Senate deal would revive EV tax credits for GM, Tesla and Toyota

The Inflation Reduction Act would also offer credits for used EVs

Automakers might just get the EV tax credit extension they've been hoping for. Bloomberg and InsideEVs claim Senators Chuck Schumer and Joe Manchin have reached an agreement on the Inflation Reduction Act that would replace the 200,000-unit cap on federal EV tax credits with a system that would restore those perks for GM, Tesla and Toyota. According to Bloomberg's sources, the new approach is a compromise that would switch to price- and income-based limits, drop union manufacturing requirements and offer credits for used EVs.

The Act would provide up to $7,500 in credits for electric SUVs, trucks and vans priced up to $80,000, while cars would have to cost $55,000 or less. Individuals would have to earn no more than $150,000 per year, while couples could make up to $300,000 with the credit intact. You would reportedly get up to a $4,000 credit for buying a used EV, although the income ceiling is said to be much lower. Crucially, the credit could be offered at the point of sale (such as online or a dealership) rather than as a tax refund — you'd get your savings much sooner.

Although the agreement is expected to drop the union production requirement, there would still be incentives for domestic manufacturing. Although the exact terms aren't clear, EVs would have to be built in North America and source many materials from the region. This would mainly represent a concession to Canada, which balked at earlier proposed legislation that would have required US-only assembly. Canadian factories produce US-destined cars for multiple major brands.

The Schumer-Manchin pact is also poised to revive some of the Biden administration's environmental strategy, including its hopes of zero-emissions vehicles representing half of new sales by 2030. It's expected to include $369 billion in climate and energy spending, Bloomberg said. Manchin had objected to the past proposal, in part because he felt the union requirement would favor incumbent American brands like Ford and GM while disadvantaging rivals like Tesla.

More details of the deal are still to come, and there's a chance the terms could change. If the Inflation Reduction Act passes as claimed, though, it could significantly alter the automotive landscape. GM, Tesla and Toyota could effectively lower the prices of their EVs and offset recent hikes, while Nissan and other marques wouldn't have to worry about hitting a unit cap in the first place. The move could also spark life in the used EV market by offering a clearer financial incentive versus buying new. Simply put, EVs could become more accessible even without lower-cost models in the pipeline.

https://www.engadget.com/senate-ev-t...160843286.html

 

I don't understand this legislation EVs have a serious over demand problem they don't need to be subsidized.

 

Toyota, Tesla and GM have been lobbying the government to extend or renew the tax credits, this is the fruits of their lobbying. I'm also guessing this would help lower income buyers

 

GM will be lucky to sell 20,000 EVs this year it will hardly help them if at all. Toyota barely sells any and lobbies to stop electric vehicles. Tesla doesn't care in fact Elon has said scrap all incentives. Unless this extends to hybrids which is possible. Stupid, but possible.
I love this trick, give legislation the exact opposite name of what it will achieve. Government version of dig up stupid.

 

So I still have to pay for people with my tax dollars who buy EVs that make $145,000 a year instead of 150? Effing ridiculous they get any tax breaks at all.

There are so many people who don’t want these EVs peoples’
heads would spin—all due respect I don’t think you are seeing outside of the very very tech heavy area you live in.

 

If these incentives are to be made available they should absolutely target US-built vehicles with a minimum US-source component requirement and they absolutely should be focused on lower income households.

The 150k/300k per year threshold is too high IMO. Drive the incentives to lower incomes and offer higher incentives on used EVs rather than new to encourage the replacement of older less-efficient vehicles and also to reduce the incentive to always buy new. If this is about sustainability in any shape or form then encouraging the sale as many new build EVs as possible doesn’t necessarily do that.

 

By the sounds of it this will apply to plug-in hybrids that have batteries as small as 7KWh. This does not target U.S. built but North American built so cars like the Mach-E will qualify.

 

If it does apply to plug in hybrids than Toyota and Lexus will probably end up falling further behind in developing a proper EV

 

I am generally not in favor of subsidies, especially for people who do not need them.
Having said that, I would want the vehicles to be made in America and not just assembled here. Bolt and Mach-E do not quality.

Won't do me any good, because my next Tesla will be a Model 3 Performance. This will help GM and Ford, who are so far behind it isn't funny.
Tesla made more money than they did in Q2, selling only 4 vehicles vs the entire Ford and GM lineup.

 

If the new rule passes, then the credit will be good until the end of 2032.

1) GM will be rolling out many EVs between now and then so 2022 production numbers will be irrelevant.

2) Toyota is gonna have to give into EV whether they like it or not.The entire industry is heading that way so either they adapt or get left behind. They have a lot of work to do because the Bz4X is terrible as an EV. It wont qualify for the new EV credit either.

3) It is true, Elon wants to scrap all incentives(*)

(*) only for the consumers. The tax credits and subsidies that Elon took in for SpaceX and Tesla? Leave them alone!

 

Assuming it survives multiple administrations which is highly doubtful.
I don't see how GM missing out on billions in incentives is irrelevant.
The way I read the bill any plug in hybrid with a puny battery qualifies or even gets more money than a pure EV. Why won't the Bz4X qualify?

SpaceX has contracts with government not even close to the same thing. SpaceX has saved taxpayers billions compared to the old way of putting rockets into space.

 

That does sound hypocritical of Musk when it's put like that.

 

We shall see, but I doubt it'll last a year or two either.

Because the inventive isn't for 2022 only. If the new rule lasts until 2032, they'll have a lot of time to make up for 2022. Everyone is currently limited by the supply chain so it's not like GM can crank out 100k EVs right now, even if they wanted to.

Part of the stipulation is the EV has to be built in North America and the battery has to be mostly North America (% of component requirement will increase as the years ago on). The Bz4X is either built in Japan/China so it's disqualified.

The point is that it's hypocritical for Elon to dismiss incentives when he took them himself, lots of it.

 

And not law yet could still fail to become.
I understand. Problem is people will tend to buy vehicles that have the tax credit making the car cheaper. Put another way won't be a GM product for years.
I see, thought the Bz might be built in Canada. Ironically the car that should get the EV credit won't.
If Tesla didn't take the money investors would have instantly sued them Elon can be against incentives and still take them out of investor obligation. If that to you makes him a hypocrite so be it.

 

Very interesting angle, I didn't think about that.
Many great posts, suscribed.