GOP tax reform bill would end the $7500 EV tax credit (and other tax related grousing and grumbling)

[Sportstick]

I'm a member, but I don't think I have posted before. Just here to say that I think many, many people like me view this with extreme trepidation. May not pass, but if it does, I'll be volcanically angry. Like, I bet, a lot of wannabe M3 buyers, I've never been a high earner. (Thank you, journalism!) I'm 48, but the most I've ever paid for a car is $2700. I currently drive a Prius, for which I paid $1500. I believe that EVs are the right, moral thing to do for the world and the future. I'm finally earning enough, and I'm a saver. But preparing to spend, with tax credits, 10 times as much as I've ever paid for a car-- that's a very big deal.

I believe this won't pass, but if it does, I may not get to have an EV for a long time. I need something capable of longer trips, so a Leaf or similar won't work.

I firmly believe this is part and parcel of the current push to deny the clear reality of how ICE emissions change the atmosphere.

This is an awful, if predictable, turn. I know a lot of people here make a lot of dough. Don't forget about the low-rollers among you!

Off to call my congressional reps. -sigh-

If exterior design isn’t an issue, Chevy Bolt could be perfect for you and they are being discounted, in addition to the current tax credit.

 

[idleuser]

Tesla has at at least 2 quarters left to claim the full 7500 rebate before Q2 hits in 2018. But if Tax reform pass then that means no one gets anything at all after 12/31/2017. If someone of you really believe EV incentive doesn't really affect Tesla then you need to look at countries and states who phased out these tax incentives.

Denmark to relaunch its electric vehicle market with incentives after a year with almost no sales
Hong Kong went from electric vehicle ‘beacon city’ to a complete stop of EV sales last month
Electric car sales crash is predicted by Edmunds due to the end of the federal tax credit

Look no further than the state of Georgia. Still don't EV tax credit matters? Tesla actually markets their vehicles on their own website to include EV incentives.

 

[bkp_duke]

Tesla has at at least 2 quarters left to claim the full 7500 rebate before Q2 hits in 2018. But if Tax reform pass then that means no one gets anything at all after 12/31/2017. If someone of you really believe EV incentive doesn't really affect Tesla then you need to look at countries and states who phased out these tax incentives.

Denmark to relaunch its electric vehicle market with incentives after a year with almost no sales
Hong Kong went from electric vehicle ‘beacon city’ to a complete stop of EV sales last month
Electric car sales crash is predicted by Edmunds due to the end of the federal tax credit

Look no further than the state of Georgia. Still don't EV tax credit matters? Tesla actually markets their vehicles on their own website to include EV incentives.

Not arguing that it doesn't affect Tesla. I think the tax credit has served it's original purpose: to spur EV development and INITIAL adoption. I think Tesla can compete on merits now.

Hell, I'm buying 3 Powerwalls and I have SERIOUS mixed feelings about the gigantic CA rebate I am getting for them. It's nothing more than a corporate subsidy to Tesla. I would that rebate on the powerwalls go away, and see Tesla just lower their price on them.

 

[Seamless]

You do understand I hope that unless something earth shaking happens you wouldn't be getting the full rebate anyways due to the Model 3 delay? And you also have to have enough taxable income to get that back, right?

I hope you also understand that revamping the tax code is far more important long term than a one-time use EV tax credit.

If a hypothetical $3750 credit on a Model 3 is make or break for you then I would respectfully comment that you probably shouldn't be making the financial commitment int he firs

To which I would say that I am very well aware of all these facts. The delay is also troubling.

Not receiving a $3750 or $7500 credit might simply mean I drive another hybrid. I have a large amount socked away, but every few thousand higher means a new examination of one's long-term priorities if you're in a lower bracket.

I need no financial advice, no matter the respect or lack thereof-- I just need EVs to be cheap enough for me to participate. If the equation works given the conditions at the time, I'm in. We shall see.

Revamping the tax code can be done many ways; going after EVs is a regression that's short-sighted.

 

[Krazaak]

My personal (potentially naive) opinion is that losing the EV tax credit won't hurt Tesla at all in the long run. I think the hit to Tesla's stock price is just panic and it'll probably correct. With ~500,000 reservations, half to two-thirds of those were never going to see the any of the tax credit anyway. With the production delays the number of Model 3s that are going to be eligible for the credit is going to be even lower and the delayed ramp up means fewer cars can be pushed out in the phase-out quarters. There are people with reservations now that will probably be able to buy a CPO Model 3 before they can configure their pre-order.

There's no question that losing the credit will hurt some consumers that had early enough reservations to realize the credit and for who the $7,500 credit was making the purchase viable. Many of those will cancel and there will still be years of production backlog in the remaining reservations. When the P or D trims of the 3 become available, many of the early purchasers will be trading in the LR and early SR trims.

This is going to hurt companies coming into the EV market more than it impacts Tesla. Tesla is already almost 3/4 of the way to starting the phase out. A company entering this space now could reasonably expect to use the $7,500 credit for their Model 3 competitor for years after Tesla phased out. With the credit gone, those potential competitors are instead going to compete against CPO Model 3s.

