[pookiemalibu]

[QUOTE=DocWeatherington;29161462]

Originally Posted by natemg

The thing that pisses me off is that this is part of the energy bill right? Isn't the justification of the tax credit give incentive to move to EV's and PHEV's?

I get the income caps, I don't like them but I get the logic, if you make $150k you should be able to afford an PHEV or EV without the tax credit.

In my case the $7500 worked 2x. We were looking at the X5 I really thought we would end up with a 40. The fact that the 45e would work out to be cheaper in the end changed our mind. We have had it for 2 months and it has been to the gas station once. By now the 40 would have needed 4-5 fill ups. As for my next car, I was leaning towards one last ice car w/ lots of horsepower. I saw the i4, liked it, especially because it was less than the ICE cars I had been looking at. Yea I know there are less expensive ICE cars but the ones I was considering were more.

I'm not going to save the planet. I just don't like filling up, especially when the greedy bastard oil companies are gouging us.


It's the whole system.. Why not speed 50 billion on e-fuels that can be put in ICE motors and net zero emissions.

In 10years, they will be like no more EVs..the cost of raw materials and mining is too high.

Dude, $150K doesn't go as far as people think. Particularly if that's pre-tax and not AGI. Average rent for a single family home in America is $2,100/mo. Health insurance for a family of four where we live is $2000+/mo. Car, which is admittedly a splurge ('21 F95) is roughly $1300/mo. Insurance (car, disability, umbrella, life etc.) is easily $1000. Save 20% and that's $2500/mo. Add a couple kids in private school or an out of state college and you're living paycheck to paycheck before you know it.

For Boomers $150K is probably more than enough to survive. But for a HENRY (High Earner Not Yet Rich) $150K goes out the door as fast as it came in.

[motzus]

Originally Posted by admranger

The really interesting part of the bill is the $4k per used EV purchased. So my neighbor and her daughter have identical Model Y Teslas. Could they sell their cars between themselves and pocket $8k? No sales tax on person to person sales in NV so what's the downside? I hope the fine bill writers thought of that little loophole or there will be a huge sale/resale market.

That would not work. The bill says that you only get the tax credit for used EV's if you buy it from a dealer (dealer not defined, but rules out private sales I guess). The EV can only get the used car tax credit once per its lifetime (I guess they will track it by VIN?). You a person can only get the used EV credit once every three years (not sure how if works if it is a couple filing jointly, one car per person every three years or one car per couple only every three years).

[F32Fleet]

Markets which require govt subsidies are not functioning correctly. It's a reflection of the disconnect between the few (govt and its supporters of policy X) and the many (i.e. consumers as a whole.

[sarafil]

[QUOTE=pookiemalibu;29162295]

Originally Posted by DocWeatherington

Dude, $150K doesn't go as far as people think. Particularly if that's pre-tax and not AGI. Average rent for a single family home in America is $2,100/mo. Health insurance for a family of four where we live is $2000+/mo. Car, which is admittedly a splurge ('21 F95) is roughly $1300/mo. Insurance (car, disability, umbrella, life etc.) is easily $1000. Save 20% and that's $2500/mo. Add a couple kids in private school or an out of state college and you're living paycheck to paycheck before you know it.

For Boomers $150K is probably more than enough to survive. But for a HENRY (High Earner Not Yet Rich) $150K goes out the door as fast as it came in.

True, but also the proposed income cap is based on AGI of 150k for individuals or 300k for joint filers, so that would allow for pre-tax deductions to be factored in. Hard to argue married couple with >300k AGI is struggling enough to need govt handout on a new car purchase.

[F32Fleet]

Originally Posted by Penguino

It's almost as if the US wants everyone to be poor.

Why limit the EV credit based on income?

Because someone has to pay for the credits and the optics look bad.

[Penguino]

Originally Posted by F32Fleet

Because someone has to pay for the credits and the optics look bad.

What optics?

I contribute more, I get the same perks vs I contribute more and get no perks and someone contributes less and gets more perks?

senseless

[F32Fleet]

Originally Posted by admranger

The really interesting part of the bill is the $4k per used EV purchased. So my neighbor and her daughter have identical Model Y Teslas. Could they sell their cars between themselves and pocket $8k? No sales tax on person to person sales in NV so what's the downside? I hope the fine bill writers thought of that little loophole or there will be a huge sale/resale market.

No. It's going to be a sale through a dealer.

[F32Fleet]

Originally Posted by Penguino

What optics?

I contribute more, I get the same perks vs I contribute more and get no perks and someone contributes less and gets more perks?

senseless

The optics of it being a subsidy for "rich people". Which like it or not it is. The alternative is higher tax rates. Take your pick.


It's like solar subsidies. They're always paid for by the poor in the form of higher rates.

[edofloat]

Interesting will probably eliminate any chance of tax credit being passed through into a lease. Granted BMW really doesn't seem to pass any tax credit through into a lease. At least when I looked at the X5 45e the rate and residual were worse than on the ICE model X5s.

