (it's not a rebate) is at least partly based on battery size:
$2,500 base credit
+$417 for up to 5 kWh pack size
+ $417/kWh in excess of 5 kWh
Max is $7,500 (anything 16 kWh or over qualifies for the full credit). This is an indication of the state of technology when this was put into place (2008/9) and how far things have progressed.

It's definitely due for a complete overhaul, but I think the chances of that are close to zero. We will likely see a few tweaks, but nothing like converting it to an actual rebate available at the time of sale, a sliding scale based on current pack sizes, making it a refundable credit (or at least allow it to roll over), etc.

There will probably be an MSRP cap put into place and a reset or modification of the 200K limit per manufacturer. Possible that we will see an income cap.

Hopefully it doesn't get as convoluted as Oregon's rule for the "Charge Ahead" rebate: 120% of the median income based on household size in the county you reside. "Household" includes anybody in the same dwelling that does not have a separate rental agreement/lease, and income includes thing not included or considered as such by the IRS or Oregon Department of Revenue. If you have a roommate that gets child support those payments are included in calculating your income.

 

[Lobstahz]

Not shocked that Senator Ethanol (Nebraska) wants to slow down the transition to EVs. Capping it at 100k income creates a very small group of folks that can utilize the whole rebate. Which is the point of the amendment. Single filers need to have at least 57k in taxable income, to have 7500 in tax to take full advantage of this tax credit. If this senator wanted to actually help they could have made the credit refundable, meaning you wouldn't need 7500 in tax liability to take full advantage of the credit. Or they could allow you to carry the credit forward until it's fully consumed.

This amendment does neither of these (or any other method of truly trying to get more EVs into people's hands) and is purely political theater.

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