The rules may be changing with the possible passage of new legislation in congress. In theory it will extend the 30% solar investment tax credit for 10 years and give a tax credit on used battery electric vehicles. In both cases, making the credit refundable for those without enough tax liability looks like it didnt make it but in theory the solar ITC can carry forward to a future year while an EV credit does not. Things could get amended, or the bill could get shot down so in most cases it may be best to hold off on signing anything until it becomes law.
Hold up on Solar Investments and possibly used electric vehicles
- Thread starter peakbagger
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The EV credit for new EVs will be extended beyond the 200k per maker... Tesla and GM and Nissan will get rebates again. But the rebates will have a means test limit for eligibility (<$150k income for a single, <$300k for a couple).
Thanks for the heads up. I fall into that category of not having enough tax liability so I have been contemplating an IRA conversion instead of carrying that liability forward to future years.
I am not a tax pro and the law is not signed so caveat emptor. I expect I will have that to keep in mind next year when I am not working but plenty of IRAs I can convert or low basis equities to sell.
I'm particularly psyched about the potential for tax credits on used EVs.
It seems that early concerns about premature battery failure resulted in good values for those willing to take a chance on a used EV.
We bought a used 2015 Leaf and have had a great experience with it.
I'm looking forward to the chance to buy a used Ford Lightning when resale is eventually allowed.
There are those of us too that are willing to replace batteries with improved models if the base cost of the used vehicle is a good value.
It seems that early concerns about premature battery failure resulted in good values for those willing to take a chance on a used EV.
We bought a used 2015 Leaf and have had a great experience with it.
I'm looking forward to the chance to buy a used Ford Lightning when resale is eventually allowed.
There are those of us too that are willing to replace batteries with improved models if the base cost of the used vehicle is a good value.
EbS-P
Minister of Fire
I don’t see the used lightning market being affordable untill the the wait to buy a new one is 4 weeks or less. Cyber Truck may have some impact on demand. I think the idea of new improved battery in a used car is good but I don’t see dealers ever doing that. So we will be left with 3rd party products. And the reality is even those will likely be more than the value of a used EV that’s old. And honestly until we get supply chain issues sorted all this did was increase the value and thus purchase price of a used EV.
The solar credit extension is huge as I don’t see natural gas prices dropping.
With cobalt and nickel coming from some less favorable countries, the battery pack materials could be a stopper for some. For example, it looks like the Polestar could be excluded by these rules.
"To be eligible, vehicles will need batteries with raw materials extracted or processed in a country with which the United States has a free-trade agreement, and battery packs must have a large amount of components sourced from North America.
The legislation also introduces price caps of $55,000 for new cars and $80,000 for pickup trucks and SUVs, as well as income caps for buyers. For new vehicles, those caps are $150,000 for single-filing taxpayers and $300,000 for joint filers. For used cars, the caps are lowered to $75,000 for single filers and $150,000 for joint filers. But the legislation also allows taxpayers to receive credits at the point of sale."
EV tax credit extension with $7,500 point-of-sale rebate, $4,000 for used EVs could pass Senate soon
The legislation also introduces price caps of $55,000 for new cars and $80,000 for pickup trucks and SUVs, as well as income caps for buyers.
US has free trade agreements with the following countries:
- Australia
- Bahrain
- Canada
- Chile
- Colombia
- Costa Rica
- Dominican Republic
- El Salvador
- Guatemala
- Honduras
- Israel
- Jordan
- South Korea
- Mexico
- Morocco
- Nicaragua
- Oman
- Panama
- Peru
- Singapore
The big drop in used EV prices was tied to the federal incentives for new EVs why buy used when new was not much more? Putting in reasonable EV credit for used EVs would potentially restore balance to the market but the devil will be in the details I could see scamming going on where the same EV would get bought and sold multiple times to get the EV credit. There would need to be tight regulations to control it.
EbS-P
Minister of Fire
Demand is so high now used Teslas are/were selling for near new prices. This will just increase their prices more I think.
Oh and the Model Y is an SUV so it does qualify as long as it’s under 80k. Crazy prices.
I agree there does need to be some regulations. We will see what the final bill looks like.
