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Automotive News
May 26, 2021

The Senate Finance Committee can advance a $259.5 billion package of clean energy tax credits that includes $31.6 billion in consumer incentives for EVs.

The extension of the EV tax credit would be a boon to motorists looking to buy from Tesla Inc. and General Motors, whose offerings are no longer eligible for the credit under current law, and Ford Motor Co., which said Wednesday it plans to boost spending on electric models by $30 billion in the coming years.

Car buyers could claim credits of as much as $12,500 for cars assembled in the U.S. at plants where workers are represented by unions. The credit only applies to vehicles where the suggested retail price is $80,000 or less, which would exclude buyers of some higher-end Tesla models from qualifying.










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So, buy a Chevy Bolt, or wait?

I say buy it now. The incentives on the 2021 models are incredible. Should the government reinstate the GM product allowance, you can bet your last dollar that GM incentives will show a marked decline to take into account the new government support.

From Cars.com:
2022 Bolts benefit from a $5,500 price cut in MSRP. However, the updated EV will launch with no rebates. For reference, 2021 Bolt deals feature a $9,000 rebate that you can boost to $12,000 by buying a car with DC Fast Charge. So while the latest Bolt may look cheaper on the surface, it will actually be more expensive.








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So, buy a Chevy Bolt, or wait?

I say buy it now. The incentives on the 2021 models are incredible. Should the government reinstate the GM product allowance, you can bet your last dollar that GM incentives will show a marked decline to take into account the new government support.

From Cars.com:
I bet as government rebates go up, manufacturer rebates will go down and the consumer ends up paying the same and the taxpayer picks up the tab.
 

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I doubt that this will pass with the "Union" incentive. The government shouldn't be contributing to criminal organizations and extortionists.
 

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I feel like such a huge rebate takes away the incentives for manufacturers to bring down the cost of BEV's, at least they capped it, though the cap seems high. I wonder how they arrived at $70k.

The committee voted unanimously to accept an amendment from Senator John Cornyn, a Texas Republican, that would ensure that EVs produced in China were not eligible for the tax credit. The panel also adopted an amendment that would prohibit the importation of solar cells, wind turbines, or energy storage equipment that was manufactured using forced labor or child labor.

While I feel like this takes away incentives from manufacturers to reduce costs, at the same time I do like that it effectively blocks China from dumping BEV's in the USA as they did with solar panels. AND presumably also blocks/takes away incentives for domestic makes to try to sell Chinese made BEV's in the USA.

And I'm also liking the forced labor thing - I assume this can be easily used as a weapon to block Chinese imports of solar cells, wind turbines and other energy storage equipment. They should expand this to all products.
 

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I still hold firm that these incentives should not be for vehicle purchases w/ a MSRP of over $70k...For cars like the Mach E, Model Y, Lyriq (some trims), Lightning, Model 3 sure...go for it. But we should not be subsidizing $115k Hummers, MQSs and so on. In fact, I'd limit it to vehicles produced in the US by a MFR HQd in the US.
 

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Let the free market decide. If people want electrics, they'll buy them. If they don't, they'll rot on dealer lots.
Absolutely. I hate this market manipulation. In addition politicians have been spending money like drunken sailors, time to reel it back in.
 

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Central Planning at its finest. When you pretend you have two or three trillion bucks and spend it willy-nilly and call anything you can see or imagine "infrastructure," what could possibly go wrong?

Anyone who thinks lektriks have anything to do with the free market or capitalism or a representative republic, enjoy your fantasy because you are wrong.

Why not just "give" every voter $5,000 right before the next election? Call it infrastructure.
 

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I'm a big fan of EVs and this seems like a mixed bag.

The good:
1. Getting rid of the per-manufacturer unit limit (the current setup is basically incentivizing laggards)
2. Limiting the incentive to US-built vehicles

The bad:
1. I don't see why the credit needs to go way up to $12500 ($7500 is already a pretty generous credit). Probably $5k or so is a good incentive at this point.
2. Keeping the inventive around until EVs reach 50% market share. It needs to phase out well before then (maybe around 10-15%).

The ugly:
1. Tying the full incentive to union build. WTF?
 

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"EV Tax Credits are non-refundable tax credits that come from buying a vehicle with a battery propulsion system that can draws power from an external power source. The credits are available for both pure electric vehicles and plug in hybrids. The credits earned depend on a variety of factors and are used to decrease taxes you owed in a given year. For instance, if you bought an EV eligible for a $7500 tax credit and your total federal taxes for the year came to $8500, you would owe only $1000 to the government.
It is important to note that the credits are non-refundable tax credits, as opposed to refundable tax credits. That means that the credits can only be applied to the taxes you owe in a given year, and if you received more in credits than you owe in taxes, you will not receive the difference in the form of a check. (With refundable tax credits, you would receive that check). Additionally, since the credits don’t roll over, you can only apply the credits to your taxes for one tax year.
Keep in mind that you cannot qualify for the credits if you lease the vehicle because you don’t own it— the manufacturer does. In that case, the manufacturer can qualify for and receive the credit; the credit is often figured into the price of the lease, so you receive the benefit indirectly."
The purchaser does NOT get any money from the Government for buying an EV.
 

