Elon wants your help! IRS invites consumers to comment on EV tax credit qualifications

CyberGus

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CyberGus

CyberGus

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https://www.engadget.com/teslas-lon...-qualify-for-the-ev-tax-credit-101229812.html

Tesla's Model Y could fall foul of new EV tax credit eligibility rules
Some versions are too light to be classified as SUVs and too expensive to qualify as cars.
Tesla Cybertruck Elon wants your help! IRS invites consumers to comment on EV tax credit qualifications {filename}

January 4, 2023 5:12 AM

Certain variants of Tesla's Model Y may not qualify for the $7,500 federal EV tax credit based on the IRS's latest guidelines, a situation that Elon Musk has called "messed up." It looks as though the five-seat Long Range version of the hatchback is too expensive as a car and not considered an SUV, so it falls outside the current guidelines. That could change, though, as the rules won't be finalized until March 2023.
The IRS has divided vehicles into two categories: vans, SUVs and pickup trucks under $80,000, and other vehicles under $55,000. For the first category, the vehicle must have 4-wheel drive or be rated at more than 6,000 pounds of gross weight. It also has to meet four of five other characteristics, most notably front and rear axle clearances of 18 centimeters or higher and a running clearance of at least 20 centimeters (no Model Y meets these specs).
Tesla Cybertruck Elon wants your help! IRS invites consumers to comment on EV tax credit qualifications {filename}

Internal Revenue Service
According to the IRS, only the 7-seat variants of the Model Y qualify as SUVs in the category up to $80,000, while the 5-seat vehicles (Long Range, AWD and Performance) are in the $55,000 section. The 7-seaters comfortably fall under the $85,000 limit, but all the 5-seaters exceed the $55,000 price, so they don't qualify.
Tesla doesn't have a specific AWD variant of the Model Y in the US (both the Long Range and Performance models are AWD), so it's not clear which model the IRS is referring to. The 5- and 7-seat versions cost the same, starting at $65,990 for the Long Range version before destination and order charges.
Critics are pointing out that far more polluting hybrid vehicles qualify for the tax credits, including two Jeeps, the Audi Q5 e Quattro, BMW X5 xDrive45e and Ford's Escape PHEV. However, if someone buys a Jeep Wrangler with 56 MPGe (23 MPG after the battery is depleted) instead of a Tesla Model Y with 122 MPGe, then the government clearly isn't doing the most it can to reduce carbon emissions. The IRS has invited consumers to comment on the matter, and Musk encouraged people to do so in a tweet.
 

ED_SFO

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Yeah makes no sense how the IRS are categorizing some vehicles as an SUV and others are not. The best/most popular suv ev on the market should have the full credit or else wtf is the credit for?
 

WildhavenMI

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What a complicated thing. I feel for the people responsible for coming up with the rules.

The incentives here should be designed to maximize net impact. The fact of the matter is that there's no pile of unsold EVs sitting around waiting for a price reduction, but there are people who are priced out of the EV market, so these price caps make sense.

The core problem IMO is that $55k is too much for a new electric SUV. The Model Y is overpriced, by like $10k or more. Tesla can take the margin hit and just price reasonably.

Tesla analysts routinely spout its high per-vehicle margin as a justification for valuiation. How about instead of a 40% margin, Tesla accept a 34% margin on these vehicles and just lower the damn price.
 

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What a complicated thing. I feel for the people responsible for coming up with the rules.

The incentives here should be designed to maximize net impact. The fact of the matter is that there's no pile of unsold EVs sitting around waiting for a price reduction, but there are people who are priced out of the EV market, so these price caps make sense.

The core problem IMO is that $55k is too much for a new electric SUV. The Model Y is overpriced, by like $10k or more. Tesla can take the margin hit and just price reasonably.

Tesla analysts routinely spout its high per-vehicle margin as a justification for valuiation. How about instead of a 40% margin, Tesla accept a 34% margin on these vehicles and just lower the damn price.
Tesla has the margin to do this. Ford and GM/ Cadillac do not. This would really make sense if Tesla is sitting on their hands in Austin because of lack of demand. It would CRUSH the competition, and massively increase Tesla ownership.

The one huge problem with dropping the cost. It would be a slap in the face to current owners. The resale prices would fall substantially.
 


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The one huge problem with dropping the cost. It would be a slap in the face to current owners. The resale prices would fall substantially.
I get it, but also...I feel a little "get over it" about it. Do what every other OEM does and create a down-market version with a "cheap trim" badge that minimizes the depreciation on the other models.

