Electrek: Dems propose new $12,500 electric car rebate, Tesla left with $4,500 disadvantage

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Sirfun

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I kind of like this. Everything save the union clause makes sense. The vehicle caps are much saner than the 40k and 80k numbers we saw previously. The only eyebrow raiser is the "vans under 54k". What do they have against vans, they are some of the most practical vehicles on the market.

Even with the union clause Tesla is **still** going to be the largest beneficiary because they have the largest capacity and market share in the US by a large margin. Mostly I think the dollar amount of the union clause makes the total incentive amount entirely too high. When we start getting $25,000 sedans, is the government really going to kick in $12,000?

I'm just wondering... is this going to be one of those silly things Tesla bypasses the way they bypassed New Mexico's ban on first party dealerships. Will we see a "Tesla Employees Union" with little or no voting rights or something similar?
The Van limit in the original article of $54,000 is wrong. I looked at the PDF file and the Van limit is $64,000. That's makes more sense.

It's on page 285 of 645 in this PDF file.
https://waysandmeans.house.gov/site...ans.house.gov/files/documents/SUBFGHJ_xml.pdf
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Diehard

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I said it earlier, I'll say it again. Ford makes their EV's in Mexico. They shouldn't get that $4,500 unless they move the production to US and give US workers the jobs.
I never said it before and I will never say it again. Lightning is built in Michigan but I think Mexican Mustang should not even get the current $7,500 so if I end up with a Lightning, there is some credit left for me.
 

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So reading it, the "Union" clause is actually called "Domestic assmebly"

  1. ‘‘(1) DOMESTIC ASSEMBLY QUALIFICATIONS.—
  2. 4 The term ‘domestic assembly qualifications’ means,
  3. 5 with respect to any new qualified plug-in electric ve-
  4. 6 hicle, that the final assembly of such vehicle occurs
  5. 7 at a plant, factory, or other place which is operating
  6. 8 under a collective bargaining agreement negotiated
  7. 9 by an employee organization (as defined in section
  8. 10 412(c)(4)), determined in a manner consistent with
  9. 11 section 7701(a)(46).
Not quite sure what section 7701 is, a quick google led me to some maritime laws.

But presumably since it's called Domestic Assembly Requirements that implies it's made in the US so Mexican made Ford's wouldn't qualify... not sure though.
 

Sirfun

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I never said it before and I will never say it again. Lightning is built in Michigan but I think Mexican Mustang should not even get the current $7,500 so if I end up with a Lightning, there is some credit left for me.
I hope Ford builds the Lightning and all their vehicles in the US. I read this article and may have wrongfully assumed they were going to produce Lightnings, with Mach-E in Mexico.

https://www.reuters.com/article/us-...-new-vehicle-in-mexico-not-ohio-idUSKBN2B82V9
 

firsttruck

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I hope Ford builds the Lightning and all their vehicles in the US. I read this article and may have wrongfully assumed they were going to produce Lightnings, with Mach-E in Mexico.

https://www.reuters.com/article/us-...-new-vehicle-in-mexico-not-ohio-idUSKBN2B82V9

In that Reuters article is a quote
-----------------------
Sam Fiorani, a vice president at AutoForecast Solutions, said Ford planned to launch production of electric crossovers at the Mexico plant in June 2023 under both the Ford and Lincoln brands.
-----------------------

Ford is planning to do electric trucks in USA but Ford Mexico plants will do more models of electric crossover SUVs.
 


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Who knew Fiat had so much money??
 

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..... When we start getting $25,000 sedans, is the government really going to kick in $12,000? ....
Yeah this is really dumb. I am no master mind genius but this not a good idea. It wouldn't take much to make a $12,000 EV that meets the absolute minimum requirements to be a "sedan" at a $10k manufacturing cost. Whoever does this first would just be printing money. Would I spend $12k for very cheap quality car? Uh no. Would I spend $12K for a very cheap quality car with an on the spot $12k rebate? Of course I would and every single year that I am allowed to. I'd be racing that thing all over in the dirt, mud, over ramps you name it. It was FREE! I also know, I would not be alone.

I have not read the proposal and perhaps I should but this really should be a % based rebate and NOT a flat dollar amount.

Law makers should be aware by now when to use a scaling factor vs flate values, SMH.

Who vets this stuff? LOL
 

GnarlyDudeLive

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Boo on the union clause. $7500 is more than enough. $4000 if > 50% foreign content/value. VW might still make it, not sure, they are right behind Tesla and deserve some credit as an early supply driver.

The 200,000 EV credit worked very well it should be phase out. Everybody else had enough time so well ____-em
I have to agree for a few reason:

1. Any decent newer EV model is pretty much on backorder, no incentive is going to put more EV's
on the road if they cannot be delivered.

