[Mothertrucker]

Good news! If you ordered but don't have a signed contract for the Ford F150 Lightning but are still waiting for the truck to be delivered to your dealer you are in luck as you are still eligible for the $7,500 tax credit. The only change to the existing electric vehicle credit that takes effect after August 16, 2022, and before the end of 2022 is the introduction of the North American final assembly requirement. Otherwise, the rules in effect before the enactment of the Inflation Reduction Act for the electric vehicle credit remain in effect, including the phase-out for manufacturers that have sold over 200,000 vehicles in the United States. https://home.treasury.gov/system/files/136/EV-Tax-Credit-FAQs.pdf How does the Inflation Reduction Act modify the existing tax credit for new electric vehicles? Overall, the reforms in the Inflation Reduction Act mean that the tax credit for electric vehicles will evolve considerably over the coming months and years. However, the only change to the electric vehicle credit that takes effect immediately after the President signs the Inflation Reduction Act into law is the North America final assembly requirement.

 

[Leaf to Lightning : )]

what's really strange about any of this being 'included' in the IRA Bill is that it seems to do the opposite - it may actually serve as a DISINCENTIVE for most EV buyers who would otherwise have been lured by the extra Tax Credit/Refund.
There are so many vehicles that won't be eligible due to their MSRP, and those shipped into the states, and those folks with 'higher incomes'. We can debate whether 'higher income' families should not need the credit, but regardless of that, $7,500 is $7,500 no matter who you are - we need to INCENTIVIZE everyone to buy, not just the 'lower income', if that distinction can even so easily be made.

The adoption of EVs will NOT come from the 'poor' or 'low income'.

 

[Berm]

Around 90% of new car buyers today qualify under the income caps. If there have to be caps these don’t seem like it’s too big of an issue.

 

[Mothertrucker]

what's really strange about any of this being 'included' in the IRA Bill is that it seems to do the opposite - it may actually serve as a DISINCENTIVE for most EV buyers who would otherwise have been lured by the extra Tax Credit/Refund.
There are so many vehicles that won't be eligible due to their MSRP, and those shipped into the states, and those folks with 'higher incomes'. We can debate whether 'higher income' families should not need the credit, but regardless of that, $7,500 is $7,500 no matter who you are - we need to INCENTIVIZE everyone to buy, not just the 'lower income', if that distinction can even so easily be made.

The adoption of EVs will NOT come from the 'poor' or 'low income'.

what's really strange about any of this being 'included' in the IRA Bill is that it seems to do the opposite - it may actually serve as a DISINCENTIVE for most EV buyers who would otherwise have been lured by the extra Tax Credit/Refund.
There are so many vehicles that won't be eligible due to their MSRP, and those shipped into the states, and those folks with 'higher incomes'. We can debate whether 'higher income' families should not need the credit, but regardless of that, $7,500 is $7,500 no matter who you are - we need to INCENTIVIZE everyone to buy, not just the 'lower income', if that distinction can even so easily be made.

The adoption of EVs will NOT come from the 'poor' or 'low income'.

 

[Mothertrucker]

Well then you should be incentivized to buy this year.

 

[Leaf to Lightning : )]

I already have.

 

[ChasingCoral]

Punchline for retail buyers:

His third point was about retail sales:

Ford EVs and our PHEVs remain eligible for the $7,500 tax credit until guidance is issued at the end of this year. Next year, we believe we’ll meet the $3,750 critical minerals credit requirement on certain Mustang Mach-E and F-150 Lightning models. In ’24, the rules will further restrict this critical materials credit. So, we believe it’s a fairly level playing field right now for all the OEMs as our supply chain of critical minerals extracted or processed in the US and FTA develops.

What’s intriguing is Farley’s reference to “certain models.” There are four F-150 Lightning models. The Pro starts at $51,974, and the Lariat starts at $74,474. (The Platinum costs more than the $80k cap.) There are likely pragmatic reasons for some models meeting the critical minerals credit requirement and others not meeting it, such as battery size. And, my colleague Jameson Dow asked partly tongue in cheek, “Will one model get its cobalt from the US and another from the DRC?”

Does Ford think its EVs qualify for the full $7,500 IRA tax credit? Here's what its CEO said

Here's what CEO Jim Farley said about whether Ford's EVs are going to qualify for the IRA's full $7,500 tax credit.

electrek.co

Does Ford think its EVs qualify for the full $7,500 IRA tax credit? Here’s what its CEO said
Michelle Lewis
- Oct. 28th 2022 3:10 pm PT

@michelle0728

Here’s what Ford CEO Jim Farley said during the company’s Q3 2022 earnings call about whether the company’s electric vehicles would qualify for the Inflation Reduction Act’s (IRA) full $7,500 tax credit.