EDIT: This, from the guy who:
1) Bought perhaps the most overpriced vehicle ever made (but I love it)
2) Has lost ~35k in value on his X in the past 5 months.
 

JBee

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Scam, ban Tesla man.

That's the new policy it seems. Does anyone know how many subsidies the fossil industry still gets? Pointless promotion to reduce emissions unless they stop them too. But they won't have an successful popularity contest if they get rid of that with current fuel prices.
 

charliemagpie

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'How unfortunate complications effect non ununionized factories'

Should be the thesis.
 

ÆCIII

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The IRS of course knows they are corrupt and biased - and are simply 'inviting comments' as a posturing move and smoke screen to distract attention from the obvious.

No company actually needs or deserves any EV tax credits or disguised fractional bailout money anyway - especially not legacy auto.

There are much more important needs for allocation of tax-payer money, besides corporate manipulation attempts and back scratching by the government.

- ÆCIII
 


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The problem is mostly with production and not demand. Incentive should have inverse relationship to profit margin and price on every EV sold. Since it is really just going from Feds to the manufacturer, it should be in form of subsidies so the pricing is simple and clear for consumer and it is not income dependent.
 
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Except this isn’t the time for “those” comments. The IRS is merely interpreting the already passed law for purposes of practical implementation. The IRS is not taking comments regarding the law’s content.

Like it or not, this bill was not intended to subsidize all BEVs. It was intended to incentivize any low-emissions-via-electric vehicle that was (A) made (sufficiently) in North America, (B) not a “luxury” vehicle, and (C) not purchased by wealthy people. It did as decent a job at that as bills might ever be expected to accomplish - warts and all.

It’s one thing to explore how the bill failed to achieve its intent; and it’s another thing to disagree with its intent. But it’s weird to instead complain essentially that the bill’s language doesn’t accomplish an intent it wasn’t intended to accomplish.

Whether a vehicle is “more polluting” is essentially irrelevant to whether it incentivizes the development of battery technology manufactured in the U.S. and deployable to middle-American budgets.
 

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I sent the
Under the current IRS guidelines, the EV tax credit it weighted towards low-capacity hybrids due to the price caps. The hybrid Jeep gets a $7500 credit, while the Model Y gets nothing. Huh?




Link to article:
https://www.teslarati.com/irs-invites-consumers-to-comment-on-ev-tax-credit-qualifications/

Link to IRS for comment:
https://www.federalregister.gov/doc...ualified-plug-in-electric-drive-motor-vehicle
I sent the IRS a lengthy response yesterday, commenting on the status of Model Y as an SUV, hybrids, and charging infrastructure.
 

android04

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Except this isn’t the time for “those” comments. The IRS is merely interpreting the already passed law for purposes of practical implementation. The IRS is not taking comments regarding the law’s content.

Like it or not, this bill was not intended to subsidize all BEVs. It was intended to incentivize any low-emissions-via-electric vehicle that was (A) made (sufficiently) in North America, (B) not a “luxury” vehicle, and (C) not purchased by wealthy people. It did as decent a job at that as bills might ever be expected to accomplish - warts and all.

It’s one thing to explore how the bill failed to achieve its intent; and it’s another thing to disagree with its intent. But it’s weird to instead complain essentially that the bill’s language doesn’t accomplish an intent it wasn’t intended to accomplish.

Whether a vehicle is “more polluting” is essentially irrelevant to whether it incentivizes the development of battery technology manufactured in the U.S. and deployable to middle-American budgets.
I agree, and this is why I haven't commented on the IRS form. This has no effect on the law that already passed and the IRS doesn't have the power or responsibility to change it. Where commenting could be useful is if there were any ambiguous language in the law that could benefit sometime if the IRS interprets it a certain way.

Does anybody see any ambiguous language that can be used to reduce or eliminate incentives for hybrids, or to include all Model Y models? The only thing I could think of would have to do with how the government classifies SUVs.
 

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Under the current IRS guidelines, the EV tax credit it weighted towards low-capacity hybrids due to the price caps. The hybrid Jeep gets a $7500 credit, while the Model Y gets nothing. Huh?




Link to article:
https://www.teslarati.com/irs-invites-consumers-to-comment-on-ev-tax-credit-qualifications/

Link to IRS for comment:
https://www.federalregister.gov/doc...ualified-plug-in-electric-drive-motor-vehicle
Well, I just read through the IRS request for comment and it is not clear whether they are seeking comment as per the subject header of the message above. Since it isn’t clear I do not think the comments I shared with them are a waste, but maybe I should have sent them to my elected congressional representatives.
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