2. Most manufacturers already have committed to aggressive timelines that I don't think they can even reach because of #1 and battery availability. We would need 100X the battery production in the next 10-15 years and I just don't see that happening without some mystery major breakthrough...

3. Peoples mindset is rapidly changing to understand that an EV, for the hands-off person (most peole), is just way easier to maintain as it ages than an ICE ride and cheaper to operate. How rapidly is dependent on more EV exposure which is also limited to #1.
 

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Dems propose new $12,500 electric car rebate, Tesla left with $4,500 disadvantage
Fred Lambert
- Sep. 11th 2021 9:14 am PT

@FredericLambert

tesla-fremont-1200.jpg


Democrats have proposed an updated electric car incentive program at the federal level, which would go through their $3.5 trillion social spending bill.

It would remove the limit on the number of vehicles and replace it with a timeline, introduce a higher payout up to $12,500 and make it point-of-sale, but there are also new restrictions that would put Tesla at a $4,500 disadvantage.

Ever since President Biden took over the White House and the Democrats achieved a majority in both the House and the Senate, they have made it clear that they plan to reform the federal EV incentive program.
The current program has some important flaws. The main one is that it caps the $7,500 tax credit to 200,000 electric vehicles per manufacturer.

It puts automakers who were early proponents of electric vehicles, like Tesla and GM, at a disadvantage.
The second biggest problem is that the incentive takes the form of a $7,500 tax credit, which requires you to have the equivalent federal tax burden, and it is only applied on your next taxes.

Over the last year, there have been several proposals to reform the EV incentive.

The latest one is the Clean Energy for America Act, which would increase the incentive to up to $12,500 and remove the threshold of 200,000 EVs delivered by manufacturers.

Now the House Ways and Means Committee has approved a new version of the EV incentive program as part of their $3.5 trillion social spending bill.

Here are the main changes:
  • Remove the 200,000 vehicles per manufacturer cap
  • Keep the $7,500 incentive for new electric cars for 5 years
  • Make the $7,500 incentive a point-of-sale discount instead of tax credit
  • Add an additional $4,500 for EV assembled at union factories
  • Add another $500 for EVs using batteries made in the US
  • After the first 5 years, the $7,500 becomes only for US-made electric vehicles and it applies for another 5 years.
  • They are introduce price limits on the EVs eligible for the incentives:
    • Sedans under $55,000
    • SUVs under $69,000
    • Pickup trucks under $74,000
    • Vans under $54,000
  • They are also introducing caps on income to get access to the incentives, but they are fairly high at an adjusted gross income of up to $400,000 for individuals and up to $800,000 for joint filers.
As usual, these terms could change as the bill goes through the legislative process.

Electrek’s Take
I think that these changes are mostly positive. I like that they are giving foreign automakers a grace period. That will be really helpful not to slow the momentum of EV adoption in the US.

The 10-year period is more than enough to support EV adoption.

As for the price limits, I think they are high enough if not a little too high for the SUVs and pickup trucks.

My main issue is with the $4,500 additional incentive to electric vehicles that are coming out of union factories.

That has nothing to do with the reason we should be discounting EVs versus fossil fuel-powered vehicles.

The reason is to account for the cost to the environment and health that comes with burning gas. It has nothing to do with whether employees making those vehicles, electric or not, are part of a union.

The company most affected by this is going to be Tesla since their employees have not unionized.

I can’t help but think that this is a politically motivated move rather than a pro-environment move, which is disappointing.

However, I’m not going to complain too much because I think $7,500 is plenty of money for an EV incentive and $12,000 is likely too much in most cases.

The result is just really a $4,500 disadvantage to Tesla, which the company will have no problem with considering they have still been dominating the US market over the last two years with a $7,500 disadvantage.
I like it! Except for the part where we're discriminated for not belonging to a Union. What if the tables were reversed, and there was an additional $4,500. for cars that came out of non-union factories? Someone would be screaming bloody murder, right? I just seems wrong to punish a company (or its customers) for not buying union. Favoritism, anyone?
 
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JBee

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Does that mean I can now claim the the incentive to buy a CT in the USA as well as a foreign citizen because its now at the point of sale? I have US property if that helps.
 


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Remember, these numbers have to be managed through conciliation with the Senate bill, often that means they split the difference.

And only Tesla has all-US built battery packs, as far as I know, while only the Lightning and what are Union? Their Mexico facilities aren't Union. Tesla isn't the only one non-unions. Sheesh.

-Crissa
 

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Dems propose new $12,500 electric car rebate, Tesla left with $4,500 disadvantage
Fred Lambert
- Sep. 11th 2021 9:14 am PT

@FredericLambert

tesla-fremont-1200.jpg


Democrats have proposed an updated electric car incentive program at the federal level, which would go through their $3.5 trillion social spending bill.