Here’s how the IRA tax credit, which will run to 2032, will work for new EVs:

• EVs that are purchased August 16, 2022 or later must have final assembly in North America to be eligible.
• The credit is worth up to $7,500, and it consists of two requirements, each adding up to half of the credit.
• To be eligible for the $3,750 battery portion of the credit in 2023, 50% of the vehicle’s battery must be assembled or manufactured within North America. The required percentage goes up by 10% every year until it reaches 100% in 2029.
• The other $3,750 of the credit consists of the critical minerals requirement. A certain percentage of the battery’s critical minerals must be extracted or processed domestically or within a country with whom the US has a free-trade agreement. In 2023, that’s 40%, and then it peaks at 80% in 2027, where it stays until 2032.
• Beginning in 2023, vans, SUVs, and pickup trucks must have an MSRP of $80,000 and under to qualify.
• Sedans and passenger cars are capped at $55,000 in 2023.

Ford CEO Jim Farley noted in his opening statement that the company has already broken ground on its new BlueOval SK battery plants in Kentucky. Domestic battery assembly/manufacturing = check.

He also said that the company’s “team is making great progress in securing raw materials, importantly the processing of those raw materials and the battery capacity that we need.” (Farley didn’t elaborate further on that in the call, so TBD for critical minerals.)

In regard to the IRA proving beneficial to Ford itself on the battery production front, Farley said:

From ’23 to ’26, we estimate a combined available tax credit for Ford and our battery
partners could total more than $7 billion with large step-up in annual credits in ’27 as our [joint venture] battery plants ramp up to full production.

He then made a second point about commercial EV tax credits for customers:

I haven’t actually read anyone in the media covering this, but it’s super important for Ford. And that’s the commercial EV credit. You know that Ford is the number one commercial vehicle brand in the US, and our commercial customers can now claim next year $7,500 per EV vehicle they buy with no restrictions on battery sourcing or manufacturing. Our preliminary estimate is that between 55% and 65% of all of our commercial vehicle customers will qualify.

Farley has a point about it being interesting from a business journalism standpoint. Tesla doesn’t make light and medium duty commercial EVs. Rivian makes them, but it will be busy supplying Amazon for a long time. So Ford is extremely well positioned to sell a lot of commercial EVs.

His third point was about retail sales:

Ford EVs and our PHEVs remain eligible for the $7,500 tax credit until guidance is issued at the end of this year. Next year, we believe we’ll meet the $3,750 critical minerals credit requirement on certain Mustang Mach-E and F-150 Lightning models. In ’24, the rules will further restrict this critical materials credit. So, we believe it’s a fairly level playing field right now for all the OEMs as our supply chain of critical minerals extracted or processed in the US and FTA develops.

What’s intriguing is Farley’s reference to “certain models.” There are four F-150 Lightning models. The Pro starts at $51,974, and the Lariat starts at $74,474. (The Platinum costs more than the $80k cap.) There are likely pragmatic reasons for some models meeting the critical minerals credit requirement and others not meeting it, such as battery size. And, my colleague Jameson Dow asked partly tongue in cheek, “Will one model get its cobalt from the US and another from the DRC?”

The optics will matter to car buyers. Will Ford look as though it’s prioritizing the lower end, making the F-150 more affordable to the general public, or will the company look as though it’s trying to move more expensive models off the lot by dangling the tax credit carrot to high net worth individuals?

We’ve reached out to Ford about this and will update if we hear back.

We’ll also be sure to keep an eye on which Ford EVs qualify for which level of IRA tax credit.

 

[ChasingCoral]

The most comprehensive analysis I've found of who's in and who's out is by Electrek:

Here's every electric vehicle that qualifies for the current and upcoming US federal tax credit

As sales of electric vehicles continue to surge, many new and prospective customers have questions about qualifying for federal tax...

electrek.co

 

[THEsocalledfan]

I'm fascinated how they seem to downplay the $80K cap issue. It's like they don't give a shit how much that price hike is killing those of us with an ER Lariat on order.