Currently, the tax credit goes to the owner, in a lease that is the lease company. Just looked at a Solterra lease and you get the entire tax credit up front in a lease in the form of a rebate. I know the potential changes would eliminate Solterra just like any European-built EVs.

Does anyone have data showing the income of the average EV buyer? This bill is designed to appease and probably won't result in many actually getting any type of tax credit given the steep increases in the pricing of EVs.

I don't view this as a subsidy for rich people, I view it as getting some of my money back from the government.

[m3number86]

[QUOTE=pookiemalibu;29162295]

Originally Posted by DocWeatherington

Dude, $150K doesn't go as far as people think. Particularly if that's pre-tax and not AGI. Average rent for a single family home in America is $2,100/mo. Health insurance for a family of four where we live is $2000+/mo. Car, which is admittedly a splurge ('21 F95) is roughly $1300/mo. Insurance (car, disability, umbrella, life etc.) is easily $1000. Save 20% and that's $2500/mo. Add a couple kids in private school or an out of state college and you're living paycheck to paycheck before you know it.

For Boomers $150K is probably more than enough to survive. But for a HENRY (High Earner Not Yet Rich) $150K goes out the door as fast as it came in.

I would argue no private school if youre at that income level. No fancy car either. Theres your savings lol

[F32Fleet]

Originally Posted by edofloat

Interesting will probably eliminate any chance of tax credit being passed through into a lease. Granted BMW really doesn't seem to pass any tax credit through into a lease. At least when I looked at the X5 45e the rate and residual were worse than on the ICE model X5s.

Currently, the tax credit goes to the owner, in a lease that is the lease company. Just looked at a Solterra lease and you get the entire tax credit up front in a lease in the form of a rebate. I know the potential changes would eliminate Solterra just like any European-built EVs.

Does anyone have data showing the income of the average EV buyer? This bill is designed to appease and probably won't result in many actually getting any type of tax credit given the steep increases in the pricing of EVs.

I don't view this as a subsidy for rich people, I view it as getting some of my money back from the government.

https://www.evunite.com/blog/teslade...20%2478%2C500.

2020 info on based on 2018 data.

[spool twice]

How would they verify income during a POS transaction? Just curious how this process would work.

[WER2XU]

Just curious if the tax credit haters are only against EV tax credits, or all tax credits.

[admranger]

Originally Posted by WER2XU

Just curious if the tax credit haters are only against EV tax credits, or all tax credits.

Likely going to lead down a rabbit hole. Full disclosure, I am eating popcorn while I type this (not kidding).

I am not against tax credits, per se, but in general there are too many. This makes tax attorneys and CPAs happy, but also requires a large IRS to manage an ever more complex tax code. If I were king for a day, I'd cancel all of them, issue a flat tax, and open the floor for adjustments based on science or economics.

401k/IRAs are ones I hope everyone is taking advantage of (I'm lumping tax credits and tax deductions together, but whatever).

Tax credits are fine to incentivize investment that makes a long term good (debatable what "good" is). Some are past their prime. Do we really need a mortgage interest deduction? I take it but I don't need it. I took the solar tax credit as well, though I would argue that rooftop solar makes more sense for the US (assuming you believe it helps reduce CO2 emissions) than a mortgage interest credit. Rooftop solar reduces demands on transmission lines (vs. solar 'farms').

Should there be incentives for industry to reduce pollution emissions below regulatory limits? As a kid we used to drive through Wyoming on our way from MN to ID. The air was horrid near the oil refineries. Just yellow/brown stank. Clean air act fixed that, but do we want more regulations or would an incentive have worked so that US industry could figure out the most cost effective fix vs. the folks at the EPA? I dunno, but I know corporations do like profits and they'd have gotten clever very fast if money was there for the taking.

[/popcorn]

[F32Fleet]

Originally Posted by WER2XU

Just curious if the tax credit haters are only against EV tax credits, or all tax credits.

I'd imagine it's mixed.

[F32Fleet]

Originally Posted by spool twice

How would they verify income during a POS transaction? Just curious how this process would work.

It's anyone's guess. POS is highly irregular but it could be something as easy as signing a document attesting to your level of income. There will be a paper trail.

[sfi4]

Originally Posted by F32Fleet

Markets which require govt subsidies are not functioning correctly. It's a reflection of the disconnect between the few (govt and its supporters of policy X) and the many (i.e. consumers as a whole.

You’re not entirely wrong. The subsidy exists because BEVs haven’t hit economies of scale yet that would make them price competitive with ICE vehicles. The government is using subsidies to help level that playing field because encouraging EV adoption is a good way to make climate-friendly change at scale.

[mbchris]

The dealership likely has to file paperwork with your SSN to the IRS. And you would have to pay it back on your tax return if you went over.

