[alfon]

The United States is going on several years with the Federal Electric Vehicle Tax Credit which tops out at $7,500.00.
I understand that this tax credit will end when a certain number of electric vehicles are sold.

So for those in the know, how close to that figure are we?

 

[Brjohnso]

Each manufacturer gets a quota of 200,000 cars before the credit starts to be phased out. Tesla will run out in 2018. GM sells far fewer EV's so it will be years before they use up their tax credits.

 

[Ziv]

It is still hard to say when the credit will get cut in half. The day Chevy sells/leases the 200,000th electric car starts the countdown to the day that the credit gets reduced. But it is kind of complicated. The credit is reduced at the beginning of the SECOND quarter after the one in which the 200k car was sold. So if GM sells its 200k'th car on June 15th 2018, they would be just 15 days from the end of the quarter so the credit would be reduced as of October 1st, 2018. But if they sell the 200k'th car on July 15th, 2018, they get the full credit until January 1st 2019. PLUS, they can sell an unlimited amount of electric cars between the time they sell the 200k car and the reduction of the credit, 3 to 6 months later. Can you imagine how good the deals are going to be in that 3-6 month timeframe? GM will know that they are going to have to reduce the price of the Volt/Bolt/CT6 by $3750 a couple months later to get the sales to stay strong, so they will probably be dropping the price by $2k to $3k to run up to the reduction strong.

Right now GM has sold around 104,000 Volts, 7,000+ Spark EV's and nearly 3,000 ELR's. So say 114k. October, November and December will see around 9,000 Volts and a several hundred Bolts/Sparks/ELR's sold. Around 124,000 electric cars total. 2017 will see around 55,000 Bolts/Volts sold. So 179,000 going into January 2018. Winter electric car sales are lame, so January, February and March of '18 will probably only add 12,000 to get us to 191k. So GM can continue to sell an increasing amount of Bolts in the second quarter and lose the full credit on October 1st of 2018, or they can have an "inventory shortage" and sell the 200k'th car in early June and keep the full credit through the prime electric car sales months of October, November and December, thereby allowing the full credit to run out in January of 2019.
What do you think will happen?

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

 

[alfon]

Thanks for the feedback. Looks like the tax credit will last sometime in the next decade, unless its extended.

 

[Loboc]

I believe the tax credit will be extended. The Feds won't let GM be the fall guy just because they sell a bunch of eligible vehicles. Elon and Mary will probably champion an extension via their lobby presence if not directly.

 

[Ziv]

In some ways I agree, Loboc, but I am not sure that every car maker should get an extension. I think that GM, Nissan and Tesla deserve to get an extra 6 months or 50,000 units of full credit for their electric car leadership. But the laggards shouldn't get a multi-million dollar windfall for just showing up, like Ford did.

I believe the tax credit will be extended. The Feds won't let GM be the fall guy just because they sell a bunch of eligible vehicles. Elon and Mary will probably champion an extension via their lobby presence if not directly.

 

[Bacardi]

It is still hard to say when the credit will get cut in half. The day Chevy sells/leases the 200,000th electric car starts the countdown to the day that the credit gets reduced. But it is kind of complicated. The credit is reduced at the beginning of the SECOND quarter after the one in which the 200k car was sold. So if GM sells its 200k'th car on June 15th 2018, they would be just 15 days from the end of the quarter so the credit would be reduced as of October 1st, 2018. But if they sell the 200k'th car on July 15th, 2018, they get the full credit until January 1st 2019. PLUS, they can sell an unlimited amount of electric cars between the time they sell the 200k car and the reduction of the credit, 3 to 6 months later. Can you imagine how good the deals are going to be in that 3-6 month timeframe? GM will know that they are going to have to reduce the price of the Volt/Bolt/CT6 by $3750 a couple months later to get the sales to stay strong, so they will probably be dropping the price by $2k to $3k to run up to the reduction strong.

