Consumers Agree With Automakers About The Federal EV Tax Credit

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MAR 30 2018 BY EVANNEX 39


Late last year, the federal tax credit for plug-in vehicle purchases narrowly survived an assassination attempt in Congress. More recently, GM’s Mary Barra said that the credit should not only be continued, but extended. Tesla’s Elon Musk has also called for the credit program to be restructured. Of course, Barra and Musk have a different perspective than most auto industry CEOs, because they head the only two automakers that are selling substantial numbers of electric vehicles (EVs) in the US.

Read Also: Tesla To Sell 200,000th EV In U.S. In 2018, Tax Credit Phase Out Follows

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Charles Morris. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: Tesla’s Model 3 (Instagram: forococheselectricos)

The tax credit is designed to “sunset” once certain sales milestones are reached. When a particular automaker sells over 200,000 plug-in vehicles, the amount of the credit is phased out in stages over the following 15 months, then eliminated. GM has sold more than 160,000 plug-in vehicles to date, and is expected to pass the 200k milestone later this year. Tesla has sold at least 165,000 units in the US so far (according to InsideEVs). Depending on how quickly it ramps up production, it could also blow by the 200k mark this year, and it’s certain to do so long before it clears the backlog of Model 3 orders.

This is an ironic (and arguably unfair) situation for two reasons. First, as EV pundits have noted, it means that most of the subsidies for Tesla owners have gone to buyers of the higher-priced Models S and X, and the dwindling number of credits still on the books are going to buyers of loaded Model 3s. The mid-market consumers who’ve waited so long to be able to buy a $35,000 Tesla, and who could really use that tax break, are probably going to miss the party.

Above: Getting behind the wheel of a Tesla (Instagram: kerrentonsnow)

Furthermore, the existing system will, in a way, punish the automakers that took a chance and moved first to produce EVs. Once GM and Tesla lose the tax credit, they will be at a disadvantage to other brands (Ford, Mercedes, VW, BMW, Hyundai et al) that have piddled around with compliance cars for years. Assuming that these companies do bring their own new EVs to market in volume as planned, they’ll have plenty of tax credits available to sweeten the deal for shoppers.

What do actual car buyers think about all this? A new survey of 1,154 vehicle buyers by Autolist (as reported by InsideEVs) found strong support for the federal tax credit. Autolist found that 74% of consumers say the tax credit would affect their decision to buy an EV, and 63% said the credit is an important measure to support EV adoption. A third of respondents think the 200,000-vehicle cap should be lifted.

Above: Consumers want the electric vehicle tax credit (Image: InsideEVs via Autolist)

An earlier Autolist study found that the high price of EVs was the second-biggest objection (after limited range) to going electric. Other studies have found that government incentives do indeed have a major effect on EV sales.

Is there any chance that US lawmakers will expand the existing credit? Considering the current administration’s hostility to all things green, many were sure it would get the axe in the recent round of budget negotiations. The fact that the credit survived this time (and so did a credit for charging infrastructure) demonstrates that there is support for it on both sides of the aisle in Washington. There’s also substantial support for EVs at the state and local levels, and this new survey indicates that the federal tax credit is popular with consumers (of course, most tax breaks are). So, while an expansion of the federal tax credit seems unlikely, it might not be out of the question.


Written by: Charles Morris; Source: InsideEVs via Autolist

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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39 Comments on "Consumers Agree With Automakers About The Federal EV Tax Credit"

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Hypothetical situation:

Auto manufacturer Z produces EV model A (which is eligible for the $7,500.- US Federal tax credit).

Z produces, sells and delivers 200,000 EV’s of model A in the US in a period of 4 years (2014-2017).

Only 150,000 buyers of a model A applied for the $7,500 US Federal tax rebate. And the other 50,000 buyers did not apply for the $7,500 US Federal tax rebate.

My question is: “Has Z reached the 200,000 Plug-In vehicle cap, or not?”

It is linked to us domestic sales, not how many used the credit. Unfortunately.

Kind of wrong system, I think.

Probably not well thought through.

The function of the incentive is to get auto manufacturers to produce and sell Plug-Ins.

How many Plug-Ins would the US government want to see on it’s roads? And in what timeframe?

How about a million Plug-Ins before 2020?