[F32Fleet]

Originally Posted by sfi4

You’re not entirely wrong. The subsidy exists because BEVs haven’t hit economies of scale yet that would make them price competitive with ICE vehicles. The government is using subsidies to help level that playing field because encouraging EV adoption is a good way to make climate-friendly change at scale.

Here's the problem with this.

No 1: The majority of buyers over the past couple of years could afford a BEV without the subsidy.

No 2:. Subsidies act as a distinctive to reduce manufacturing costs and therefore become a form of cronyism. We see that on display with this bill.

No 3: The cost of the subsidy is hoisted on to future generations who had no say in the matter.

Cronyism is cronyism regardless of their subjective value.

[sfi4]

Originally Posted by F32Fleet

Here's the problem with this.

No 1: The majority of buyers over the past couple of years could afford a BEV without the subsidy.

No 2:. Subsidies act as a distinctive to reduce manufacturing costs and therefore become a form of cronyism. We see that on display with this bill.

No 3: The cost of the subsidy is hoisted on to future generations who had no say in the matter.

Cronyism is cronyism regardless of their subjective value.

Agree to disagree, I guess. Buying behavior is a really interesting monster. Could people buying a $60-80K car afford to spend $10K more for electric? Sure. Would they actually make that buying decision? It's unclear, and in a lot of cases people would probably look at the economics, determine they'd never save the cost difference in fuel and maintenance, and make the easy choice of an ICE vehicle. One of the reasons I jumped in when I did — and made the most expensive car purchase of my life to date — was this program.

Your second point isn't correct (that they act as a disincentive to reduce costs). The subsidy increases the # of electric vehicles going out the door, which means more demand for parts like batteries, which means economy of scale kicks in and reduces overall cost. Combined with reuse of ICE vehicle parts/body panels by smart companies, that's how we're now seeing things like F150 and i4 MSRPs coming in close to equivalent ICE vehicles. Further, there's a ticking time bomb on the subsidy, making it clear to manufacturers that they're on their own after a set period. With costs coming in line, the new bill incentivizes other behaviors like cleaner / more ethical materials going into EV batteries. Industries *loves* gov't subsidies and they *absolutely* are an effective way to direct behavior toward more environmentally friendly products and practices.

If the subsidy is forever, then it's not great behavior ("cronyism" implies the subsidy is designed by rich people to give rich people a break, and there's not really evidence of that). But as something that phases out as economies of scale kick in (which is precisely how it was designed), it achieves its goal of spurring new green industry and then it goes away.

Lastly, the cost being "hoisted on future generations" is a weak argument. This credit was estimated to cost the government about $7.5 billion for the entire 5-year period between FY'18 and FY'22, before any positive economic impact (say, from a car buying supercycle that supports new jobs). Against an average annual spending deficit hovering around $2 trillion over the same period, this program doesn't even chart. A dying planet has a cost to future generations too.

You have a lot of opinions on the general topic of federal government spending, but an apparently loose handling of the facts when it comes to this particular program.

[F32Fleet]

Originally Posted by sfi4

Agree to disagree, I guess. Buying behavior is a really interesting monster. Could people buying a $60-80K car afford to spend $10K more for electric? Sure. Would they actually make that buying decision? It's unclear, and in a lot of cases people would probably look at the economics, determine they'd never save the cost difference in fuel and maintenance, and make the easy choice of an ICE vehicle. One of the reasons I jumped in when I did — and made the most expensive car purchase of my life to date — was this program.

Your second point isn't correct (that they act as a disincentive to reduce costs). The subsidy increases the # of electric vehicles going out the door, which means more demand for parts like batteries, which means economy of scale kicks in and reduces overall cost. Combined with reuse of ICE vehicle parts/body panels by smart companies, that's how we're now seeing things like F150 and i4 MSRPs coming in close to equivalent ICE vehicles. Further, there's a ticking time bomb on the subsidy, making it clear to manufacturers that they're on their own after a set period. With costs coming in line, the new bill incentivizes other behaviors like cleaner / more ethical materials going into EV batteries. Industries *loves* gov't subsidies and they *absolutely* are an effective way to direct behavior toward more environmentally friendly products and practices.

If the subsidy is forever, then it's not great behavior ("cronyism" implies the subsidy is designed by rich people to give rich people a break, and there's not really evidence of [...]

Cronyism is government favoring one industry over another via direct payments, through regulations, or both. "Rent seeking" is another term.

As for the size of the amount given ytd a few billion dollars is still a few billion dollars and will only get larger.

[paulbazoV2]

Me personally ordered the M50 because of the tax credit. My M340 lease expires Oct 2022, I was going to replace it with an M440 GC with MSRP apron $66k, but then the I4 M50 with an MSRP of aprox $74k minus $7500 tax credit would be on the same price as the M440, so I decided on the M50. If there was no tax credit I would have stayed with the M440.