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I'm a big fan of EVs and this seems like a mixed bag.

The good:
1. Getting rid of the per-manufacturer unit limit (the current setup is basically incentivizing laggards)
2. Limiting the incentive to US-built vehicles

The bad:
1. I don't see why the credit needs to go way up to $12500 ($7500 is already a pretty generous credit). Probably $5k or so is a good incentive at this point.
2. Keeping the inventive around until EVs reach 50% market share. It needs to phase out well before then (maybe around 10-15%).

The ugly:
1. Tying the full incentive to union build. WTF?
WTF?!?!? There's a union build clause? GD it...pandering at its finest.
 
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Compared to Oil Tax Credits, the EV Tax Credit Is Cheap
Another false argument still circling out there by EV opponents—that the EV tax credit is too costly for the federal government to afford—is wrong too. Let’s put that into perspective by comparing the EV tax credit to tax credits for the oil industry.
First, the EV tax credit is temporary while oil tax credits are permanent. Second, there is only one tax credit for EVs while the oil industry has many.
 

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"EV Tax Credits are non-refundable tax credits that come from buying a vehicle with a battery propulsion system that can draws power from an external power source. The credits are available for both pure electric vehicles and plug in hybrids. The credits earned depend on a variety of factors and are used to decrease taxes you owed in a given year. For instance, if you bought an EV eligible for a $7500 tax credit and your total federal taxes for the year came to $8500, you would owe only $1000 to the government.
It is important to note that the credits are non-refundable tax credits, as opposed to refundable tax credits. That means that the credits can only be applied to the taxes you owe in a given year, and if you received more in credits than you owe in taxes, you will not receive the difference in the form of a check. (With refundable tax credits, you would receive that check). Additionally, since the credits don’t roll over, you can only apply the credits to your taxes for one tax year.
Keep in mind that you cannot qualify for the credits if you lease the vehicle because you don’t own it— the manufacturer does. In that case, the manufacturer can qualify for and receive the credit; the credit is often figured into the price of the lease, so you receive the benefit indirectly."
The purchaser does NOT get any money from the Government for buying an EV.
I didn't know that, hopefully it's normal procedure for the car salesman to disclose this. I structure my tax withholdings to come out with a small refund, so if I bought a BEV I'd get a big, fat $0 in place of my expected $12.5k. And, also something to plan, if you buy a BEV at the end of the year, most people wouldn't have enough room left to get the full $12.5k.

Anyone experience this in real life? Is this for real?
 

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I'm a big fan of EVs and this seems like a mixed bag.

The good:
1. Getting rid of the per-manufacturer unit limit (the current setup is basically incentivizing laggards)
2. Limiting the incentive to US-built vehicles

The bad:
1. I don't see why the credit needs to go way up to $12500 ($7500 is already a pretty generous credit). Probably $5k or so is a good incentive at this point.
2. Keeping the inventive around until EVs reach 50% market share. It needs to phase out well before then (maybe around 10-15%).

The ugly:
1. Tying the full incentive to union build. WTF?
Union build? You said it right - WTF! I am really disgusted by all these political favors benefiting special interest groups instead of what is best for the majority.
 

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Wouldn't it be nice if the federal government provided me with a hefty tax rebate on each consumer product I purchased?

Our government should not be giving rebates on any consumer product - no matter how the rebate is structured.
 

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I still hold firm that these incentives should not be for vehicle purchases w/ a MSRP of over $70k...For cars like the Mach E, Model Y, Lyriq (some trims), Lightning, Model 3 sure...go for it. But we should not be subsidizing $115k Hummers, MQSs and so on. In fact, I'd limit it to vehicles produced in the US by a MFR HQd in the US.
Ha...just read the entire article...the credit has a $80k cap...10k higher than I suggested but at least there's a cap. The only thing they really need to do is get rid of the stupid Union assembly stipulation for what I'm assuming is max credit and protect American made autos by excluding foreign makes....keep it w/ the Big 3.5.
 

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I didn't know that, hopefully it's normal procedure for the car salesman to disclose this. I structure my tax withholdings to come out with a small refund, so if I bought a BEV I'd get a big, fat $0 in place of my expected $12.5k. And, also something to plan, if you buy a BEV at the end of the year, most people wouldn't have enough room left to get the full $12.5k.

Anyone experience this in real life? Is this for real?
No, the withholding won't affect the credit. Say someone's income taxes for the year is $50k. They will get the full credit (e.g., $12500) regardless of what they withhold. So, in this example, if the person had withholding of $50k, he/she will get a check back for $12500 when they file taxes.

The limitation with non-refundable credits is for people who don't owe enough tax to begin with. Say someone's income taxes for the year is $9k. They will only get $9k credit instead of the full $12500 (i.e., taxes for the year can go to zero but can't go negative with non-refundable credits). So the limitation is the credit won't exceed the total taxes (after deductions, other credits etc.) for the year (regardless of withholding).
 
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