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GMs success with the Volt, 100K cars so far, and the almost certain success with the Bolt (first affordable EV > 200mile range) is going to come back to bite them in 18-24 months when they reach the 200K number and the tax incentives expire. Just about the time the incentives expire for GM, Nissan and Tesla, most of the other car companies will be introducing their first practical EVs. For a period of several years everyone but GM, Nissan and Tesla, will still be eligible for the incentives. Tesla is a cult company like Apple so I don't think they will be hit as hard by this, but GM and Nissan will be at a huge disadvantage. By the time the incentives go away for everyone their EV marketshare will have collapsed. Ironically the best hope for GM is that the EV market explodes and their competitors use up their credits very quickly. Their only other hope is to get Congress to change the law so that the incentives phase out for everyone at the same time, but their competitors will surely be able to prevent this from happening.

Any thoughts?
 

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The credits should have been worded for front runners (i.e., first 500k cars across all brands or something), hopefully someone will cancel existing credits and maybe do some other system that phases out. Once people see EVs they want to buy, credits won't be necessary. My guess is GM now has some pricing wiggle room in all their EVs.
 

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The credits don't just end when the 200,000th car is sold. They keep going at the full $7500 for 3.1 to 5.9 months after that 200k car is sold with an unlimited number of $7500 credits available for that 3-6 month period. So if GM wants to game the system, they can drop the MSRP and make all kinds of deals and sell 100,000+ more Bolts and Volts in the 3-6 months after the 200,000th electric car is sold.
Then GM gets 6 months of an unlimited amount of $3750 credits and 6 months of $1875 credits on as many electric cars as they can sell.
GM just has to be careful and make sure that the 200,000th electric car is sold in the first month of any calendar quarter to maximize the length of the full credit.

https://www.fueleconomy.gov/feg/taxevb.shtml
 

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Overthinking.
Hahaha!!!! Yeah... A car company being at a $7500 disadvantage to its competitors is NBD. :rolleyes:

It's going to be a serious issue, obviously. The best fix would be for Congress to change the law, but it's hard to predict what our dysfunctunal government might do, especially when one of the 2 major parties fundamentally disbelieves in one of the main reasons for supporting EVs.

That said, I think a bi-partisan legislative solution could be crafted. Switch from a per-company cap on credits to an industry-wide pool of credits available to all companies. It could even be structured to reduce the overall cost of the program by reducing to the total number of credits available (to get budget hawks on board). Described in more detail here: http://gm-volt.com/forum/showthread.php?236393-Time-to-forcefully-start-to-challenge-the-(anti-american-)-200-000-limit&p=3293737#post3293737
 

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Hahaha!!!! Yeah... A car company being at a $7500 disadvantage to its competitors is NBD. :rolleyes:

It's going to be a serious issue, obviously. The best fix would be for Congress to change the law, but it's hard to predict what our disfunctunal government might do, especially when one of the 2 major parties fundamentally disbelieves in one of the main reasons for supporting EVs.

That said, I think a bi-partisan legislative solution could be crafted. Switch from a per-company cap on credits to an industry-wide pool of credits available to all companies. It could even be structured to reduce the overall cost of the program by reducing to the total number of credits available (to get budget hawks on board). Described in more detail here: http://gm-volt.com/forum/showthread.php?236393-Time-to-forcefully-start-to-challenge-the-(anti-american-)-200-000-limit&p=3293737#post3293737
I'm sure GM has given this zero thought and will collapse within a few years. We sure had a good run.
 

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The credits don't just end when the 200,000th car is sold. They keep going at the full $7500 for 3.1 to 5.9 months after that 200k car is sold with an unlimited number of $7500 credits available for that 3-6 month period. So if GM wants to game the system, they can drop the MSRP and make all kinds of deals and sell 100,000+ more Bolts and Volts in the 3-6 months after the 200,000th electric car is sold.
Then GM gets 6 months of an unlimited amount of $3750 credits and 6 months of $1875 credits on as many electric cars as they can sell.
GM just has to be careful and make sure that the 200,000th electric car is sold in the first month of any calendar quarter to maximize the length of the full credit.

https://www.fueleconomy.gov/feg/taxevb.shtml
Given that it's not an instant credit but something that goes on your tax form, this phase out rule sounds like a disaster waiting to happen. People are supposed to know which credit to claim? Plus no matter how you slice it, a year later the incentive goes to zero, which is a tremendous disadvantage. Congress has to fix it, but probably won't. Especially with Trump as president, which I regrettably predict will be the outcome of the election.
 

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I don't know, Volt. GM simply announces at the beginning of the month (in January 2019 or so?) that they have sold the 200k'th in the previous month. So everyone knows you have 5 months to buy a Volt/Bolt and get the full credit.
I remember when a lot of people said, "Only Nixon could have gone to China." And about the only way the GOP is going to come around on electric cars is for Trump to pull them into it. I really don't have a dog in the presidential election, I despise them both. In this case we all have to choose the "lesser of two weevils" as O'Brian put it. I think Trump may actually be better for main street rather than Wall Street. And I think he may be able to bring enough GOP votes to get some sort of an improvement on the electric car tax credit going forward. Maybe.