Then there would have to be just 1 Milestone Cap (1 million Plug-Ins). And this would have to apply to all auto manufacturers. Without looking at which auto manufacturer sold how many Plug-Ins.

Simple and effective.

By the way, the target of 1 million Plug-Ins is too low actually. It should be 10 million Plug-Ins!!!

And after the sale of each million Plug-Ins the tax rebate should be decreased as follows:

First million – $10,000
Second million – $9,000
Third million – $8,000
Fourth million – $7,000
Fifth million – $6,000
Sixth million – $5,000
Seventh million – $4,000
Eighth million – $3,000
Ninth million – $2,000
Tenth million – $1,000

That would be a great incentive program.

Good luck getting Congress to approve 55 billion dollars in tax breaks for something sensible like electric cars. That kind of money is reserved for stupid things like fighting wars in worthless countries no should care about.

It would be impossible to base the tax credit based upon how many people actually received the tax credit.

First off, January buyers have 22 months before they have to file their taxes when you count the standard extension. Then you have another 36 months from when you file to amend your taxes and request a tax credit you didn’t file for in your original taxes.

The IRS would have to wait up to 58 months before they actually knew exactly how many people claimed the incentive. For a program that is based upon quarterly numbers, it simply isn’t possible

Then the incentive program should better not be tax related.

The amount should be made available at the time of the sale. Or the dealer should contact the concerning Government Agency to apply for the amount of the incentive after the car has been delivered to the customer.

Consumers would like other people to subsidize their purchase? I’m shocked.

In complete fairness, if EV tax credit goes, then so should gas subsidy. True cost of gas without subsidy is around $9/gal.

The main petrol “subsidies” in the US from the US Gov’t could go anytime; OK by me. That would amount to about $5B or a few cents/liter.

This will not happen anytime soon, especially with the current oil loving administration in place. But the hefty GAS subsidies should be allowed to gradually sunset, and this new found tax money should be used to not only continue to support the future sales of all alternative based fuel vehicles, but it should be expanded to reward those companies that got in early. The more gas alternative vehicles sold by a particular manufacturer, the higher the benefit to buyers of their cars! The sunset rule in place is the dumbest thing I ever heard of, and it should be at least done away with as a minimum!

Most of those often vaunted oil subsidies don’t exist. The few that do involve write offs for exploration, so by that logic, virtually all industries are subsidized. You’re $9.00/gal figure is quite literally made up. People count on others accepting figures like that which are entirely fictional. Please list the government subsidies your referring to in total, and let’s divide them by all the gallons of gasoline and diesel fuel sold in America and see what the real number is. I drive a Chevy bolt, and have owned two Spark EVs. I support the electrification of transportation. I just don’t think it’s helpful to promote junk data, whether it’s “oil subsidies” or “global warming” hysteria. Just go back and look at the dire predictions for 2015 if we did not cut CO2 levels by half. CO2 levels grew dramatically instead, and there was no apocalypse. In fact, they had to toss “global warming” in favor of climate change, because the real data was so stubborn. Tesla succeeded in moving the needle on electrics by leveraging their strengths. Virtually everyone who actually drives a Tesla wants one. The Bolt, in my opinion, is simply a better car than the other options… Read more »

You posting something positive about evs…now that would be shocking!
It’s my money that I’m keeping more of….get that in your stupid skull.

Can Anyone in the USA Tell me the Difference between – ‘A Taxpayer’ and ‘A Citizen’?

You can be a taxpayer without being a citizen and you can be a citizen without being a taxpayer. It’s like oranges and apples, from great distance they can be perceived as the same thing.

I’m on my third EV (second factory version; my first was a DIY conversion of a ’63 Corvair). Gave up the lease-swapped Leaf two years ago for a 1/gen Volt.

I have benefitted from the EV subsidy (indirectly): cheap Leaf lease and vast depreciation of the Volt) and FIT for EVSE in my garage and the rewiring of my distribution box to enable it, so I can’t claim I haven’t been a recipient.

The government paid for 30 years to get fracking costs developed and costs down where it was viable to do. Government subsides oil, farming, ranching, nuclear power plants and many other industries. The current administration is working overtime on picking winners and losers.


No. No more of my tax dollars for this. End it.

And what about the massive subsidies for fossil fuels Scott Franco?

