New Treasury EV Federal Tax Credit Rules May Benefit Foreign Automakers

Seems like it would benefit leasing companies whether or not the EV is domestic. Some leasing companies may pass all or some of the $7500 tax credit along to the buyer. Others may not. Buy the car, get maybe $3750 credit for assembled in US. Lease the EV (domestic or not) and the full $7500 credit is available...to someone. That's what the article seems to say.

So if the leasing company doesn't pass the savings to the Leasor, the US car buyer is still paying full price. Just another reason to not lease a vehicle.

They should cut the BS and just give $7,500 off MSRP.

Evan1 said:

They should cut the BS and just give $7,500 off MSRP.

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This tax credit is effectively a subsidy from the American taxpayer to the car maker. That's why just cutting the MSRP $7,500 doesn't work.

obermd said:

This tax credit is effectively a subsidy from the American taxpayer to the car maker. That's why just cutting the MSRP $7,500 doesn't work.

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The tax credit goes directly to the buyer of the car not the car maker. In 2024 the credit will be allowed to be applied at time of purchase by the car dealer.
I haven't read how they will do that considering that the dealer won't know if you qualify for the credit. Here's my guess how it will work. The dealer will be required to report to the IRS and to you on a form that you received the $7,500 tax credit. You will have to report it on your tax return and if you didn't qualify, the $7,500 will be added to your tax liability.

PSU77 said:

The tax credit goes directly to the buyer of the car not the car maker.

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Which is why I say this is a subsidy. Indirect to the car maker, but still a subsidy. Also, EVs purchased with this subsidy have an automatic $7,500 drop in resale value the minute you drive them off the dealership/manufacturer lot because there's an assumption that you go the full $7.500 even if you didn't have that much tax liability for the year.

If buyers will flock to foreign car manufacturers with the updated tax incentives it should, in turn, make domestic makes like GM become even more competitive perhaps making an even better product.

Evan1 said:

If buyers will flock to foreign car manufacturers with the updated tax incentives it should, in turn, make domestic makes like GM become even more competitive perhaps making an even better product.

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Meanwhile, the US manufacturers will be held to a domestic content requirement that the imports are not? If so, that effectively hobbles the domestic producers and gives the imports an advantage.

Steverino said:

Meanwhile, the US manufacturers will be held to a domestic content requirement that the imports are not? If so, that effectively hobbles the domestic producers and gives the imports an advantage.

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In the old days, every product was so much more simple. If it was American..it was made in the USA. If it was Japanese it was made in Japan so on and so forth. Everything is so much more expensive and the supply chains are all over the place as well as the site of final assembly. And now you have congressional officials now arguing that XYZ must be made in the USA/NAFTA areas. Meanwhile, it is these officials that have pushed for unionized goods which drove corporate to build elsewhere. It is a vicious cycle. .