[Chevy Bolt News]

What would happen to the electric vehicle segment if the government decides to axe the $7,500 EV Tax Credit? That’s the question on our minds and something Car And Driver tries to answer.

If potential customers were to lose the tax credit of up to $7,000, they may not be as quick to purchase an electric vehicle like the Bolt when there are plenty of fuel efficient gas models out there. A $37,495 manufacturer's suggested retail price can be a deterrent compared to the $29,995 price tag after calculating in the federal tax credit.

There’s already a real world example out there. Georgia was seeing Leaf sales 15 times more than the national average until legislators voted to eliminate the $5000 state tax credit. After that, EV sales dropped to just a fraction of what they used to be. This is bad news for automakers too as they rely on scale and volume to turn a profit in the segment.

If there’s no profit to be made, automakers will reduce the amount of EV models they’ll release by 2021. That’s the earliest year allowed by product-development cycles to dump programs with a reasonable loss. A financial hit is inevitable without the tax credit as the automotive industry has already invested billions into electrified powertrains and battery technology.

We’ll just have to wait and see what happens when Treasury Secretary Steven Mnuchin tried to push Congress to work through comprehensive tax reform by July 29.

 

[Sean Nelson]

It may hurt sales in America, but the rest of the world isn't waiting for Trump to leave office - they're busy piling on the carrots and sticks to spur EV sales. The loss of the credit may hurt cars like the Bolt that are primarily sold in the US, but sales for cars like the Leaf, the Zoe, etc. will keep right on going. And that will help to spur the technological improvements that will help to eventually wean the EV sector off those incentives.

 

[DaV8or]

If they kill the $7500 credit, sales of the "cheap seats" will crumble and fall. That would include the Bolt, the Leaf, the i3 and all the compliance cars. The current Teslas and the upcoming offerings from companies like Lucid will continue on in the volumes we have seen because the kind of buyer they attract really don't need the credit. The upcoming Tesla Model 3 falls in-between.

The Model 3 attracts both ordinary folks and many of them may fall away, but it also attracts Tesla fanatics as well as repeat customers. I predict that should the credits fall, Model 3 sales will fall off a bit, but overall remain healthy... for a few years anyhow.

 

[Bazinga]

Tesla will take a financial hit too since the Model 3 deposit is fully refundable. Without the credit, a lot of people will demand their deposit back. This will slow the growth of affordable EV and affect those who want an affordable long range Ev the most.

How long do we have until they decide to ace or keep the tax credit?

 

[DaV8or]

How long do we have until they decide to ace or keep the tax credit?

The rate that things are now going, I think very soon the credit will be gone. I think tax overhaul is slated for June maybe? The repeal and replace of Obamacare will be the litmus test to see what congress actually can, or can't do. If they flounder and flail on Trumpcare, then I imagine that tax reform will be put off and be even tougher.

It's really hard to say with the EV credit what's going to happen. I think there is a ver, very good chance that it will not survive the year and that nobody will get it for 2017, but then again, maybe they can be convinced to just let it expire as it is planned, or maybe they will allow those that bought their cars prior to tax overhaul to keep it. It's really anybody's guess at this point.

One thing is certain- Do not buy a Bolt expecting to get $7500 off your taxes next year. You can hope for it as I do, but do not plan on it. In fact, I think the manufactures should all back off the tax credit angle in their advertising right now. They could end up with some very angry customers next year and no doubt lawsuits.

 

[Raymondjram]

They could end up with some very angry customers next year and no doubt lawsuits.

The customers cannot sue the dealers, because that money is promised NOW by the Federal tax system. If the new administration cuts the rebates, the dealers are not to blame because each sale was completed before the cut was made and the customer knew this. Those expected dealership lawsuits will be frivolous and shelved. Let them sue Trump (they might win)

BTW, I live in a territory that pays no Federal taxes, so I cannot get any tax rebate. And this Federal tax rebate applies if you have to pay over $7,500 in taxes. Many citizens don't even reach that number. I prefer not paying the tax anyway!

Edit: if the new administration wants to save on Federal payouts, then cut the gasoline subsidies to the refineries and wholesellers. Gasoline prices will climb, but the Federal system gets more money back. Then EV sales will rise due to this effect and not a single extra penny is spent!

 

[DaV8or]

The customers cannot sue the dealers, because that money is promised NOW by the Federal tax system. If the new administration cuts the rebates, the dealers are not to blame because each sale was completed before the cut was made and the customer knew this. Those expected dealership lawsuits will be frivolous and shelved. Let them sue Trump (they might win)

Yes, but if is not fully explained that the credit is not guaranteed, there will be suits. Some lawyer somewhere will try it and he will go after the deepest pockets.

 

[phil0909]

I think there is a ver, very good chance that it will not survive the year and that nobody will get it for 2017...

Eh, could happen, but generally things like this are not retroactive. I expect it will be fine for 2017, and maybe permanently - this credit is pretty small potatoes and Congress may find it not worth acting on.

But, just in case, I did buy my Bolt on December 31 last year.

 

[dave]

Since the leasing companies own a good chunk of the credits, I doubt they will cut the rebate retroactively. Not impossible to get rid of them, but there will be at least some lobbying against getting rid of them for the 2016 tax returns.

 

[eops]

Not expecting the credit goes for a long of situations where you're waiting for money to come in when its not already sign sealed and delivered

 

[SparkE]

What if, what if. Blah, blah, blah.

I'd rather spend time speculating about what would happen if Scarlett Johansson knocked at my front door.

 

[devbolt]

What if, what if. Blah, blah, blah.

I'd rather spend time speculating about what would happen if Scarlett Johansson knocked at my front door.

A plea with your wife to invoke the celebrity hook up rule?

 

[Bazinga]

We still have until June for the final word and Chevy could be approaching their 200,000 plug-in vehicles limit for the credit for all we know.

For now I'll join the SparkE camp and think about other things, just not Scarlett Johansson.

 

[devbolt]

We still have until June for the final word and Chevy could be approaching their 200,000 plug-in vehicles limit for the credit for all we know.

For now I'll join the SparkE camp and think about other things, just not Scarlett Johansson.

As of the end of February, GM was around 120K qualifying vehicles towards the 200K phaseout trigger. So they have 80K more to go. They probably won't hit the phaseout trigger until the second or third quarter of 2018, assuming the credit still exists for any EV manufacturer at that point.

 

[Electro]

Even if the credit is there or not, the benefits of buying an EV still works out so it won't hurt the EV game too much. This credit just kinda gave it a push to help people gravitate towards it, when enough people have it, it'll speak for itself and do fine without.