EV Tax Incentive [closed due to political discussions]

[cybertruck808]

Regardless of one's political preferences for such a plan, I'm not sure that such a proposal is set to pass Congress. Part of the problem here is that Dems will only control and absolute bare majority in the Senate, and only then because the VP breaks the tie. With at least one member of the Democrat caucus--and all GOP Senators--being against changing the filibuster rules, they will need at least 10 Republicans on board with such legislation to break an almost certain filibuster on any such move. Will this be impossible? I am not sure.

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[cybertruck808]

That would be fraud.

-Crissa

True. Whether it would be unlawful fraud, that I'd have to read more up on. I imagine that the law would prohibit such a practice on Tesla's part, but I'm not 100% sure.

 

[Mini2nut]

I truly feel that 2021 will be the tipping point for the adoption of BEV’s. The new administration is will help. I predict BEV incentives and tax credits will be coming down the pipeline in 2021-22.

 

[ajdelange]

Part of the problem here is that Dems will only control and absolute bare majority in the Senate,..

Remember that a credit insures that BEVs are "Made by billionaires, bought by millionaires and paid for by the rest of us". Don't be so sure that the Dems are going to push for this.

 

[Chett]

So now that the left is in power, do you think they’ll remove the $7,500 tax incentive limitation for Tesla?

Yes Biden has said he’s in favor of reinstalling the EV tax break

 

[DarinCT]

If we got an EV credit again, Tesla would likely increase the cost of the vehicles to reflect that credit, making it a wash. 9nce the credit goes away, prices would come back down.

Not a total wash though definitely agree not full value.

That would be fraud.

-Crissa

If you mean changing the reservation, sure, totally fraud. If you mean the changing the going price, not fraud at all. You didn't specify.

*****

Tesla knows exactly how much it costs to make a car, how much demand there is at a given price and the ability to adjust the price tag up and down as they see fit e.g. Model 3 Standard Range. They will extract the maximum possible margin from the tax credit via consumers upfront payment. The ideal way to do this is to start 100% of the credit and sell, then walk their way down the line toward 0% occasionally going back up in price to catch/punish hold-outs who think they can wait. How much consumers are willing to give to Tesla remains to be seen. I'm all-in so if I have to "give" Tesla my tax credit, so be it.

 

[Crissa]

True. Whether it would be unlawful fraud, that I'd have to read more up on. I imagine that the law would prohibit such a practice on Tesla's part, but I'm not 100% sure.

I am.

-Crissa

 

[Crissa]

If you mean the changing the going price, not fraud at all.

Yes, changing the price to capture these tax rebates would be tax fraud. They were written to exclude markups at the retail level.

-Crissa

 

[DarinCT]

Yes, changing the price to capture these tax rebates would be tax fraud. They were written to exclude markups at the retail level.

-Crissa

I was unable to find anything in the U.S. Code. I found the IRC (Internal Revenue Code) that pertains and found that 2 and 3 wheel vehicles can count as well which is interesting but besides the point. I'm curious if you could point me to something forbidding manufacturers from increasing the price.

 

[GnarlyDudeLive]

I was unable to find anything in the U.S. Code. I found the IRC (Internal Revenue Code) that pertains and found that 2 and 3 wheel vehicles can count as well which is interesting but besides the point. I'm curious if you could point me to something forbidding manufacturers from increasing the price.

Perhaps we could get a second Tax incentive for adding in the option of the Cyberquad! J/K.

 

[Luke42]

2) Incentivize manufacturers to build EV/hybrid vehicles with a bigger market possibility.

The tax incentives came and went for hybrid vehicles.

Those tax incentives seem to have fulfilled their purpose of adding "activation energy" (my term, chemistry analogy) to the hybrid car market. Now, you can buy hybrids in a variety of sizes and shapes, just like you can a turbo V6 (or whatever).

There's no reason to bring back the hybrid incentives. We're now at the point where the market can (and should) sort it out.

--

Now let's extend this reasoning to the EV market. The sunset clause in the EV tax incentive was intended to withdraw the subsidy once "activation energy" had been achieved at a particular automaker, so that the market can do its thing.

Tesla and GM are there, but others are not.

It sure looks like the EV incentives are working as intended.