It would remove the limit on the number of vehicles and replace it with a timeline, introduce a higher payout up to $12,500 and make it point-of-sale, but there are also new restrictions that would put Tesla at a $4,500 disadvantage.

Ever since President Biden took over the White House and the Democrats achieved a majority in both the House and the Senate, they have made it clear that they plan to reform the federal EV incentive program.
The current program has some important flaws. The main one is that it caps the $7,500 tax credit to 200,000 electric vehicles per manufacturer.

It puts automakers who were early proponents of electric vehicles, like Tesla and GM, at a disadvantage.
The second biggest problem is that the incentive takes the form of a $7,500 tax credit, which requires you to have the equivalent federal tax burden, and it is only applied on your next taxes.

Over the last year, there have been several proposals to reform the EV incentive.

The latest one is the Clean Energy for America Act, which would increase the incentive to up to $12,500 and remove the threshold of 200,000 EVs delivered by manufacturers.

Now the House Ways and Means Committee has approved a new version of the EV incentive program as part of their $3.5 trillion social spending bill.

Here are the main changes:
  • Remove the 200,000 vehicles per manufacturer cap
  • Keep the $7,500 incentive for new electric cars for 5 years
  • Make the $7,500 incentive a point-of-sale discount instead of tax credit
  • Add an additional $4,500 for EV assembled at union factories
  • Add another $500 for EVs using batteries made in the US
  • After the first 5 years, the $7,500 becomes only for US-made electric vehicles and it applies for another 5 years.
  • They are introduce price limits on the EVs eligible for the incentives:
    • Sedans under $55,000
    • SUVs under $69,000
    • Pickup trucks under $74,000
    • Vans under $54,000
  • They are also introducing caps on income to get access to the incentives, but they are fairly high at an adjusted gross income of up to $400,000 for individuals and up to $800,000 for joint filers.
As usual, these terms could change as the bill goes through the legislative process.

Electrek’s Take
I think that these changes are mostly positive. I like that they are giving foreign automakers a grace period. That will be really helpful not to slow the momentum of EV adoption in the US.

The 10-year period is more than enough to support EV adoption.

As for the price limits, I think they are high enough if not a little too high for the SUVs and pickup trucks.

My main issue is with the $4,500 additional incentive to electric vehicles that are coming out of union factories.

That has nothing to do with the reason we should be discounting EVs versus fossil fuel-powered vehicles.

The reason is to account for the cost to the environment and health that comes with burning gas. It has nothing to do with whether employees making those vehicles, electric or not, are part of a union.

The company most affected by this is going to be Tesla since their employees have not unionized.

I can’t help but think that this is a politically motivated move rather than a pro-environment move, which is disappointing.

However, I’m not going to complain too much because I think $7,500 is plenty of money for an EV incentive and $12,000 is likely too much in most cases.

The result is just really a $4,500 disadvantage to Tesla, which the company will have no problem with considering they have still been dominating the US market over the last two years with a $7,500 disadvantage.
Would this apply to purchases already made in 2021?
 

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IMO... Tesla was not excluded from the transition invite that the President held. They are not transitioning from producing ICE vehicles. An ICE oem has a very different set of issues than a start up has, especially unionized factories. It costs a certain amount to develop BEV, a certain amount to produce, a certain amount to transition a factory. The end result being a vehicle that costs more than an ICE vehicle for a long time. After all ICE has a century of development. You have to fire ice engine "engineers" and hire electronics engineers. Those engineers are unionized and have negotiated a retirement package that has costs. Those factories would become useless...
The end result being that it is not worth it for ICE oem to produce BEV. Their BEV will be more expensive than a start up for a long time... economically they are better off just continuing to produce ICE vehicles and if sales in developed world are outlawed just continue to sell in the rest of the world. This is not the goal. The goal is a rapid transition and quickly getting cost of bev down, not just transition the emmisions to developing world.
It is easy to say that ICE oem delayed development of bev and that they should have tried harder and that since they have been unwilling to change they should just be allowed to disappear. But! Allowing them to disappear will be a long slow process... it will delay the adoption of bev and it will shift the emmisions to areas that can't afford to outlaw ICE sales.
It is much better to incentive the additional price, get the transition to occur quickly to get costs per vehicle under control so the world can afford bev. This is what investment looks like. Without it we will all be driving Teslas or Chinese BEV and in Brazil they will all be driving Ford and GM ICE vehicles. Nothing will be gained for the climate. Only winners would be Chinese BEV.
 

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It wouldn't take much to make a $12,000 EV that meets the absolute minimum requirements to be a "sedan" at a $10k manufacturing cost. Whoever does this first would just be printing money.
I only quoted a small bit, but one of the other requirements the car has to have 4 wheels, a 40kWh battery, and be street legal. I believe it also limits the rebate to 50% of the cost of the car.

It has some dumb bits but it’s not quite that dumb.
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