Sweet. EVs are the future. I want my next car to be an EV.
this post was submitted on 06 Oct 2023
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It’s worth noting that the CNN article doesn’t say what happens if your taxes for the year are lower than the incentive.
I assume you get the full incentive at the dealership, and then are responsible for the difference come tax day.
So if your taxes are… say $4,000 and you buy a new car with the $7,500 rebate. That’s a difference of $3,500 and your taxes become 4K + 3.5K = $7,500 for that year… or so I’m assuming.
I believe with these sorts of things, you're signing it over to the dealership so it goes against THEIR tax burden, not yours.
Currently, if your taxes are under the rebate, your tax incentive is only as good as your taxes are. So if you owe $3k in taxes, you're only getting a $3K tax incentive, regardless of if it's new ($7.5k) or used ($4k).
I'm seeing the government giving us easier access to that $3K… not granting the full 4k or 7.5k. For simplicity's sake, the full rebate is applied at the dealership, but the difference is still due for that year's taxes.
Cars aren't sold based off what it costs, they're priced off what people will pay.
All these credits do is let manufacturers raise the price by the same amount.
Like, we need to move to EVs, but all this does is funnel more money to the wealthy
I'm more a fan of sticks than carrots when it comes to stuff like this, but voters need coddling and this will still move the needle. Even assuming automakers capture the full $7500, that's pure profit and they're going to try very hard to sell more EVs. And thanks to the IRA, that manufacturing will happen in NA. You're absolutely right that it's a corporate subsidy disguised as a consumer tax break, but it will still have a real effect. I'd rather just have proper emissions requirements drive the change and have a carbon fee and dividend of course, but I think this scheme is still better than nothing.
It doesn't have a real effect tho...
If they decide consumers will buy at X price, they'll sell them for X and the people willing to spend X will buy it
If there's a 7k tax credit, they'll sell it for X+7k, and the same amount of consumers will pay X and buy the same amount of cars...
The only difference is everyone is paying their share of those 7k bonuses to manufacturers.
That tax money would be much better spent on infrastructure or public transport.
This. You have to get into the head of a soulless capitalist instead of a face value end user.
Yep. EV sticker prices won't change. The government was just lobbied successfully into giving your EV rebate directly to car companies.
Assuming your theory is true, you don't think an extra $7500 in pure profit will have any effect on production? If I was a company I'd try to sell more cars that have massive easy profits...
In reality, there's a whole price elasticity of demand formula that automakers will attempt to model, and they'll adjust everything they make to try and maximize profit, both now and in the future.
I agree that the money is much better spent on public transit, trains, bike infrastructure, etc, but that doesn't mean we get to misrepresent the impact of massive tax credits on the market.
You’re not wrong. You can basically blame why college is so bloody expensive because of student loans. You can be certain the professors aren’t getting all that money.