Right now GM has sold around 104,000 Volts, 7,000+ Spark EV's and nearly 3,000 ELR's. So say 114k. October, November and December will see around 9,000 Volts and a several hundred Bolts/Sparks/ELR's sold. Around 124,000 electric cars total. 2017 will see around 55,000 Bolts/Volts sold. So 179,000 going into January 2018. Winter electric car sales are lame, so January, February and March of '18 will probably only add 12,000 to get us to 191k. So GM can continue to sell an increasing amount of Bolts in the second quarter and lose the full credit on October 1st of 2018, or they can have an "inventory shortage" and sell the 200k'th car in early June and keep the full credit through the prime electric car sales months of October, November and December, thereby allowing the full credit to run out in January of 2019.
What do you think will happen?

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

Yup, Tesla said they're willing to withhold U.S. delivers in order to strategically "game the system"...GM may do that as well; the other wild card is if GM release any new PHEV models...The Malibu hybrid evolving into a PHEV seems a natural fit...But really the largest factor will be gas prices...

 

[jsmay311]

Thanks for the feedback. Looks like the tax credit will last sometime in the next decade, unless its extended.

It depends on the manufacturer. GM and Tesla will likely hit 200,000 sales in the USA within the next couple years. And Nissan and Ford probably won't be too far behind.

Based on InsideEVs.com sales scorecard, the latest sales look something like this:

GM: 115k
Nissan: 99k
Tesla: 98k
Ford: 77k
Toyota: 45k
BMW: 31k
Fiat: 17k
Everyone else: <10k

http://insideevs.com/monthly-plug-in-sales-scorecard/

 

[jsmay311]

I believe the tax credit will be extended. The Feds won't let GM be the fall guy just because they sell a bunch of eligible vehicles. Elon and Mary will probably champion an extension via their lobby presence if not directly.

In some ways I agree, Loboc, but I am not sure that every car maker should get an extension. I think that GM, Nissan and Tesla deserve to get an extra 6 months or 50,000 units of full credit for their electric car leadership. But the laggards shouldn't get a multi-million dollar windfall for just showing up, like Ford did.

With the federal gov't as polarized and dysfunctional as it's been over the past 6 years, it's hard to predict what might happen.

But I think the most practical and politically feasible remedy would be to change from a "per manufacturer" cap to a pool system, where it's a first-come, first-serve situation. This would have the following advantages:

• It would eliminated any uneven playing field between manfacturers. (Simply granting Tesla or GM an extra 50k credits wouldn't fix the problem, it would just delay it. And it would probably have to be grated to all other manuacturers to be fair/constitutional.)
• It could be structured to be deficit-neutral (or even reduce the deficit) by keeping the TOTAL number of credit unchanged (or by slightly reducing the total number of credits). I think this would be critical for getting Republican support.

 

[davhamm]

Each manufacturer gets a quota of 200,000 cars before the credit starts to be phased out. Tesla will run out in 2018. GM sells far fewer EV's so it will be years before they use up their tax credits.

It depends on the manufacturer. GM and Tesla will likely hit 200,000 sales in the USA within the next couple years. And Nissan and Ford probably won't be too far behind.

Based on InsideEVs.com sales scorecard, the latest sales look something like this:

GM: 115k
Nissan: 99k
Tesla: 98k
Ford: 77k
Toyota: 45k
BMW: 31k
Fiat: 17k
Everyone else: <10k

http://insideevs.com/monthly-plug-in-sales-scorecard/

Hmm your perception of reality, and reality of EV sales don't seem to be well aligned.

 

[Whatstreet]

If the elections go the way they appear, there is a strong inclination that the incentives will be extended and perhaps even increased in some ways. We can talk more about that late November.

 

[Bacardi]

If the elections go the way they appear, there is a strong inclination that the incentives will be extended and perhaps even increased in some ways. We can talk more about that late November.

No candidate can do it alone, will need the support of Congress...Also don't be shocked if it's not outright renewed and only includes long range BEVs...