Republican tax proposal will terminate $7,500 EV tax credit

LTLFTcomposite said:

I thought EVs we're supposed to be cheaper anyway, so many fewer moving parts.
Why would used EV prices skyrocket?

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It is what I would expect. Fewer new EVs sold mean fewer old EVs on the used market. Less supply likely means higher prices. Probably more of impact in Washington State than Florida, due to battery life differences.

Long term, EVs are cheaper. The supply of cheap oil is limited, and while we can clearly find oil deep offshore and make a lot of oil from tar sands, oil shales and coal to liquids, these are far more expensive. Battery prices per Wh have been falling over the past 3 decades, and are expected to continue to do so for another decade or more. We are in the crossover, where EVs are sometimes cheaper, depending on personal details, considering only the visible costs. As for costs harder to see, did you ever visit LA in the early 1970's? Or Beijing recently? Also climate change.

As for the tax proposal, I'd expect the Republicans to keep the EV tax credit termination. Far more interesting question, can the Republicans pass a tax proposal that will help corporations and the very wealthy, and hurt many less well off individuals; not to mention add trillions to the debt? Not clear to me, and not clear if even their supporters will like the results.

DarthPuppy said:

Guess the net price of the 2018 will be $7,500 higher than I was planning on. Grumble.

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I wonder if there will be a small rush of people who were going to wait for the 2018 Leaf in Jan (or to a smaller extent waiting for their Model 3) to buy the Bolt this year to qualify for the rebate?

desiv

LeftieBiker said:

Yeah I'd be surprised if there is not a TON of negotiations before any major tax reform is enacted.

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I'm sure that there will. Now, does anyone really believe that those negotiations will involve a real fight to save the EV credit? If anything it will become a sop to Republicans to let it die, in return for something like a slightly higher cutoff for mortgage deductions.

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I agree, that's likely. No better trophy for the Oilygopoly than killing the evil EV industry. True to form the "party of Business" absolutely hates the first major U.S. automaker to establish itself in living memory. But in the long run, for EVs to thrive, they first have to survive the ending of tax credit incentives. For the pioneering companies like Tesla and Nissan, the end of incentives was nearing anyway. The high irony is this move would punish the laggards more than the innovators. And ultimately help Tesla more than it hurts them. :lol:

We need someone who can read "legalize" to confirm if it passes as proposed when the credit would end. I have to believe if it ends Dec 31 or 2017 there will be a rush on EV before then.

Forget all the Model 3 production issues. I still believe that Tesla will solve them.

If this credit ends this year, I think they are sunk. I suspect more than half the reservation holders would cancel. I know I would.

It will be interesting to see if Nissan can hurriedly come up with a "delayed lease" program that lets us pay for the car in 2017, with the lease starting on delivery in 2018. Failing that, or the budget getting stalled for 6 months, it looks like I'll have to lease a Bolt*. I'll also look into smoking what DanCar is smoking, I think.


* The logistics of that will be fiendish. I can either lease one now, in November, and throw away a chance to drive a 2018 Leaf, or I can wait until December, and see Bolt leases skyrocket again if the tax plan passes.

The credit comes from this part of the law:

Title 26, Subtitle A, Chapter 1, Subchapter A, Part IV, Subpart B, §30D of the U.S. tax code.

https://www.law.cornell.edu/uscode/text/26/30D

So what we need to look for is modifications to that part of the law.

Here is one place you can download it:

https://www.vox.com/2017/11/2/16596110/republican-tax-reform-bill-read

and you will find on page 72:

10 SEC. 1102. REPEAL OF NONREFUNDABLE CREDITS

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and later in that section on page 74:

7 (d) REPEAL OF SECTION 30D.—
8 (1) IN GENERAL.—Subpart B of part IV of
9 subchapter A of chapter 1 is amended by striking
10 section 30D (and by striking the item relating to
11 such section in the table of sections for such sub-
12 part).
13 (2) CONFORMING AMENDMENTS.—
14 (A) Section 38(b) is amended by striking
15 paragraph (35).
16 (B) Section 1016(a) is amended by strik-
17 ing paragraph (37).
18 (C) Section 6501(m) is amended by strik-
19 ing ‘‘30D(e)(4),’’.
20 (e) EFFECTIVE DATE.—
21 (1) IN GENERAL.—Except as provided in para-
22 graphs (2) and (3), the amendments made by this
23 section shall apply to taxable years beginning after
24 December 31, 2017.

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So there it is. You won't find a reference to electric vehicles, because that would be too transparent.
There is a lot buried in that 429 page bill that you need to cross reference with the original law.

It was a dumb move for Musk to abandon that advisory council thing.

LTLFTcomposite said:

It was a dumb move for Musk to abandon that advisory council thing.

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Agree. Just because he doesn't agree with somethings, doesn't mean he can't be influenced in other areas.

