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Considering a New EV in 2023? Best Get it NOW, might cost more later [1]

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Date: 2023-02-07  

The 2023 Federal EV tax credit regulations.

Consider this diary a PSA/Disclaimer combo :)

The old Federal EV tax credit regulations, enacted ~2008 under the W. Bush misadministration and extended with Obama’s Stimulus Act, were simple.

They were also reasonably generous and effective for times when EVs were a rarity and folks like us (driving a Nissan Leaf since 2012) had to keep answering questions like “Is it a hybrid?” “Does it really have no gas engine?”

But for the long term, they were pretty stupid. The two most stupid things about the old credit were:

It applied regardless of the vehicle’s price and of the buyer’s income. This has been a huge early boost to Tesla in particular, but also a misdirection of resources and an annoying talking point for EV-haters on both the right and left side of the map, slandering the entire technology as “Subsidized Toys for the Rich”. Even worse: the credit had an automaker-specific sunset rule. The quarter after an automaker reaches 200,000 cumulative EV sales since 2010 (which in a ~15M cars/year market, is still far short of mainstream success), the credit got halved, and within a year it disappeared completely for this automaker’s EVs.

This second clause has actively punished automakers who had bet on EVs early and big. Indeed, despite trying to game the quarter-based schedule, a couple of quarters of near-mainstream-level Model 3 sales were enough to start Tesla’s sunset in January 2019. GM, with its typical cluelessness, crashed into the sunset only a quarter later.

And so, the only two American automakers serious about EVs during the 2010s were locked out of the Federal credit. To add insult to injury, no foreign automaker ran out of its 200k “quota”, not even Nissan.

Lucky for Tesla, by 2019 the Model 3 was already a screeching success and it was also pretty much the only EV game in the American scene. Not so lucky for GM, but don’t shed tears for them: during Trump years, these turncoats actually sided with his various anti-EV junk policies and time-wasting lawsuits.

Fast forward 4 years: famously, the new credit passed under last summer’s Inflation Reduction Act (IRA) solves this problem. But…. But…. it introduces soooo many others.

So many problems, that even the IRS doesn’t know exactly what to tell EV buyers about their credits. Because of this, until more detailed instructions arrive — expected March or April — the credit is a free-for-most right now. Hence the “Get it NOW” recommendation in my title. If you wish to stop reading the diary here, be sure to check this excellent up-to-date NPR article about the credit.

Otherwise, follow me below the fold for more.

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[1] Url: https://www.dailykos.com/stories/2023/2/7/2151513/-Considering-a-New-EV-in-2023-Best-Get-it-NOW-might-cost-more-later

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