But have we arrived at the same situation that we see with hybrid vehicles? All I know is my gut says maybe!

--

Next question:

Will Tesla sell more vehicles if the cost is reduced by $7500? Probably not, because their cars are desirable at their current price-point.

Will GM sell more more vehicles if the cost is reduced by $7500? Probably, because their current lineup isn't as desirable as Tesla's.

--

So, would reinstating this subsidy actually accomplish anything? Maybe!

And that's where we are in the EV adoption curve.

 

[Dids]

Not a total wash though definitely agree not full value.



If you mean changing the reservation, sure, totally fraud. If you mean the changing the going price, not fraud at all. You didn't specify.

*****

Tesla knows exactly how much it costs to make a car, how much demand there is at a given price and the ability to adjust the price tag up and down as they see fit e.g. Model 3 Standard Range. They will extract the maximum possible margin from the tax credit via consumers upfront payment. The ideal way to do this is to start 100% of the credit and sell, then walk their way down the line toward 0% occasionally going back up in price to catch/punish hold-outs who think they can wait. How much consumers are willing to give to Tesla remains to be seen. I'm all-in so if I have to "give" Tesla my tax credit, so be it.

You make it sound like Tesla is making cars to profit from making cars. Somewhere i saw an idiot say that Tesla doesn't sell cars it sells stock. His argument was that Elon was in it for the money he makes from the stock. Both of these arguments totally ignore what Elon has said is the goal. I believe Elon when he says switching to sustainable electric is the whole purpose, he has enough money he owned multiple homes and realized that was in direct opposition to sustainable, he sold the homes. Do I think he is electric Jesus. No, he is a dorky human like the rest of us but he has proved several times that he isn't inherently evil or in it for more money.
On the tax breaks... will the incentive cause you to buy a CT3 vs 2 then it is wasted. If 2 was enough to fulfill the need then you are only buying more than you need and that is wasteful.
If the incentive allows you to buy CT vs an ICE then it is useful.
But in both these cases Tesla wins and increasing the price to make more profit would negate both these case wins.
BTW. If they put an incentive back on im totally getting a tri motor instead of the 2. I don't need it... I want it!

 

[DarinCT]

You make it sound like Tesla is making cars to profit from making cars. Somewhere i saw an idiot say that Tesla doesn't sell cars it sells stock. His argument was that Elon was in it for the money he makes from the stock. Both of these arguments totally ignore what Elon has said is the goal. I believe Elon when he says switching to sustainable electric is the whole purpose, he has enough money he owned multiple homes and realized that was in direct opposition to sustainable, he sold the homes. Do I think he is electric Jesus. No, he is a dorky human like the rest of us but he has proved several times that he isn't inherently evil or in it for more money.
On the tax breaks... will the incentive cause you to buy a CT3 vs 2 then it is wasted. If 2 was enough to fulfill the need then you are only buying more than you need and that is wasteful.
If the incentive allows you to buy CT vs an ICE then it is useful.
But in both these cases Tesla wins and increasing the price to make more profit would negate both these case wins.
BTW. If they put an incentive back on im totally getting a tri motor instead of the 2. I don't need it... I want it!

I agree with everything you said though whether Elon is in it for the money or not or evil or not is besides the point. If the company Tesla doesn't stay in business then the vision can't be fulfilled. Among the revenue channels, stock sales, car sales, energy credit sales are the top three. Of those, only selling the product is sustainable and proof of value. [One could easily argue that energy credit sales will occur until all the dinosaurs die out but I'd rather they die from competition.]

If, in some weird future, there's no need to open a new plant, do more R&D, or otherwise spend billions on capital expenditures, then I think Elon probably would ignore the tax credit and increase sales numbers even if it meant lower total revenue (assuming he still has the same control and interest in the company).

 

[jerhenderson]

The

That's the plan.

Will the Republicans block it in the Senate? They have blocked altering the EV incentives for eight years, so...

-Crissa

GOP lost Senate majority.....now progress can begin.

 

[Crissa]

The GOP lost Senate majority.....now progress can begin.

That's not how the Senate works. The Majority party decides what gets debate, but it also takes 60 Senators to choose what to vote on.

If we can get 50 Senators to decide to break the second rule, it would be helpful.

-Crissa