Poll: In the U.S.A. will killing the federal tax credit of $7,500 significantly affect EV sales?
https://plus.google.com/u/1/+DanielCardenas/posts/83cqBXjPbsd

IMO, it's unlikely the EV tax credit will ever be put back into a republican tax plan.

On the other hand, its nearly as unlikely the the sad collection of impotent mental defectives that make up the republican congressional delegations will pass any major tax reform plan.

However, if the alt-right ever decides to promote TSLA's flagrant milking of the American taxpayers (of which the tax credit is only a fraction) as a major talking point, political realities could shift rapidly.

Numerous explicit statements by TSLA executives about how they plan to game USA deliveries, producing a surge sales and of tax credit claims right after the 200,000 limit is reached, exemplify how the credit allocation was flawed in the first place, and should be reformed.

so those of us that got the EV tax credit via buying a Leaf...milking u say. hmmmm. Does Nissan know that? Or GM Bolt buyers? Just Tesla? wow. Keep up with the stupid. you r on a roll.

edatoakrun said:

However, if the alt-right ever decides to promote TSLA's flagrant milking of the American taxpayers (of which the tax credit is only a fraction) as a major talking point, political realities could shift rapidly.

Numerous explicit statements by TSLA executives about how they plan to game USA deliveries, producing a surge sales and of tax credit claims right after the 200,000 limit is reached, exemplify how the credit allocation was flawed in the first place, and should be reformed.

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Please do explain why you believe Tesla has been milking American taxpayers aside from the EV tax credit. I don't want to see Tesla flamed by the alt-right!

Personally, I believe it was wrong to give each manufacturer a separate credit allocation, as this system rewards laggards. At the same time, I think Tesla would be doing the right thing to maximize the number of customers receiving the tax credit. Just as I'm thankful for my tax accountant fulfilling his fiduciary duty to minimize my taxes to the extent permitted by the tax code.

Republican senator Dean Heller from Nevada, home of the Tesla gigafactory, opposes repeal of federal EV tax credit.
https://electrek.co/2017/11/07/electric-vehicle-buyers-federal-tax-credit/
If you don't know how congress works let me inform you how things are fixed. They throw money at the problem. Dean is an issue as they need all the votes, so they will either not repeal the tax credit so quickly or offer his state some other tidbit(s).

If Heller's concerned is tied closely with Tesla then they could change the phase out time to coincide with the first manufacturer that reaches the limits.

If you don't know how congress works let me inform you how things are fixed. They throw money at the problem.

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That's a bumper sticker, not an explanation. In the Senate especially, people will cross party lines to vote, but this works both ways. I'm sure there are at least a couple of Democratic Senators who oppose the federal tax credit and would vote to repeal it, unless instructed otherwise by the Senate leadership.

LTLFTcomposite said:

It was a dumb move for Musk to abandon that advisory council thing.

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If you think GOP reps listen to some weird council Trump setup - you are sorely mistaken.

DanCar said:

Republican senator Dean Heller from Nevada, home of the Tesla gigafactory, opposes repeal of federal EV tax credit.

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GM & Nissan just announced their opposition to the EV tax cut. So, 2 R senators from TN may be opposed as well, as well as the ones from MI (but they are D).

If you don't know how congress works let me inform you how things are fixed. They throw money at the problem.

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Not how Congress works at all. They throw money at donors - so if they get lobbied (and the lobbies give money), they will support any legislation that lobbyists write.

That's why you don't see enough money to address Flint poisonous water (or free college tuition) but a $70B increase in military spending.

evnow said:

Not how Congress works at all. They throw money at donors - so if they get lobbied (and the lobbies give money), they will support any legislation that lobbyists write.

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More typical: a law is written by a lobby that has up front support from 40-50% of the house/senate, and then the extra votes needed are bought.

SageBrush said:

More typical: a law is written by a lobby that has up front support from 40-50% of the house/senate, and then the extra votes needed are bought.

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Probably for the more well known topics. For obscure topics hardly anyone knows about - it could be the lobbyists working literally from scratch - one at a time (usually starting with the home district / state). This is how you get head scratchers passed - while what looks obvious doesn't get passed.

A good example would be healthcare for 1st responders of 9/11. You would think it was something that should pass easily with bi-partisan support. But it took several months of work by activists and celebrities to get passed. But Disney got a far reaching bill passed that extended copyright by decades easily.

The only real hope for an extension, or for just allowing the credit to expire as designed, is if GM really has sunk millions into R&D and pre-production work on several more EVs. If they lean heavily on Congress, it might be as good as tossup odds. I'm inclined to believe, though, that GM is just making the right noises but isn't willing to do any heavy lifting. Likewise Nissan, who seem to be focused on their home market, with Europe to follow. They actually treated "Leaf 2" as a sort of compliance-like EV, by doing the minimum of upgrades to the existing platform. As long as they can sell some in the CARB states with hefty state tax credits or rebates, they won't really care if the US market grows, stays static or shrinks.

I just wish I knew for sure what is going to happen, as I have a specific Bolt in mind but would still prefer a 2018 Leaf...