If you don’t want your money to “subsidize” evs then go and buy one and keep your money.

You haven’t paid or lost a single cent.

Apparently, you do not understand how a tax credit works. Or are you somehow for higher taxes?! And you can’t say you are for other people, because that’s what everyone might say!

Well, if they don’t extend it, then they need to end it for everyone. I find it infuriating that Honda, Chrysler, and all the other manufacturers that dragged their feet will soon be getting a competitive advantage in the market that their competitors essentially created for them.

When US automakers GM and Tesla are getting screwed in the manner you point out beginning later this year, American public opinion will agree with you and the GOP will have the political cover they need to end it.

I hope not! This is not Tesla or GM credit…is ev credit!

Horses were better at autonomous mobility

We want people to buy EVs. And I don’t care from which automakers. If FCA, Ford, Honda, Hyundai, Toyota, BMW, VW, etc can’t sell many EVs here, because the credit ended for them before they got a chance to make use of it, that sort of fails to help EV adoption.

End the EV subsides. Also, end the oil subsidies. Add a gasoline/diesel tax. The principal is: tax what you want to get rid of. Taxing polluting ICEs should be a no-brainer.

I agree. This would create an instant rush to EVs when the true costs are revealed to the consumer.

I’d like to see the EVSE credit get reinstated, retroactively for 2018, for a few additional years as well. It should stay at least until the last of the electric vehicle credits is gone.

Or – Bump up the Federal EV Tax Credit to an Even $10,000?


Sigh, why do they put options like I don’t want my tax money on this when its a non-refundable tax credit? It doesn’t use their money!

As for restructuring, I think it should be based on kwh to cost ratio while splitting up plugin hybrids and EVs.

So like this: Full EVs get $7500 (Must be minimum of 40 kwh), plugin hybrids get $3500 (Must be minimum of 16 kwh). Of course if a plugin gets over 40kwh, it should get the same $7500.

Then a ratio of how much you get per kwh.

So for BEVs it would be:
$700 per kwh = 100%
$800 per kwh = 90%
$900 per kwh = 80%
$1000 per kwh = 70%
$1100 per kwh = 60%
$1200 per kwh = 50%
$1300 per kwh = 40%
$1400 per kwh = 30%
$1500 per kwh = 20%
$1600+ per kwh = 10%

And for plugins you can I guess double that amount?

Oh forgot to add, it should be unlimited till maybe end of 2020. Then add a sunset clause where it shrinks by 20% every quarter.

This administration is currently working on rolling back CAFE and killing CARB’s ability to create their own emissions standards.

Anybody who thinks any reasonable or rational improvement will happen under their watch is completely delusional.

Nix as ususal nails it.

The Trumpsters only want to kill it so the best we can hope for is that it stays the same until the Trumpsters and their enablers are removed from having that power.

Maybe then re-do it.

Horses were better at autonomous mobility

Hard for them to kill it, since it “promotes jobs” and gives tax cuts to people wealthy Enough to buy new cars. But I can’t see them drastically restructuring it or expanding it.

But I keep writing my representatives to let them know I support it, and that we should raise the gas tax to level that accounts for the costs of the externalities of burning ff.

“gives tax cuts to people wealthy Enough to buy new cars.”
You can be dirt poor and still take advantage of the credit by leasing ev and get a 0 down deal. No excuses.

I was rather amazed our current congress continued the incentives at all, so we should be optimistic that the coming blue wave will better reflect the will of the majority for a change and support these incentives even more! Days are numbered for “spanky” and his band of greedy deplorables so I still have hope for a greener future! Simply transfer subsidies from the oil industry to renewables. No brainer.

Not So Easy when Most of the Oil Industry Players Earn Enough to Sway Elections far easier than a Tesla Or Nissan EV Play will!

Second – Average Joe Dirt Citizen (Consumer) has no clue if EV’s are good, but they love their ICE Vehicle!

Look at the Dealer Associations in Places like Texas, fighting against Tesla Selling Directly (At their stores) – as if that stops a person in Texas that actually wants a Tesla!

Even Myself – Holding out for the Dual Motor Long Range Model 3 from Tesla (And Trying to Figure out if I should really go ‘All In’, on such a Car), and Hoping by that time – they announce its towing capacity!