Oh and the Model Y is an SUV so it does qualify as long as it’s under 80k. Crazy prices.
I agree there does need to be some regulations. We will see what the final bill looks like.
I don't see the benefit in an incentive to buy a used EV. The incentive should exist to put more EVs in the road, once its purchased new that EV should not be subsidized again. Instead the money should be used for more or larger subsidies on the purchase of new EVs to incentivize customers to buy EVs and therefore automakers to build more EVs.
So what if it drops the value of used, if a $50k EV gets a $10k incentive, and sells used for $32k the owner only looses $8k in depreciation, because they didn't pay for the first $10k.
So what if it drops the value of used, if a $50k EV gets a $10k incentive, and sells used for $32k the owner only looses $8k in depreciation, because they didn't pay for the first $10k.
EbS-P
Minister of Fire
I imagine that most used EVs now are being replaced by a new EV. EV rental fleet sales will soon make a bigger share of used EV sales too.
Seems as currently written the new tax credit is not much help, the old one is better. Almost none of current EV's would meet the criteria for battery materials sourced from North America. I was hoping for something better.
I must say I support the domestic content/manufacturing phase in. If you look at the solar industry, all the technology was developed in the US, The government dumped millions into Evergreen and more into Solyndra, both great products but they were driven out of business by China's policy to underprice any other production in the world until they drove competition out. Less than 6 months ago the manufactured crisis of the month was that without off shore panels made in 3rd world countries with China sources parts the solar farm movement would be shut down in the US. The government finally relented and gave developers two years of grace while domestic production ramps up.
I think it would have at least two effects:
1) Many people when they decide to buy a car, planning to sell it in a few years, look at resale price numbers. There are many sites (like Edmunds) that compile that data. As noted, incentives tend to make resale look terrible, and I know people that have not gotten even a reasonably priced EV just for this reason... fear of poor resale. This effect was going away with the end of subsidies, but in a new 'subsidies forever' world, it will get worse again. Boosting EV resale artificially (by a fraction of the new incentive) will support high demand for NEW vehicles. That is, it will help recruit new buyers of new EVs.
2) Many people never buy new cars, and only buy used cars. Many of these people have been shut out from the EV market so far, scared of getting in (just like most new buyers). The used EV incentive will help recruit new used-EV buyers from the used car buyer population, via price reduction relative to non-EV used cars. The used incentive, while smaller, will make a bigger difference to these buyers.
Furthermore, as market penetration expands, if the incentives are still in place, driving down demand for used ICE vehicles will drop their prices, hurt ICE car resale rates, and make them less attractive to buy new. Also selling more NEW EVs.
This aspect of the bill is important. It is not blind protectionism, nor is a back door way to reduce the cost to the govt.
The goal here is a combination of US-centric industrial policy and national security. While the US makers are all on-board for transitioning to EVs as fast as possible, the battery material supply chain (from mining/refining and electrode material prep) is NOT in their skill set. So ofc they will contract with other suppliers to do that. My Bolt EV battery (and its electrode materials) were all made in S. Korea, from minerals I assume came mostly from China.
The legacy car makers ARE building battery factories in the US. But they are still sourcing the finished electrode materials from overseas.
The bill aims to develop a domestic supplier base for making the electrode materials (and even sourcing the minerals).
The requirements get more stringent over time. I would **hope** that the law was written so as to attainable by the current on-shore development curve, without blocking all subsidies. If the requirement was too lax (or slowly implemented) I would not trust the car makers to do what is required... I think they would just ignore this requirement and worry about it later, assuming perhaps that it would get overturned by a later administration or Congress.
IOW, if that requirement didn't bite a little, its teeth would be worthless.
indeed, in my view technology like that - flow batteries - are THE answer to grid issues. It's a battery, but the energy density is so high because one does not need an electrode to store ions, instead you just flow the ions (in high density, because liquid).
I don't know whether this particular chemistry of flow battery will be the broadly adopted solution, but I do think flow batteries are going to solve a lot of problems.
I don't know whether this particular chemistry of flow battery will be the broadly adopted solution, but I do think flow batteries are going to solve a lot of problems.
