I see an initial surge of used EV pricing going up while new EV prices slowly loft downwards. Dealers will be hesitant to supplement the 7500 credit as a loss just to sell the vehicles. Eventually manufacturers will have to incentivize inventory, just see what Stellantis is doing to American brands in the States right now.
Probably why we see so many brands pulling back on EV production right now in anticipation of having to incentivize their own products that are dumped on dealers.
The EV tax credit was intended to help manufacturers deal with the high upfront costs associated with new research and development. These product cycles are notoriously long and expensive and most of them don’t see a return on their investment until well into the cycles. Sometimes, they don’t even sell enough to cover the R&D costs. That’s the price of doing business in a capitalist society. Sometimes you win, sometimes you lose.
With no EV tax credit, only companies that have already cleared their R&D investments will be profitable and flexible enough to compete in the new EV market. Probably why Elon Musk was so excited to cut the tax credit. he got his so he doesn’t need it anymore and knows it’ll hurt his competition.
The European car companies will keep developing EVs due to national and EU wide environmental regulations. They just don’t have a choice. It’s too big of a risk to not do so even given the likelihood of the EU2035 zero emission plan being watered down. Meanwhile Toyota and Honda will continue on their current very gradual plan and be the big winners.
But for Ford and GM the question is whether you can justify continuing losing money to 1. Stay competitive in Europe and Asia long-term and 2. Protect themselves against future CAFE standard increases in USA. It’s really a terrible position for them. Both options are bad. And compounded by their abandonment/lack of serious investment in most categories except body on frame vehicles.
Hybrid-heavy product portfolios are definitely the winners here. From a pricing standpoint, however; I think the public DO want EV’s, they just don’t want to pay six figures for EVs.
There’s definitely an inflection point of price versus availability where the market can sustain buying EVs and its way below where traditional manufacturers wanted to be in order to make the investments necessary to get there in the place. A chicken and the egg type of situation. I would gladly buy an EV, if it were worth buying and affordable.
For those of you still in the U.S. market, yes! But still being in Germany for another two years, I am unable to lease an EV and then get permission to ship it here.
Yup. Take the $7500 tax credit(30d and 45w) away, companies like Rivian, Lucid, Polestar will be in trouble. Lucid has their Saudi sugar daddy at least. Rivian has VW now, but even VW is in financial trouble. Honestly don’t think Rivian can afford to loose the credits. Legacy companies like GM and Ford will have to put off profitability goals years, the markets will not react kindly.
In light of speculation about Trump killing the federal EV tax credit…
My questions:
What is the earliest this could possibly take place?
Could this expected repeal somehow apply to EVs purchased/leased in 2025, but prior to the rescinding of this part of the Inflation Reduction Act?
I’m not trying to invite a political debate, but only to better understand the timing and implications of the elimination of the federal EV tax credit.
Taking the EV credit away its gonna be harder attracting new EV owners. Alot of people shop by payment not what they want. Perfect example someone that has no clue about incentives or leasehackr. Would choose a eqs sedan over e class why eqs is more msrp but cheaper than e class payment due to ev credit Once they experience EV theres a better chance they wont want ICE anymore
Not following. The credit (if applicable) is provided to the lessor (bank or captive) who typically passes it to the lessee (you and me). But I don’t see how a change in law could impact an existing lease. In other words, the discounted lease payment can’t be changed.
They provide a (potentially equivalent amount) incentive.
That may effectively be the same financially of them passing the credit on, but in the context of what the implications would be on a retroactive tax change, it would completely shield you from any changes.
Almost all the popular models being discussed lately all have more than $7,500 lease cash, or they have payments “reduced” by inflated RVs without using any lease cash.
IDK why the myth or misconception of the “$7,500” line item keeps persisting.
I’ve bought probably 15 EV’s, over the past 4 years, and I’ve only been able to get a tax credit, or the equivalent thereof, on 3 or 4, and most of those were leases in the last 12 months. There is some percentage of EV buyers who are only doing it because it’s cheaper than ICE, but I wouldn’t underestimate those, like me, who simple feel the EV is a better approach to transportation.
I think Rivian R1 is a good example. Aside from the very small minority LH crowd, the typical Rivian owners I know are not buying a R1S or R1T because it’s cheap. Most don’t even care how much it costs. If Rivian can right size production, I don’t see this being a catastrophic event for the R1 line.
While overall EV demand will fall, it won’t go to zero, and weaning out the “buys-for-value” crowd is fine with me. Let the manufactures compete based on the quality of the product. Long term, maybe this will even help to slow depreciation. I think Tesla feels the same, they had success without the tax credit before.
TLDR// ICE and EV the same price, still buying EV.
