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

[Ogre]

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...

Except we know how this plays out.

The company passes the government subsidies direct to shareholders in the form of buybacks and increasing dividends, and underfunds the retirement plan (legally). Then when the next fiscal crisis happens they beg the government for a bailout.

That’s how American Capitalism works.

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[Sirfun]

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.

I may not agree with this, but I commend you for a very well-thought-out and written response. Well done.

 

[Dids]

Except we know how this plays out.

The company passes the government subsidies direct to shareholders in the form of buybacks and increasing dividends, and underfunds the retirement plan (legally). Then when the next fiscal crisis happens they beg the government for a bailout.

That’s how American Capitalism works.

That's because American Capitalism is not the capitalism of the invisible hand etc. That was proven to be a false ideology during the robber baron era.
I think it will be very hard for the company to pass a subsidy back to shareholders when that subsidy is a price subsidy given to buyers.... yes they will profit from the sale but it will be a small profit.

 

[Diehard]

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

I see this as a % based system. It is kinda like tax code; the less you can afford, the higher percentage of the car you get as a rebate. The more you can afford the less likely you need a rebate so the lower percentage you get. If they are going to make it variable, it should be the opposite; it should be higher percent of the car at lower price point and gradually diminish as the price goes higher.

I think there would be some sort of penalty for owning a non Tesla EV if you are at a supercharger to keep Tesla owners feeling special and keep superchargers from getting flooded with out of juice drivers.

 

[firsttruck]

That's because American Capitalism is not the capitalism of the invisible hand etc. That was proven to be a false ideology during the robber baron era.
I think it will be very hard for the company to pass a subsidy back to shareholders when that subsidy is a price subsidy given to buyers.... yes they will profit from the sale but it will be a small profit.

When there is a subsidy it is not hard to get more money to the company executives & shareholders. the will just raise the products price more than the extra cost.

For new products that come to market after the rebates/credits are in-effect, the OEMs will increase the MSRP.

 

[Dids]

When there is a subsidy it is not hard to get more money to the company executives & shareholders. the will just raise the products price more than the extra cost.

For new products that come to market after the rebates/credits are in-effect, the OEMs will increase the MSRP.

In that case wouldn't someone just buy the less expensive tesla?

 

[firsttruck]

In that case wouldn't someone just buy the less expensive tesla?

Yes, sure customers would just buy Teslas if Tesla selling price was lower and everything else was even.

Tesla's manufacturing costs will be lower but because of Tesla can not keep up with demand, Tesla's prices might be higher.

But also "everything else is NOT even"
The legacy auto OEMs, legacy auto OEM dealers, legacy auto OEM's news media accomplices, legacy auto OEM's politicians will continue to spread FUD about Tesla as a company and Tesla products. Scare customers into not buying Teslas to buy only products from legacy OEMs.

FUD examples:

Only legacy OEMs have 100 years of experience.
(Despite that the supposedly "necessary" 100 years of experience is actually ill-relevant to today's BEVs).

Tesla will go bankrupt so in the future customer will have no warranty or service.
(Despite GM being the one that went bankrupt just 12 years ago and today Ford being very deep in debt)

Having dealer/service center near every customer (in every little town) is critical.
(Despite BEVs needing no or very little service compared to ICE).

Every customers needs 600 miles range so need buy hybrids (even non-plugin hybrids) instead of full BEV.
(Despite the vast majority of customer drive less than 60 miles a day).

Charging BEVs take forever and it is imperative refueling be done in 30 seconds.
(Despite customers with BEVs, mostly charge at home while sleeping or charge while at work (or shopping/eating at restaurants) thus hardly ever having need for other charging except on long trip. Most customers will save dozens of hours a year).

Full BEVs catch on fire all the time, fires almost impossible to put out, and hundreds of customers in car by burning up in EVs.
(Despite ICE vehicles having higher fire risk)

Tesla's Autopilot & FSD are too dangerous and crash all the time.

 

[Dirt Worker]

How on earth are they explaining the rational behind union favoritism? Union campaign contributions? Lobbyists? The first round of incentives benefited people who were in a tax bracket that probably didn't need or care about it. Affordable EV incentives would make the most sense to me.

 

[Ogre]

I think it will be very hard for the company to pass a subsidy back to shareholders when that subsidy is a price subsidy given to buyers.... yes they will profit from the sale but it will be a small profit.

There is no difference Between paying the company and paying the consumer who pays the company. Ford, GM, and Dadge/ Ram customers get their truck for 4,500 less which means they can charge 4,500 more to the customer than Tesla.

So the Lightning starts at 28,000 and the Cybertruck starts at 32,000. The car companies advertise these incentives.

 

[Cyberman]

Would this apply to purchases already made in 2021?

I doubt it will be retroactive.

 

[Crissa]

There is no difference Between paying the company and paying the consumer who pays the company. ...

There's a large psychological difference. As well as logistical - paying the consumer makes sure that the consumer's choice is in the loop. Consumers won't buy things they don't want, basically, but companies might build useless things that fit the letter of the law.

-Crissa

 

[Cybertruckee]

Dang Dems, they keep giving money to the middle class and the poor.

Who do they think they are, democratic socialist Nordic countries like Norway, Denmark, etc. who happened to have the happiest, most secured and contented people on earth?

Why don't they just give the money to the rich billionaires. They need a bigger yacht and another vacation home in the South of France.

Ok, if this happens, thank you. My wife must be right for the first time -- voting for you.

 

[SwampNut]

How on earth are they explaining the rational behind union favoritism? Union campaign contributions? Lobbyists? The first round of incentives benefited people who were in a tax bracket that probably didn't need or care about it. Affordable EV incentives would make the most sense to me.

The union mafia is overwhelmingly pro-democrat since they overwhelmingly support the union mafia. Backs scratched, and all that.

Note: I am absolutely not a republican either.

 

[Cybertruckee]

The union mafia is overwhelmingly pro-democrat since they overwhelmingly support the union mafia. Backs scratched, and all that.

Note: I am absolutely not a republican either.

Duh, economics. As in the famous "It's the economy, stupid!"

Republicans believe in Trickle Down (Voodoo economics according to their own ex President Bush Sr) economics giving tax cuts and subsidies to big business, billionaires in millionaires on the theory it will create jobs and economic boom. Did not happen under Reagan, Bush Jr and now under Trump but instead caused massive deficits and recessions.

Dems are into Keynesian economics where workers and middle class are given higher wages leading into virtuous cycle of essential necessity spending creating higher production and boosting the economy as what happened with the economic recovery and boom under FDR, Bill Clinton,Obama and now Biden.

Yup, the intersection of politics and economics -- always is and always will be.

And my background is economics as short and long term financial planning and forecasting for several global-multinational companies.

 

[Ogre]

Anti BEV bill

Err... wot?

It gifts people $7500 - 12,500 to buy an EV.

Not sure how you can say this.

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