 

[cc33]

Just found this gem in the disclosures section from Ford. Note the last part highlighted "and total of options". Lariat ER still falls under the 80k cap due to the ER upcharge is included in the options price. MSRP is $74k. So only the Platinum is over the limit

 

[ChasingCoral]

It will be interesting to see the IRS ruling on what is included in MSRP. This suggests options are not included. However, to get an ER requires a higher package which may be considered a higher MSRP rather than options.

 

[cc33]

I meant to add this into my initial comment as well...the first pic came from my build sheet and the below came from my account online at Ford. Currently scheduled for production on 12-5-22. Should find out soon enough.

 

[ChasingCoral]

I meant to add this into my initial comment as well...the first pic came from my build sheet and the below came from my account online at Ford. Currently scheduled for production on 12-5-22. Should find out soon enough.

View attachment 4950

That does clearly separate the Base MSRP out from the options and delivery. The real question is going to be how the IRS interprets the new law. The $80K cap has not yet been interpreted in IRC 30D:

Credits for New Electric Vehicles Purchased in 2022 or Before | Internal Revenue Service

If you bought or leased a new, qualified plug-in electric vehicle (EV) in 2022 or before, you may be eligible for a clean vehicle tax credit up to $7,500 under IRC 30D.

www.irs.gov

 

[ChasingCoral]

TL;DR: EVs built in North America will continue to get the full tax credit until at least March as the IRS doesn't have the battery sourcing rules in place yet.

https://www.yahoo.com/now/u-release-ev-tax-credit-210621276.html?soc_src=social-sh&soc_trk=tw&tsrc=twtr

U.S. Treasury will delay EV battery sourcing guidance until March
David Shepardson
Mon, December 19, 2022 at 4:06 PM EST·2 min read

U.S. Treasury will delay EV battery sourcing guidance until March

FILE PHOTO: An electric vehicle is seen charging in Manhattan, New York
By David Shepardson

WASHINGTON (Reuters) -With a revamped $7,500 electric vehicle tax credit taking effect Jan. 1, the U.S. Treasury Department said on Monday it will delay until March its release of proposed guidance on the required sourcing of electric vehicle batteries.

The announcement means some electric vehicles that will not meet the new requirements may have a brief window of eligibility in 2023 before the battery rules take effect.

The $430 billion Inflation Reduction Act (IRA) imposes complex restrictions on tax credits based on sourcing of battery components and critical minerals. Signed by President Joe Biden in August, the law limits EV tax credits to vehicles assembled in North America and was partly aimed at weaning the United States off batteries from China, which now make up 70% of global supply.

But it only gave the Treasury Department until year end to iron out thorny questions about battery sourcing rules.

Some requirements for tax credits take immediate effect on Jan. 1 including new caps on income of buyers and retail prices for qualifying vehicles. But Treasury's announcement Monday means some buyers could receive tax credits for purchases of electric vehicles that ultimately will not comply with battery sourcing rules when finally unveiled.

The Treasury guidance being delayed until sometime in March details requirements that make $3,750 contingent on at least 40% of the value of the critical minerals in the battery having been extracted or processed in the United States or a country with a U.S. free-trade agreement, or recycled in North America.

The other $3,750 requires that at least 50% of battery components were manufactured or assembled in North America. Both percentages rise annually.

Many countries are pressing Washington for a broad definition of a free-trade deal and other foreign automakers and countries want other interpretations

Treasury said that by Dec. 31 it will "release information on the anticipated direction" of the rules. It said "the critical mineral and battery component requirements take effect only after Treasury issues that proposed rule."

General Motors Co and Tesla Inc vehicles again become eligible for EV tax credits on Jan. 1 after Congress in August lifted the per-manufacturer cap on EV tax incentives.

It remained unclear whether Treasury will address other questions by Dec. 31 including if it will allow automakers to take advantage of commercial clean vehicle credits by leasing vehicles to consumers.

(Reporting by David Shepardson; Editing by Jonathan Oatis and David Gregorio)

 

[cc33]

Is the 80k cap still in place Jan 1?

 

[cc33]

Nvm. I see that was still valid. It wldnt let me delete my question.

 

[ChasingCoral]

Nvm. I see that was still valid. It wldnt let me delete my question.

It’s worth leaving it up. Others will ask too.

 

[Voltz]

That's big news, In addition to ≤ $80k Lightnings, for Chevy Bolt and some Tesla/Rivian buyers whose vehicles come in under the $55k/$80k cap and arrive between 1/1/23 and whenever the battery guidance goes into effect.