 

[cartwright]

For my recent purchase the tax credit was the difference between buying new now and either waiting for a used one or the M3.

 

[Seamless]

If exterior design isn’t an issue, Chevy Bolt could be perfect for you and they are being discounted, in addition to the current tax credit.

True, if unexciting! I saw one the other day and found its ugliness on part with the Azteca. That is a seriously ugly car. Put with that multiple bad experiences with Chevrolet, and for me it's down to Prius or 3.

 

[bkp_duke]

For my recent purchase the tax credit was the difference between buying new now and either waiting for a used one or the M3.

Since people cannot think beyond the "current year", let's phrase this differently:

Would you rather have a $7500 one-time tax incentive now, or say $2500/year more take-home income?

 

[Seamless]

True, if unexciting! I saw one the other day and found its ugliness on part with the Azteca. That is a seriously ugly car. Put with that multiple bad experiences with Chevrolet, and for me it's down to Prius or 3.

Ugh! Par, not part. Stinkin' autocorrect.

 

[gregincal]

You do understand I hope that unless something earth shaking happens you wouldn't be getting the full rebate anyways due to the Model 3 delay? And you also have to have enough taxable income to get that back, right?

I hope you also understand that revamping the tax code is far more important long term than a one-time use EV tax credit.

If a hypothetical $3750 credit on a Model 3 is make or break for you then I would respectfully comment that you probably shouldn't be making the financial commitment int he first place.

By something earthshaking I assume you mean that Tesla executes as they say they are going to?

 

[Snow Drift]

Since people cannot think beyond the "current year", let's phrase this differently:

Would you rather have a $7500 one-time tax incentive now, or say $2500/year more take-home income?

I want it alllllll! Haha

 

[voip-ninja]

By something earthshaking I assume you mean that Tesla executes as they say they are going to?

Well, there's a first time for everything!

 

[SageBrush]

This is going to hurt companies coming into the EV market more than it impacts Tesla. Tesla is already almost 3/4 of the way to starting the phase out. A company entering this space now could reasonably expect to use the $7,500 credit for their Model 3 competitor for years after Tesla phased out. With the credit gone, those potential competitors are instead going to compete against CPO Model 3s.

"Potential" competitors is right.
Tesla is competing against itself. I figure the company might be able to cut car costs up to 10% a year, so the loss of the credit is certainly damaging but hopefully not severely so. I suspect that a good 500k customers exist who will buy the car, albeit perhaps less optioned than otherwise, without a federal tax credit. That should be enough work for Tesla for the next two years and time to cut costs.

We should also remember that half of Tesla's sales are outside the US.

This is all presuming the worse case. I can think of much rosier scenarios but I doubt North Korea or the Russians are any more tempted to host the buffoons in Congress and the White House than I.

 

[ohmman]

mod note: I moved 18 posts to Politics Quarantine. Some informative posts were moved due to being part of a response chain to a clearly partisan politics post. You can find the data in the link, and if you deem it valuable to the discussion of EVs and the tax credit, you can repost.

 

[Canuck]

I think Tesla can compete on merits now.

I think it always could. Of course, rebates help but we don't get any in BC -- federally or provincially -- on the S or X, and both are selling good up here.

I don't think there's any issue the federal rebate will be eliminated if the GOP passes tax reform. It's nuts to think it would stay. Coal powered would get rebates, if there was such a thing. As I see it, the only issue is if the GOP can get it passed with their slim margin in the Senate. So far the talk is they can, and may even get votes from the dems, but the devil is in the details, and we don't have them yet. Still, my money says it will be gone one way or another in not too long.

 

[ohmman]

Since people cannot think beyond the "current year", let's phrase this differently:

Would you rather have a $7500 one-time tax incentive now, or say $2500/year more take-home income?

I'd rather have the $7500 tax incentive available to all, despite what my extra take-home would be. Knowing that people will be healthier due to the outcome of the incentive means a lot more to me than take-home dollars.

For many of us, it's not about what's in it for us personally on the balance sheet, but how to limit the harm we do.

 

[Pinot.Noir]

I wonder just how much Congress understands about the alternative minimum tax that is to be repealed by this bill.

The AMT consists of exclusion items and timing items. Included among the exclusion items are. . .

All I know is I have to pay AMT every year and it's deletion, among other items in this bill, is music to my years!

 

[Pinot.Noir]

If exterior design isn’t an issue, Chevy Bolt could be perfect for you and they are being discounted, in addition to the current tax credit.

Yes, if you want a FUGLY car that is certainly an option.

 

[Muhammad]

Would legacy automakers be against or for the tax credit? Wouldn't GM and Nissan (and almost every other manufacturer) be worried about EV investments or do ICE sales trump everything?

 

[azred]

I don't really see the need for $75k+ cars to need a tax credit anyway. Is there really anyone here that wouldn't have bought a new Tesla without that credit?

Spoken like a true Texan.