Given that it's not an instant credit but something that goes on your tax form, this phase out rule sounds like a disaster waiting to happen. People are supposed to know which credit to claim? Plus no matter how you slice it, a year later the incentive goes to zero, which is a tremendous disadvantage. Congress has to fix it, but probably won't. Especially with Trump as president, which I regrettably predict will be the outcome of the election.
 

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Tesla Model 3 should have that same problem before GM does. I guess the Leaf will, around that time as well, most likely. So GM will be on a level field vs. it's main competitors. Newer models from other makers that may come out around that time will have the benefit of the tax incentive, but the disadvantage of being behind in terms of development and market share. They are going to need the tax benefit to compete and develop their programs. I think it will work out pretty well, although it will probably be more expensive to buy a new top-tier EV at that time. Declining battery prices should help somewhat. Just be sure to time your car buying appropriately if it is close to the phase out.
 

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Plus there's always the opportunity to lobby Congress with the "Why should these other manufacturers, who have done little to NOTHING to meet their EV goals, be able to squat on their tax credits? Give us producers a few tens of thousands from each of them each year until they have something to sell. Or if you don't want to take 'em away, just let us keep pumping out $7500 credits until they manage to get their butts to the starting line."
 

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Should look up how Prius pricing was affected once the fed credit for them ran out.
 

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Should look up how Prius pricing was affected once the fed credit for them ran out.
I don't think they have run out, have they? Traditional Priuses haven't had large enough batteries to qualify for the credit, and I didn't think that Toyota sold all that many Plug-In Priuses...
 

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I don't think they have run out, have they? Traditional Priuses haven't had large enough batteries to qualify for the credit, and I didn't think that Toyota sold all that many Plug-In Priuses...
Plain gas-hybrid Priuses were eligible for a fed tax credit at one time.
IIRC, Toyota pushed out some incentives after the credit expired that more or less matched the lost credit amount. Not 100% sure on that though.
 

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Plain gas-hybrid Priuses were eligible for a fed tax credit at one time.
IIRC, Toyota pushed out some incentives after the credit expired that more or less matched the lost credit amount. Not 100% sure on that though.
The original hybrid tax credit that started in 2006 was only $3,150 for the Prius (it varied by vehicle), and Toyota quickly ran through its allotment of 60,000 credits in only about 6 months before it began its phase-out period.

But there are a few key differences between Toyota and the hybrid tax credit vs today's plug-in vehicle tax credit:
  1. By 2006 (when the hybrid tax credit began), the Prius already had a uniquely dominant position in the hybrid market. The Prius had already been selling like hot-cakes... so sales and pricing weren't dependent on the new tax credit. In contrast, the Plug-in EV credit existed before any mass market Plug-in EVs were available.
  2. The hybrid tax credit was structured to expire for ALL auto manufacturers after 5 years (end of 2010), so the period during which Toyota would be at a pricing disadvantage was self-limiting. In contrast, the Plug-in EV credit has no set date of expiration.
  3. The amount of the hybrid credit for the Prius ($3,150) was significantly less than the max Plug-in EV credit ($7500).
 

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I wouldn't be surprised to see a heavy lobbying effort by the auto manufacturers, and maybe even NADA, to extend the credits. The renewable energy lobby was able to get the PV and wind credits extended. That would be ironic - to see NADA and Tesla working together!!
 

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VW 2.0 diesels were once eligible for a $1300 tax credit at one time as well, but it ran out in 2011 (they had offered $650 for a few months at the end of the program). Didn't stop vw from selling a couple hundred thousand more.

My feeling is that the $7500 tax credit will run out on the best cars pretty soon. Maybe a maker like Mitsubishi will still have a lot of them left if they don't replace the i-miev. Everybody will be on a level playing field soon.
 

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I expect some sort of extension based on mutual back scratching in congress, but that sounds political and this is not the politics section of the forum.... these fit into that odd category that tax cutters like because its a tax cut and supporters of added environmental protection legislation like for several reasons, and that any sort of coalition of odd bedfellows such as this leads to surprising, and usually poor, legislation.
 

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Plain gas-hybrid Priuses were eligible for a fed tax credit at one time.
IIRC, Toyota pushed out some incentives after the credit expired that more or less matched the lost credit amount. Not 100% sure on that though.
I don't think the old version was as valuable, as I think that instead of being a 'credit' (taken after tax amount is calculated) the old program was a 'deduction' (taken out before taxes were calculated, and thus less valuable). I claimed it for my Prius purchase in 2005 and Fusion Hybrid in 2009 (I think it was a $2,000 deduction back then, but not totally sure on that figure) and since it was a deduction it didn't turn out to be quite the benefit that today's credits are. And if that's the case, then it may not be possible for a direct comparison of behavior when a manufacturer's numbers run out.
 
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